Deutsche Telekom plans investments despite €5.3 billion loss
28 February 2013 | Kavit Majithia
Deutsche Telekom has outlined plans for a range of investments in next-generation networks as well as its domestic mobile market.
The company is attempting to counter its lower than expected earnings for the full year, largely from its low growth mobile market. It met its financial targets for 2012, and confirmed it will pay a dividend of 70 Euro cents per share to shareholders.
It suffered an overall loss of €5.3 billion, falling by €0.8 billion in Q4, which was largely attributable to an impairment loss in Q3 of €7.4 billion. The charge relates to the pending merger between T-Mobile USA and MetroPCS.
Despite its results indicating a huge loss, chief executive René Obermann remained upbeat. “This loss of billions is not what it appears to be. We are not lacking funds to drive forward the development of the group. As we said in December, we want to step up investments in the future again, to almost €30 billion for 2013 to 2015.”
According to the Financial Times, the company’s US business mitigated some of its contract losses, despite service revenue dropping 9.2% over the year, as people moved towards cheaper tariffs. It had made investments in its German mobile business throughout last year, spending €200 million, and added 226,000 new customers in Q4 2012.
“We are going on the offensive – with extensive investments in networks and in the markets,” said Obermann. For 2012, we are delivering sound balance sheet figures, we plan to buy a stable dividend and we have reduced net debt by more than €3 billion to €36.9 billion.”