Wednesday, November 8, 2006

Deutsche Telekom Cites Quick Turn Around After Launching New Rates

Deutsche Telekom said its new calling rates are proving extremely popular in its home market and are credited as part on a turn around in its core business.

"In mid-September we launched the best reform of our calling plans ever. Since its introduction seven weeks ago we have netted around 1.8 million orders for the new 3x3 fixed-network calling plans. And in mobile communications, we managed to win 500,000 new contracts," said Kai-Uwe Ricke, Chairman of Deutsche Telekom's Board of Management.

By the beginning of November, around 1.8 million orders had been placed with T-Com for one of the new 3x3 rates. The company said that its figures for October showed that a positive trend in the DSL business recorded in the third quarter of 2006 is accelerating. The proportion of new DSL lines connected to T-Com's network that were marketed by T-Com topped 50 percent in the first month of the fourth quarter.

"This clearly reflects a turnaround. We have clearly gained new strength in competition," said Ricke.

Adjusted Group EBITDA is now on course to reach the full-year target of between EUR 19.2 and EUR 19.7 billion.

Net revenue in the first three quarters of 2006 rose to EUR 45.5 billion from EUR 44.1 billion in the previous year - an increase of 3.1 percent.

Some other key operational metrics:


  • T-Mobile Deutschland had 236,000 net additions in Q3, of which 150,000 opted for a fixed-term contract, however revenue in the third quarter was down 4.1 percent year-on-year at EUR 2.1 billion.

  • At the end of the third quarter, T-Mobile had approximately 61 million mobile customers in Europe (excluding Germany) and the United States.

  • The US mobile communications business was the revenue driver in international business with gains of 18.2 percent in the first nine months of the year.

  • T-Mobile UK also posted revenue growth with an increase of 8.5 percent in the first three quarters of 2006.

  • Broadband

  • In Germany, around 9.4 million DSL lines provided by T-Com were in operation at the end of September 2006. This represents an increase of 439,000 DSL lines in the third quarter of 2006 and a rise of around 30 percent year-on-year. The Broadband/Fixed Network business area reported a substantial upturn in its DSL retail ratio, or the proportion of lines marketed by T-Com to the total number of broadband lines activated in the third quarter. This proportion improved from just under 4 percent in the prior quarter to almost 19 percent (81,000 net adds), reflecting the success of the double flat rate for telephony and Internet access, which was implemented following the merger of T-Online into Deutsche Telekom on June 6, and the successful marketing of the new 3x3 rates. The total number of DSL resale lines rose by 358,000 to 2.9 million in the third quarter.

  • Broadband/Fixed Network revenue in Germany declined 5.9 percent year-on-year to EUR 16.4 billion in the first nine months of 2006. This drop is due to lower call revenues and line losses, but also to a decline in revenues from interconnection services and lower prices for Internet access.

  • Outside of Germany, broadband lines increased by 172,000 in the third quarter of 2006. There were a total of 843,000 lines in Eastern Europe, 92,000 more than in the previous quarter. Almost 1.2 million broadband lines were in operation outside Germany at the end of September 2006, representing an increase of around 140 percent over the previous year.

See also