Deutsche Telekom targets US market growth for T-Mobile
06 March 2014 | Kavit Majithia
Deutsche Telekom has said it will slash its free cash flow for 2015, in a bid to win more mobile customers for its T-Mobile US division.
The German company gained approximately 2 million T-Mobile US prepaid mobile customers in 2013 following years of losing subscribers, after a refocus of its strategy on offering cheaper plans.
It confirmed it is unlikely to reach its target of €6 billion for free cash flow in 2015, with the figure estimated to drop to €4.2 billion in 2014. However, Deutsche Telekom did say the figure would rise slightly for 2015.
Results for 2013 showed adjusted earnings of €17.4 billion, down from €18 billion for 2012 – a drop of over 3%.
“We could achieve our original ambition level for 2015 of around €6 billion if we were to slam the door in the face of the customer rush in the US. That’s not what we want,” said Thomas Dannenfeldt, Deutsche Telekom’s CFO.
“The market is offering us the opportunity to achieve a different ambition: value-driven customer growth in the US that translates into an increase in the value of the company,” he explained.
The company gave no outlook for 2015 dividends, but said it would expect to pay €0.50 a share for the 2014 financial year.
Sprint and T-Mobile US were rumoured to be in discussions over a possible merger earlier this year.