Deutsche Telekom Crosses Fingers It Can Ditch T-Mobile UK
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T-Mobile UK lost 16.3 percent of its income through 2009, finishing at €3.39 billion ahead of what parent Deutsche Telekom (NYSE: DT) hopes will be Office of Fair Trading approval for its planned merger with Orange UK.
T-Mobile UK actually ended with 2.4 percent more customers (17.2 million) - but they were mostly prepay customers, and not the higher-value contract subscribers. DT wrote off €1.8 billion from T-Mobile UK in Q109 due to competition and EC-enforced roaming price reductions.
Deutsche Telekom is keen to get the merger done, creating the UK’s leading mobile carrier with 32.7 million customers. It’s pledging enhanced network quality, customer service, retail opportunities and innovation as a result - but expect “synergies”, ie. job losses especially in call centres, some of which T-Mobile UK already outsourced last year.
Group-wide Deutsche Telekom revenue jumped 4.8 percent to €64.6 billion because it fully accounted for its Greek subsidiary OTE for the first time. But net profit collapsed 76.2 percent to €400,000, in part because of impairments like that UK write-off.
By the year’s end, T-Mobile Deutschland had sold 1.5 million iPhones since getting Apple’s carriage in June 2009. And Telekom is looking farther ahead, too. “By 2015, we expect a typical mobile customer to require a data volume of around 14 gigabytes a month. In 2007, it was only a few megabytes,” it says in its annual report.
@robertandrews
Feb 25, 2010 10:26 AM ET
Posted In: Mobile, Money, Earnings, Companies, France Telecom, Orange, T-Mobile
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