Deutsche Telekom’s strong Europe growth helps core earnings rise

Bonn — Deutsche Telekom reported first-quarter adjusted core earnings of €10.5bn on Thursday, with Europe a standout as the German telecom operator highlighted growth across all of its segments.

Core earnings for the quarter were slightly above a company compiled forecast of €10.25bn, and the Bonn-based operator said it had achieved record growth in earnings before interest, taxes, depreciation and amortisation after leases of 8.1% in Europe.

Telekom attributed the growth to higher customer numbers, price increases and slightly lower energy costs, though CFO Christian Illek said in a conference call that this would most likely not be sustained over every quarter of the year.

CEO Tim Hoettges also highlighted positive effects from a new German regulation due to come into effect from July which will mean landlords can no longer include TV services in housing rental contracts.

Vodafone, another major player in Germany, expects to lose about half of its 8.5-million households affected by the change, benefiting competitors such as Telekom.

Telekom’s MagentaTV, which will be streaming all Euro 2024 football matches as its official partner, increased its customer base by 73,000 to 4.4-million, supported revenues in the company’s German operating segment.

But its CEO sees a number of challenges in Germany, highlighting Telekom’s broadband segment which saw a year-on-year fall of about 47% in added subscribers.

While Telekom says it is “far from happy” with this development, Hoettges added in the call that it was working on driving broadband consumer figures up again and was “optimistic that this will happen in the coming quarters”.

Hoettges also criticised German network agency’s decision on Monday not to auction off new frequency usage rights and its plans to oblige Telekom, Vodafone and Telefonica to allow rival 1&1 to co-use their frequency capacity.

Telekom confirmed its forecast for 2024 outside the US, where its subsidiary T-Mobile US, which accounts for about two-thirds of group revenue, raised its forecast in April.


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