New poster here so apparently I cannot include reference links until I grow my post count. Sorry about that.

The following appeared in an article today available at triple w dot wirelessweek dot com.

Deutsche Telekom Cuts Outlook, Sees Shares Drop
By Eric M. Zeman
January 29, 2007


Deutsche Telekom blames its poor performance and a new cut in profit forecasts on competition and the weakness of the dollar. Its share price dropped 6.5% as a result.

Europe’s largest telecommunications company saw the biggest decline in its share price since August today after it announced another cut in future profits. In November, the company estimated 2007 EBITDA to be about 20.2 billion euros, but is now saying it will be around 19 billion euros. The stock slumped 92 cents to 13.25 euros.

The Bonn, Germany-based company has had a tough couple of years. After ousting the CEO last fall, one of the core concerns has been to slow down a decline in standard phone sales. Competitor Vodafone Group is not making it easy, however, with constant price discounting.

Revenue from the company’s fastest growing unit, T-Mobile USA, has also not lived up to forecasts because of the dollar’s slide against the euro in 2006. While T-Mobile USA added some 901,000 customers in the fourth quarter of 2006, boosting subscribers to 25 million, it is still far behind market leader Cingular.

T-Mobile’s European unit didn’t fare well either, with another drop in profits. Though the unit added 746,000 customers in Germany, revenue fell over 8% due to price cuts.

Still, Deutsche Telekom remains moderately optimistic. ``We're confident that this year we'll be able to improve our market position in the broadband market,'' CEO Rene Obermann said yesterday. ``We must invest to safeguard our position. It's a difficult market.''

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