Timotheus Hoettges (pictured), Deutsche Telekom (DT) CEO, said that the Bonn-based operator was “forging ahead toward becoming the leading European telecommunications provider” on the back of “massive” network investment.

Under the stewardship of Hoettges, who took the DT helm in January 2014, the German firm styles itself as a leading integrated operator, providing what it calls “the best” fixed network and mobile connections for its customers.

Buoyed no doubt by a robust Q4, which saw strong performances in the US and Germany, Hoettges said investment in property, plant and equipment is expected to increase in the next four years by an average of 1-2 per cent per year.

DT has already pumped large sums of money on LTE and broadband access networks. In 2014, the group splashed out €9.5 billion on cash capex (before expenses for mobile spectrum), which was 7.6 percent more than in 2013.

LTE investment continues apace. In 2014, DT pointed out that the combined increase in the population coverage of LTE networks of all Group companies amounted to more than 110 million people – more than the number of inhabitants in Germany.

By 2018, DT’s LTE network in Germany is slated to reach population coverage of 95 percent, compared with 65 percent at the end of 2014.

The migration of networks to all IP, throughout the entire Group, is to be completed by 2018.

Growth targets

With growth uppermost in his mind, the CEO laid out a target of compounded average organic revenue growth of 1-2 per cent per year for the financial years 2015 to 2018, while adjusted EBITDA is set to grow faster over the same period – again, in organic terms – at a CAGR of 2-4 per cent.

In the current 2015 financial year, thanks mainly to operational improvements at T-Mobile US (in which DT holds a 64 per cent stake), Hoettges expects adjusted EBITDA for the group to jump from €17.6 billion (2014) to around €18.3 billion.

Adjusted EBITDA at T-Mobile US is expected to climb by around 25 percent, based on US operator guidance for 2015.

Impressive Q4 results in US; solid in Germany

There is reason to be optimistic, based on upward trends seen in the three months to end-December 2014.

Thanks to a strong performances in the US, and resilience in Germany, net revenue during the quarter increased 8.5 per cent, year-on-year, to €17 billion.

In organic terms, which excludes exchange rate effects and changes in the composition of the Group, growth was 5.6 per cent.

Net loss for the Q4 period was trimmed to €110 million from a loss of €752 million a year earlier.

T-Mobile US turned in a particularly strong showing. Between October and December, the total number of customers increased by 2.1 million to more than 55 million (1.3 million of these were postpaid customer additions). The customer base grew by 8.3 million in the financial year.

Revenue increased by 17.5 percent in the fourth quarter, to $8.1 billion, compared with the same period last year.

More impressively, however, growth in adjusted EBITDA at T-Mobile US was up an eye-catching 27.5 per cent, to $1.7 billion.

In its home market, Germany, mobile service revenues increased by 1.8 percent year-on-year, which DT claimed outperformed the market. The number of customers who use an LTE-enabled device, and have subscribed to an LTE rate plan, doubled during the year to more than 5.6 million.

Demand for fiber-optic products (FTTH and VDSL) was up, too. In Q4, 323,000 customers opted for a fiber-optic line, 143 per cent more than in 2013.

Overall Q4 revenue was up 1.6 per cent in Germany, to €5.7 billion, although adjusted EBIDA was down 1.3 per cent, to €2 billion.

Mobile customers in other European DT operations totalled just under 56 million by end December 2014, down 1.2 per cent from 12 months previously. DT added, however, that almost 15,000 LTE base stations had been established by the end of 2014, more than three times as many as at the end of 2013.

“It was a strong quarter to close a successful year,” said Hoettges. “We have put the Group back on course for growth and will continue rigorously to forge ahead with this path.”

In its full 2014 financial year, DT recorded net revenue growth of 4.2 per cent, to €62.7 billion.

Net profit rose to €2.9 billion from €930 million in 2013. The near triple year-on-year jump was partially due to the sale of Scout Group, DT’s digital business unit.