Deutsche Telekom to invest in T-Mobile USA

Reuters

Deutsche Telekom aims to return to rising subscriber numbers and earnings growth at its T-Mobile USA unit after a deal to sell it for $39 billion to AT&T fell through, the company's chief said on Thursday. Chief Executive Rene Obermann said the company expects to invest around $4 billion, or an additional $1.4 billion in its U.S. networks in the coming two years.


He added he expected T-Mobile USA's 2012 earnings before interest, taxes, depreciation and amortization (EBITDA) excluding special items to decline to around $4.8 billion from $5.3 billion last year. Revenue at T-Mobile USA dropped by 3.3% to $20.6 billion in 2011.


Deutsche Telekom (Bonn, Germany) as a whole posted a fourth-quarter net loss of $1.7 billion as accounting charges on its activities in the United States and Greece failed to offset a cash payment for the collapsed T-Mobile USA deal. Analysts were looking for a fourth-quarter net profit of $1.3 billion.


Deutsche Telekom stuck to its dividend policy and proposed a stable dividend of $0.93 per share.


"Goodwill impairment in the United States and impairments on goodwill and property, plant, and equipment in Southeastern Europe, notably Greece, of approximately 3.3 billion euros ... had a negative impact on unadjusted net profit," the company said in a statement. The impairment charges failed to offset a $3 billion cash payment from AT&T (Dallas, Texas, USA) as part of a $6 billion breakup package after the U.S. peer walked away from a $39 billion deal to buy T-Mobile USA.


By proposing an unchanged payout to investors, Deutsche Telekom bucked the trend at other European telecom operators, who have struggled to find growth amid intense regulatory pressure and tough price competition. On Wednesday, France Telecom (Paris) cut its dividends and put off a promised share buyback. Spain's Telefonica (Madrid, Spain) trimmed dividends in December and is focusing on paying down debt, while Dutch operator KPN (The Hague, Netherlands) slashed its returns to shareholders via buybacks.


Deutsche Telekom said it expects 2012 earnings before interest, taxes, depreciation and amortization (EBITDA) excluding special items to reach around $23.9 billion with a free cash flow of about $7.9 billion.

ArticleTools

Featured Reports

Content Delivery Networks (CDN) 2015
Content Delivery Networks (CDN) represent large distributed system of servers deployed in multiple data centers across the Internet. CDNs provide solutions for efficiently and effectively managing content of all types. Solutions include core services such as aggregation, management, and distribution of content as well as a variety of value-added functionality.

 

Cable Carrier Wi-Fi: MSO Take MNO Market Share
How does a cable provider gain a bigger piece of the telecom market pie chart? With a clever Wi-Fi strategy, cable providers are in a unique position to dominate the residential and business telecommunications markets. This is the portent of things to come in the very near future: an MSO as MNO play.

 

Structured and Unstructured (Big) Data in Telecom Analytics
This report provides the reader with a broad understanding of telecom data (structured and unstructured/big data) and related analytics. The report identifies market drivers and opportunities as well as forecasts for certain key growth areas such as deep packet inspection.

 

Affordable Market Reports on Big Data, IoT, CDN & More!
Access the exclusive new series of market research reports brought to you through the partnership of Mind Commerce research and TelecomEngine.com.
Browse the latest titles

 

 

Featured Events & Partners

The Telecom Exchange (TEX)
Wednesday, June 24, 2015

Cipriani Wall Street, New York City

Designed to navigate enterprise and carrier network operators through all carrier hotels and colocation houses available in the US and globally.

Visit event website...