Thursday, November 8, 2012

Deutsche Telekom Revenue Flat at EUR 14.7b, Growth in IPTV

Deutsche Telekom reported Q3 2012 revenue of EUR 14.7 billion, the same level as in the previous year. Adjusted EBITDA declined by 2.6 percent to EUR 4.8 billion while adjusted net profit totaled EUR 0.9 billion, 28.3 percent less than in the prior year, when taking into account substantial impairment charges regarding T-Mobile USA.

In Germany, Deutsche Telekom is seeing a positive trend in its "Entertain" Internet-based television service, as well as with mobile contract customers and VDSL lines.

The number of Entertain customers reached 1.9 million by the end of September, 39 percent more than in the prior-year period.

Year-on-year growth in fast VDSL lines even reached 55 percent. At the same time, line losses in Deutsche Telekom's traditional fixed network decreased by 12 percent compared with the same quarter in the prior year.

Mobile contract net additions reached 555,000 in the third quarter. 171,000 of these new customers were added in branded business under the Deutsche Telekom and Congstar brands, while the rest were added in the fast-growing, but much lower-revenue reseller segment (service providers).

With its operating businesses across Europe, Deutsche Telekom was hit by continued macro-economic challenges, new levys and the reduction in mobile termination rates in 9 out of 13 countries.  Total revenue in the Europe segment declined 5.7 percent year-on-year to EUR 3.7 billion. At the same time, adjusted EBITDA decreased by 4.3 percent to EUR 1.3 billion.

T-Mobile USA recorded 160,000 net additions in the third quarter thanks to strong performance in the branded prepay segment, with 365,000 branded prepay net additions. The contract customer segment recorded a loss of 492,000 customers in the past quarter, which was better than in the second quarter, but is still unsatisfactory. The churn rate for branded contract customers stood at 2.3 percent, a year-on-year decline of 0.3 percentage points. Against the second quarter, it increased slightly. One reason for this was the launch of iPhone 5 by other mobile operators.  T-Mobile USA revenue in the third quarter decreased by 5.9 percent year-on-year to USD 4.9 billion. Simultaneously, adjusted EBITDA decreased as expected by 14.2 percent to USD 1.2 billion as a result of increased spending on advertising.