European telcos report drop in revenues

09 May 2013 |

Deutsche Telekom, Telefónica, and Telecom Italia Sparkle have reported low Q1 figures, drew on a weak economy and tough regulations as factors for the decline.

Deutsche Telekom’s figures showed a 4.5% drop to €13.8 billion, Telefónica’s total revenue declined 9% to €14.1 billion, and Telecom Italia Sparkle posted results of €6.79 billion, a fall of 8.1%.

Other European operators such as France Telecom, Swisscom and KPN have also noted difficulties due to an overcrowded market and the recession, according to Reuters.

"It's a tough year...because the domestic market continues to suffer as a result of contraction in consumer spending," Carlos Winzer, analyst at Moody’s, told Reuters.

European telecom stocks are said to be valued much lower than in the US, and are reported to be trading at roughly 11 times prospective earnings, in comparison to 19 times in the US.

Despite the difficult market conditions, Deutsche Telekom has reported slightly better core earnings for Q1, and its shares closed up 4.6% at €9.65, putting them top of the sector.

Earlier this year, the EU was scrutinised for cutting its budget for funding the region’s broadband project.