Deutsche Telekom stands by 2008 outlook

Deutsche Telekom stands by 2008 outlook
Photo: DPA
Deutsche Telekom, the leading European telecommunications operator, posted third-quarter results on Thursday which were in line with expectations and stood by its outlook for the full year.

“The worsening financial market crisis has not yet had an impact on the development of operations,” a company statement said, in sharp contrast to many German groups that have warned of falling profits owing to weakening global economic activity.

From July to September, the former telecoms monopoly continued the trend seen in recent quarters, a fall in subscriber sales but a stabilisation of operating profit.

Pre-tax operating profit, which the group uses as its benchmark, edged 2.4 percent higher to €5.25 billion ($6.6 billion). For all of 2008, Deutsche Telekom expects the figure to reach €19.3 billion. The group forecast that in 2009, pre-tax operating profit would remain stable or increase slightly.

“The past has shown that telecommunications are more resistant to the

economy than other sectors,” Deutsche Telekom boss Rene Obermann told a press


Net profit, which is often subjected to exceptional items, more than tripled to €895 million, while sales slipped by 1.5 percent to €15.45 billion.

Mobile telephone activities appeared to be resisting the global economic slowdown for now, and the group’s T-mobile unit is present in Germany, Britain, the United States and several eastern European countries. It reported having gained 1.2 million new clients in the third quarter.

But fixed line service pursued its plunge owing to competition and client’s switch to mobile service, losing 574,000 customers in the three-month period. T-Systems, the group’s information services division, also saw sales drop by almost seven percent. On Thursday, Deutsche Telekom said the unit would be reorganized and would focus in the future on major clients.