“The T-Mobile US success story continues”, boasted Deutsche Telekom, as the company reported a solid start to 2017 fuelled by ongoing growth at its US business, despite a significant drop in overall net profit.
Deutsche Telekom’s profit fell 76.1 per cent year-on-year to €747 million during Q1 2017, while total revenue grew 5.8 per cent to €18.6 billion. The operator noted its Q1 2016 proft was boosted by a one off €2.5 billion gain from the sale of its shares in UK operator EE, by way of explanation for the large annual decline.
Earlier in 2017, the company also booked a €700 million writedown on its 12 per cent stake in BT. It followed a €2.2 billion charge on the same stake, which pushed the operator to a net loss in Q4 2016.
CEO Tim Hottges focused on the solid start to the year in Deutsche Telekom’s earnings statement, insisting “the positive trends remain unbroken”, while hailing the company’s continued success in the US.
T-Mobile US, which reported its Q1 numbers in April, continues to bear fruit for Deutsche Telekom.
The US operator had 1.1 million subscriber additions during the quarter, while profit climbed 46 per cent, hitting $698 million.
Deutsche Telekom said revenue in the US grew 14.9 per cent from a year earlier, while its European revenue increased 0.7 per cent to €2.8 billion. Revenue in its domestic market hit €5.4 billion, up 0.2 per cent. Mobile customers in the country also increased by 0.6 per cent, reaching 42.1 million.
“We are growing in the United States and have recently returned to growth in Germany,” added Hottges: “We got off to a good start in 2017. And, after a glance across the Atlantic, I can only say that our investments in the United States have paid off.”
In particular, Hottges was referring to an increase in capital spending on the network side in Europe and the US. Cash capex reached reached €3.2 billion for the first three months of the quarter, up 14.6 per cent.