Deutsche Telekom plans huge network investment
Deutsche Telekom has announced a reduction in its dividend as it looks to increase investments in its broadband networks and products.
The group’s capex, which includes MetroPCS, will grow to around €9 to 10 million, bringing the total up to almost €30 billion over three years.
The company will invest heavily in its domestic market, where it will build LTE networks as well as roll out optical fibre and vectoring technology in the fixed network. It plans to invest €6 billion on the fibre roll-out.
In the US, the company plans to roll out a national LTE network, investing as much as $4 billion. In addition, T-Mobile USA has entered into an agreement with Apple to bring products to market together next year.
"Hesitation now means playing catch-up later. We are investing in the future – with resolve and a clear strategy," said René Obermann, chairman of the board of management of Deutsche Telekom. "The investment plans we have presented today will lay the foundation for future growth. And it is the people in Germany in particular who will benefit more than ever from the modern infrastructure."
The announcement by Deustche Telekom comes at a time when many of its competitors are shying away from significant network investment. The move shows a strong commitment to developing faster networks for its consumers, which could pay off in the long term.
The company’s CFO, Timotheus Höttges, said it was “going against the flow with our high investments in these times of economic challenges”.
“We have worked hard to establish sound balance sheet ratios and now have the necessary leeway. Our dividend planning offers our investors both an attractive return and planning reliability," he added.