Deutsche Telekom said that it is “performing very respectably compared with its competitors”, as it posted robust results for the second quarter of 2012. While acknowledging that the company is still facing a number of challenges, Rene Obermann, its CEO, noted: “We are keeping our word and providing a good deal of reliability to the market with very solid figures.”
The company reported a net profit of EUR614 million, up 76.4 percent from EUR348 million, on revenue of EUR14.38 billion, down 0.7 percent from EUR14.48 billion.
It noted that in the prior year period, its profit was impacted by provisions made for an early retirement programme in Germany which is being used to carry out “socially responsible staff restructuring”.
The current period also saw EUR0.6 billion of depreciation and amortisation charges against T-Mobile USA, with the company noting that due to the planned sale of the unit last year, a similar charge was not recorded in Q2 2011.
On a group level, Telekom noted the positive impact of increased mobile data revenue, in conjunction with an increased penetration of smartphones.
However, it also noted “declining revenue from voice telephony, price changes imposed by regulatory authorities and intense competitive pressure”.
At the end of the period, the company had 35.47 million mobile customers in Germany, compared with 35.1 million at the end of the previous sequential quarter. It had 18.58 million contract customers, up from 18.11 million at the end of Q1, although it noted “most of these new customers were added in the reseller segment, which generates lower average revenue per user”.
Service revenue in its German mobile business was “once again unsatisfactory”, with a 1.0 percent decline year-on-year, although this was less than the 1.8 percent year-on-year drop seen in Q1. Growth in mobile data revenue “continued unabated”, with a 19 percent increase to EUR484 million, and 29 percent of ARPU now comes from mobile data, compared to 24 percent one year ago.
For its other European businesses, it said that its operating companies “continued to hold their ground in a difficult environment between April and June 2012, proving to be particularly strong compared with their competitors”.
It was noted that “with further deterioration in the economic situation of many countries, intense competitive pressure, and regulatory intervention, revenue and earnings still suffered”.
In the European segment, the company reported EBIT of EUR462 million, down 0.6 percent from EUR465 million, on revenue of EUR3.58 billion, down 5.9 percent from EUR3.81 billion.
The company has 60.81 million mobile customers in Europe, up from 60.21 million at the end of the prior sequential quarter. It has 27.1 million contract customers, up from 26.8 million.
Smartphones now account for 60 percent of all devices sold, up from 43 percent one year ago.
The more widespread use of smartphones also impacted mobile data revenue, which grew by 21.2 percent year-on-year.
Telekom is continuing to see pressure on its US business, following the shelving of its proposed merger with AT&T. EBIT of EUR396 million was down 54.4 percent from EUR868 million, on revenue of EUR3.82 billion, up 8.7 percent from EUR3.51 billion.
Customer figures in this market “continue to present a major challenge”. While it has improved its churn rate for branded contract customers, an industry-wide trend toward fewer gross additions resulted in an overall loss of 205,000 customers during the quarter.