Deutsche Telekom cited unexpectedly high costs incurred during the German spectrum auction as a factor in plans to cut its annual dividend by €0.10 per share compared with its 2018 payout.
In its Q3 results statement, the company said it would cut the payment from €0.70 per share to €0.60 per share. It explained the decision was due to a number of factors including the cost of acquiring 5G licences in Germany at the hotly-contested auction held earlier this year, along with preparations for forthcoming spectrum sales in the US.
The operator was severely critical of the German 5G process from the start, claiming authorities had created an artificial spectrum shortage.
Deutsche Telekom’s decision to cut investor payouts follows a similar move from fellow 5G auction participant 1&1 Drillisch. Market rival Vodafone had already announced a cut in its annual dividend prior to the auction taking place.
The other factor impacting Deutsche Telekom’s returns, it added, was the “removal of dividend uncertainty” related to its attempts to merge its T-Mobile US unit with rival Sprint.
During Q3, the operator booked a 23 per cent year-on-year increase in profit to €1.37 billion, though when this was adjusted to account for special items and one-off costs, the increase was 8 per cent.
Revenue grew 5 per cent to €20 billion.
Deutsche Telekom CEO Timotheus Hoettges (pictured) said the operator was “really powering ahead” as “earnings increased in all areas of the group in the first nine months of this year, with some of that growth in the double digits. At the same time, we are investing record amounts.”Subscribe to our daily newsletter Back