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Tuesday, 23 January, 2001, 18:08 GMT
Telekom hit by 3G costs
Deutsche Telekom head office
Deutsche Telekom disappointed analysts with its profit figures
Disappointing earnings figures from Deutsche Telekom have caused a fresh dent in sentiment towards the telecom sector.

Although the German telecoms giant reported net profit, after exceptional items, of 7.4bn euros ($6.96bn) for 2000, it also revealed a loss of 1.06bn euros in the fourth quarter.

The net profit of 7.4bn euros is a substantial increase on last year's figure of 1.25bn euros, but has been inflated by one-off income.

A spokesman for Deutsche Telekom attributed the fourth-quarter loss to debt taken out to finance the purchase of third-generation licenses, as well as goodwill costs associated with recent acquisitions.

The annual profit figure was inflated by one-off income from the sale of stakes in GlobalOne, Wind and two German cable companies.

The company also gained from the float of its internet arm, T-Online.

Overall, excluding one-off income, the group broke even with a net profit of zero, said the spokesman.

Analyst disappointment

But even taking into account the one-off income, the profit figure of 7.4bn euros fell short of analysts' expectations.

They had been forecasting after-tax profit of 8.1-8.9bn euros.

Deutsche Telekom shares fell 0.13 euros, or 0.4%, to 36.60 euros.

On London's FTSE 100, British rival BT was down 2.8% to 678.

Sales results

Deutsche Telekom's sales were 15% higher at 40.9bn euros, compared with 35.5bn euros the year before. This was mostly due to increased revenue from foreign subsidiaries.

Mobile phone
Mobile phones led the growth in Deutsche Telekom's customer base

The company also reported that its total customer base nearly doubled to 31.1m from 15.7m in 1999.

Mobile phone companies, including One-to-One in the UK, led the growth with 19.1m subscribers compared with 9.1m the year before.

The company's net debt totalled 56.4bn euros at the end of December.

New-generation phones

The spokesman also said the company did not anticipate any problems with the roll-out of its third-generation network.

Newspaper reports on Tuesday referred to doubts by Vodafone and Telecom Italia Mobile that second- and third-generation mobile phones would be introduced on schedule.

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See also:

23 Nov 00 | Business
Telekom bows out of French auction
26 Sep 00 | Business
Germany to cut Telekom stake
20 Jan 00 | Business
Deutsche Telekom profits plunge 45%
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