Deutsche Telekom CEO Timotheus Hoettges hailed the operator’s perfomance on both sides of the Atlantic during Q1, pointing to its “unique growth profile” and positive impact of convergence in many of its European markets.
During the quarter, the operator booked a 32.8 per cent year-on-year boost in net profit to €992 million, though revenue fell 3.9 per cent to €17.9 billion.
Deutsche Telekom attributed the decline primarily to negative exchange rate movements between the euro and dollar, while in its home market a “change in accounting standards” on revenue derived from consumers also made an impact.
In Germany, Deutsche Telekom pointed to the success of its unlimited streaming offer StreamOn, which is the subject of an ongoing legal case related to net neutrality. It also reported a growth in customers subscribing to fibre-optic broadband.
A third of its revenue during Q1 2018 came from its home market, while T-Mobile US – which announced its results last week and is in the process of attempting to acquire rival Sprint – contributed 47 per cent. The Rest of Europe made up 19 per cent of earnings.
The company said the market in Europe remained “intensely competitive” and pointed to the importance of its converged offerings, describing its TV and broadband business as a “constant revenue driver”.
During Q1 the number of customers taking both fixed and mobile services increased by over 50 per cent year-on-year in the European markets where it offers both. It added the main drivers of the trend were in Greece, Hungry and Romania.
However, in two of these markets – as well as Germany – it looks set to face a stiffened challenge from converged offers from Vodafone, should an acquisition of Liberty Global’s assets in mainland Europe be approved: the deal was announced today (9 May).
Deutsche Telekom added it expects to replicate its convergence success in Austria following the completion of an acquisition of UPC from Liberty Global in the second half of 2018.