Deutsche Telekom Earnings Beat Estimates

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Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE) has reported increased profits in the first quarter 2013 results. The results outperformed the analyst’s estimates owing to a decline of loss in the mobile revenue. The operator also managed to up the retention rate.

Deutsche Telekom Earnings Beat Estimates

The earnings before interest, taxes, depreciation and amortization came in at 4.29 billion euros ($5.6 billion), a decline 4.3 percent from the year earlier. Analysts expected the earnings to come in at 4.24 billion euro. The wireless customers along with pay-as-you-go users, increased for the first time in the United States of America after a long time of 15 quarters, according to the company statement.

The net profit for the company came in at 564 million euros ($738 million) in the first three months of the quarter, which is a surge of 3.5 percent year on year.

Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE) also closed a merger deal with MetroPCS Communications Inc (NYSE:PCS). As per the deal, the Telecom operator merged its T-Mobile US unit with Metro PCS Communications Inc last week.

The peers of Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE) in Germany, Royal KPN NV’s E-Plus unit and Telefonica Deutschland Holding AG (O2D), recorded a decline in the average revenue per wireless customers for the first quarter. Both the operators were struggling for clients by offering cheaper voice and data packages.

Chief Executive Officer Rene Obermann said that the company has coped up with some vital issues and customer figures in the United States were one of them.

Data Throttling Issue

The earnings came amid constant criticism received by Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE) from the public for introducing Data throttling for high speed internet contracts in Germany as of 2016. Co-Founder Markus Beckedahl asked the government to look into the matter and stop the company from rolling out any such scheme to bring down the broadband speed after using the monthly volume. Beckedahl made such request while he was at national re: publica conference of internet pundits and bloggers in Berlin.

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Another executive stated that the percentage of users that will be affected by the Data throttling will be minimal of the 11.5 million broadband users. He said that it is “a matter of justice” to bring down the speed of those using the internet too much. The users will only get rid of data throttling by subscribing the more expensive plans such as “Entertain” or “Managed Services”.

Confirmed Full Year Outlook

For the full year, company expects adjusted EBITDA of 17.4 billion euros excluding the contribution from MetroPCS Communications Inc (NYSE:PCS) and a free cash flow of about 5 billion euros.


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