German carrier Deutsche Telekom reported a decent set of third quarter results on Thursday, although analysts expressed some concern about its US operations.
For the quarter, adjusted net profit climbed 12 per cent year on year to Eur1.18bn from Eur1.05bn last year, while net revenues decreased 1.5 per cent year on year to Eur15.4bn.
T-Mobile’s domestic operation recorded strong growth in contract subscriptions thanks in part to the introduction of the iPhone 3G and managed to boost adjusted EBITDA by 12.2 per cent, to Eur872m. The German fixed line operation reported a surprisingly good performance, taking a 49 per cent share of all DSL net adds in the third quarter, while the number of line losses, at 574,000 was at an annual low.
But T-Mobile USA, normally the powerhouse of the group, was significantly affected by the weak US dollar with US revenues rising just 2.7 per cent. The US outfit added 670,000 new subscribers to take its total to 32.14 million customers, and without access rights to the iPhone in the US, T-Mo will have to make do as the exclusive carrier of Google’s Android G1 handset, which has apparently “generated an unusually large amount of interest”.
T-Mobile UK was hit by tough competition and weak currency conversions, with revenue falling 6.7 per cent year on year to £800m. Again, the Android G1 is expected to deliver a boost to the company.
Throughout Europe, the trend toward mobile data usage continues unabated. T-Mobile said its European operation recorded revenues – excluding text and multimedia messaging – of Eur380m between July and September 2008, which represents year on year growth of 45.3 per cent. The number of web’n’walk customers climbed 67.2 per cent to 4.7 million.
Michael Kovacocy, European telecoms analyst and sector strategist, at the Daiwa Institute of Research, said: “Normally we would be more enthusiastic about solid performance at the top-line and over-performance at the operational bottom-line. However, it appears that Deutsche Telekom’s key growth engine – T-Mobile – may have seen some wind come out of the sails of its previously very strong US operations.”