“Deutsche Telekom AG said Thursday it expects operating profit to drop further this year after reporting more customer losses in the U.S. and as parts of Europe remain challenging,” Philipp Grontzki reports for Dow Jones Newswires.
“It reported operating profit for 2011 of EUR18.69 billion, down from EUR19.47 billion a year earlier. ‘In 2011, the company operated in a challenging environment in every respect, a situation that is not going to change this year,’ Chief Executive Rene Obermann said in a statement,” Grontzki reports. “The net loss in the final quarter of 2011 widened to EUR1.34 billion, from a loss of EUR514 million a year earlier. The figure includes several one-time items, including a cash payment of EUR2.3 billion from AT&T Inc. as compensation for the failed sale of T-Mobile USA–as well as impairment writedowns of EUR2.3 billion and EUR800 million on the U.S. and Europe, respectively. Sales were down 3.7% in the last three months of the year.”
Grontzki reports, “T-Mobile USA lost another 802,000 contract customers on a net basis in the fourth quarter. The fourth-quarter impairment losses in the U.S. are linked to the declining customer contract base, as well as margin pressure at new contracts, Deutsch Telekom said, adding that it forecasts T-Mobile USA to generate an operating profit of about $4.8 billion this year, down from $5.33 billion in 2011. T-Mobile USA is the only national carrier not selling Apple Inc.’s iPhone, making it harder to win customers that sign contracts, and so far also the only one that isn’t building a faster fourth-generation mobile network on a technology called LTE. This will change soon, as Deutsche Telekom said Thursday it will invest an additional $1.4 billion as it now plans to launch LTE in the U.S. next year.”