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Deutsche Telekom profit tanks in 2009

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Deutsche Telekom profit tanks in 2009
Photo: DPA
10:57 CET+01:00
Deutsche Telekom, the biggest European telecommunications operator, said Thursday that 2009 net profit plunged by more than 70 percent owing to asset devaluations of more than €2 billion ($2.7 billion).

Deutsche Telekom recorded profit of €400 million, a statement said, compared with €1.48 billion in 2008.

The drop was attributed to asset write-downs of €2.3 billion related to the group's T-Mobile UK operations in Britain and other units in eastern and southern Europe. Deutsche Telekom is especially present in Hungary, Romania and Slovakia.

The group's core earnings, which serve as a benchmark for results, gained 6.2 percent to €20.7 billion, essentially in line with its own forecasts.

The Greek telecoms operator OTE, which Deutsche Telekom bought last year, contributed two billion euros to that figure.

OTE also allowed its German parent company to increase sales by five percent to €64.6 billion, without which Deutsche Telekom's sales would have been in decline.

Fixed-line customers continued to desert the company in Germany, a trend seen over the past few years, while the mobile market is now mature, and grew only slightly.

T-Mobile sales were weaker in almost all of its other major markets, including Britain, the Netherlands, eastern Europe and the United States, partly as a result of foreign exchange effects.

For 2010 Deutsche Telekom remained cautious, forecasting core earnings on the order of €20 billion amid "a persistently difficult business environment."

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