Deutsche Telekom CEO Timotheus Hoettges on Wednesday presented a strong set of first quarter results and insisted he is unconcerned by the prospect of a competitive push in Germany from cable giant Liberty Global.
Last week Liberty Global hinted that it could look to replicate Project Lightning, its £3 billion scheme to extend the reach of its U.K. broadband network, in Germany on a larger scale.
"I am not afraid of that one," said Hoettges. "I am a big supporter of broadband infrastructure investment in Germany."
Deutsche Telekom is making hefty investments of its own. Last year it committed to spending €4 billion on network rollout in Germany and its efforts appear to be bearing fruit.
"Our broadband net adds were the strongest in years," Hoettges said. The company added 76,000 broadband customers in Q1 and increased its retail fibre connections – including vectored VDSL – by 295,000 to 2.09 million.
"We are likely to exceed our guidance of 100,000 net [broadband] additions in Germany," for the full year, added CFO Thomas Dannenfeldt.
Hoettges noted that Deutsche Telekom is well on its way to achieving 80% fibre coverage by 2018 and explained that by 2016 its fibre network will match the country’s cable footprint.
"We ar e catching up," he said.
But the telco is not relying on fibre-to-the-home (FTTH) to boost network speeds. Hoettges talked up the potential of his company’s copper network, thanks to vectoring, super-vectoring and G.fast technology.
"There is a lot of opportunity to upgrade our infrastructure in the street cabinets quite soon," he said.
Deutsche Telekom also reported strong momentum at its domestic mobile operations. Revenue grew by 10.2% year-on-year to €2.06 billion, while contract customers grew by 289,000 over the 12 months to 22.58 million; in total, the firm served 39.2 million mobile customers in its home market as of the end of March.
Deutsche Telekom’s U.S. business had the biggest impact on its numbers though. T-Mobile US, which posted its Q1 results a fortnight ago, contributed €6.91 billion to the group’s topline, an increase of 36.1% on the year-ago quarter.
By comparison, Deutsche Telekom’s German operations generated revenues of €5.59 billion, up 1.9%.
"The German market as a whole is growing," noted Dannenfeldt. "We will certainly outperform the market in 2015," he said.
At group level Deutsche Telekom saw revenue grow by 13.1% to €16.84 billion.
EBITDA fell by 26.2% to €4.16 billion and net profit declined by 56.7% to €787 million, both impacted by a €175 million one-time benefit in the year-ago quarter related to the settlement of legal proceedings.
"[This is] a strong set of results and we are well on track to deliver the full-year guidance," Hoettges said.
The telco expects to post adjusted EBITDA of €18.3 billion, based on a constant exchange rate with the dollar, and free cash flow of €4.3 billion.
