Deutsche Telekom CEO Timotheus Hoettges hailed progress in a digital strategy during Q1, a period when profit soared on the sale of a stake in its European tower business, but which also highlighted potential challenges for its T-Mobile US unit.

On Deutsche Telekom’s earnings call, Hoettges noted it achieved growth in the face of continued market challenges and set the goal of maintaining the progress over the rest of the year.

Hoettges was quick to note a hike in net profit from €3.9 billion in Q1 2022 to €15.3 billion was mostly due to the sale of a 51 per cent stake in its tower unit covering Germany and Austria in February.

“You know our strategy when it comes to restructuring our portfolio. When we see the opportunity to enhance the group’s value as a whole, we will take a closer look,” Hoettges explained, noting the tower sale as an example.

Device deals
The executive highlighted a decline in handset sales for T-Mobile US, explaining promotions offered to Sprint customers after it was absorbed by the business are largely at an end because the integration process is “now as good as finished”, meaning Deutsche Telekom will “no longer generate corresponding” revenue.

But Hoettges continued to note T-Mobile US is a “decisive building block in our strategic alignment”, citing post-paid net additions which eclipsed that of rivals Verizon and AT&T combined.

T-Mobile US’ strength is a factor in Deutsche Telekom raising its 2023 EBITDA AL guidance to €40.9 billion compared with previous guidance of €40.8 billion.

In its earnings statement, Deutsche Telekom also highlighted strong customer growth in domestic market Germany and gains in its European units “despite difficult conditions”.

Its T-Systems unit recorded revenue gains on an organic basis, though the operator noted its order book fell 24 per cent year-on-year to €754 million because of “major deals” booked in Q1 2022.

Overall revenue was flat at €27.8 billion.