Wednesday, August 8, 2007

Deutsche Telekom Chases International Growth

Deutsche Telekom reported significant revenue growth in its international markets during the first half of 2007 and said that cost cutting measures within Germany are taking effect. Deutsche Telekom now generates over half of its revenue outside Germany. Some highlights:

  • Overall, net revenue increased by 3.5 percent year-on-year to EUR 31 billion in the first six months of the year. At EUR 2.3 billion, free cash flow in the first half of the year was around 5 percent higher than in the prior-year period.

  • For the full financial year, Deutsche Telekom expects moderate growth in net revenue, adjusted EBITDA of approximately EUR 19 billion and free cash flow, including real estate sales, of around six billion euros.

  • In the Broadband/Fixed-Network segment -- largely influenced by domestic business -- adjusted EBITDA increased slightly over the first quarter to EUR 1.9 billion, despite a decline in revenue. In addition, the share of new customers in the retail broadband market was 42 percent in the second quarter -- and thus within the target corridor of 40 to 45 percent.

  • The company added 945,000 net broadband retail customers in the first half of the year.

  • Deutsche Telekom now serves 13.0 million DSL lines in all its markets, up from 9.8 million a year ago. Of these, 11.5 million DSL lines were in Germany, up from 10.28 million at the end of December 2006.

  • The number of domestic narrowband lines dropped 5.9 percent to 37.7 million, compared to 40.0 million a year earlier.

  • T-Mobile consolidated its position as the German mobile communications market leader with 34.3 million customers.

  • T-Mobile now has 111.8 million customers, up from 101.1 million a year earlier.

  • International revenue rose by 14.6 percent in the first half of the year to EUR 15.6 billion. The buoyant growth can mainly be attributed to a sharp increase in customer numbers just under 2.4 million in the international mobile business, where revenue increased by 15.2 percent year-on-year in the first half of the year.

  • Working hours for 50,000 employees in Germany have been increased from 34 to 38 hours per week without further compensation.

"The key message that we want to communicate for the first half of 2007 is that we are right on track to achieve our 2007 financial targets," stated CEO René Obermann.

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