Deutsche Telekom Q2 boosted by US operations
August 11, 2016
Deutsche Telekom has reported core profit rose 8.6 per cent as its US operations compensated for network upgrade investments in Germany.
The German telco said adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), excluding special items, rose to €5.46 billion.
Deutsche Telekom added 41,000 customers to its domestic IPTV platform Entertain in Q2 2016, increasing the total subscriber number to 2.78 million.
Deutsche Telekom’s US unit was the main growth driver. It generated almost half of its Q2 sales and almost 40 per cent of core profit. Last month T-Mobile US Inc, in which Deutsche Telekom holds a majority stake, reported quarterly results that beat estimates. It also raised its full-year subscriber growth forecast, as the posted customer gains surpassed expectations.
Under Chief Executive John Legere the thris ranked US wireless carrier has rolled out offers including free data for its users who play the popular smartphone game “Pokemon Go,” its free video streaming service “BingeOn” and “T-Mobile Tuesdays” weekly perks, such as free food and movie tickets, to attract users. Such efforts helped T-Mobile add 1.88 million customers in the second quarter. T-Mobile shares are at a nine-year high, giving the company a market capitalisation of almost $40 billion.
Deutsche Telekom is trying to copy the strategy in European markets where it is not a leading operator.