News
Domestic, European operations in better health but the U.S. remains the strongest performer.
Deutsche Telekom on Thursday raised its full year earnings forecast following a solid second quarter both at home and abroad.
"Our record investments are paying off: growing numbers of customers are choosing our networks and products. And revenue and earnings are lifting substantially on the back of this strong customer growth," said Deutsche Telekom CFO Thomas Dannenfeldt, in a statement.
"That is especially true of our booming U.S. business, but the trend is also positive in Germany and our European companies.
The German incumbent has invested €6.2 billion – excluding spectrum payments – in the first six months of 2017, 13.5% more than last year, as it looks to extend and upgrade its fixed and mobile networks.
Its efforts have caught the market’s attention. T-Mobile US is still attracting hundreds of thousands of new customers, and its mobile network was ranked the best in the country by OpenSignal this week.
In Germany, Deutsche Telekom grew its high-speed broadband customer base – that is customers who subscribe to either fibre-to-the-cabinet (FTTC), fibre-to-the-premises (FTTP), or vectored VDSL – by 622,000 during the quarter, reaching 8.2 million in total. A year earlier, that figure stood at 580,000.
Across the rest of its European footprint, Deutsche Telekom increased its 4G network coverage by 21 million people year-on-year to now cover 102 million in total. Its 100-Mbps fixed broadband coverage increased by 1 million premises to approximately 5.3 million.
Deutsche Telekom ended June with 42.01 million mobile customers in Germany, up from 41.14 million a year ago. Its fixed broadband base increased to 13.04 million from 12.77 million.
At its European region, mobile customers fell to 47.69 million from 48.54 million; its fixed broadband base grew to 5.51 million from 5.31 million.
T-Mobile US had another impressive quarter, as customer numbers grew to 69.56 million from 67.38 million.
On the financial side, group second quarter revenue came in at €18.89 billion, up from €17.82 billion a year earlier. Domestic revenues inched up to €5.37 billion from €5.34 billion, while the rest of Europe grew 2.4% year-on-year to €2.86 billion. T-Mobile US was the strongest performer again, with revenue growing 12.7% to €9.24 billion.
Group EBITDA surged 27.4% to €5.99 billion, and net profit jumped 40.7% to €874 million.
As a result of the strong performance, Deutsche Telekom raised its full year adjusted EBITDA forecast to €22.3 billion from €22.2 billion, thanks to continued strong growth at T-Mobile US.
Meanwhile, its IT arm T-Systems had another difficult quarter, with order intake down 13.4% year-on-year to €1.30 billion. Revenue fell 1.8% to €1.69 billion, driven mainly by strong price pressure in the IT services sector.
