The largest mobile carrier of Europe, Deutsche Telekom, has reported that its profits in the second quarter have decreased by 6.5%. The company lost a large percentage of its mobile phone customers in the US and had to bear the early retirement costs in Germany. T-Mobile USA, owned by Deutsche Telekom, too reported losing 281,000 contract clients this quarter, which resulted in the cumulative loss of around a million dollars in less than a year, said a representative of Deutsche Telekom. The result was worse than the estimates of the company losing 200,000 of its customers, which was projected by analysts.
Rene Obermann, the CEO of Deutsche Telekom, has his focus on taking the company’s markets in Europe back to profitability by the year 2013 after he agreed to sell T-Mobile USA to AT&T in March in a deal worth $39 billion. He is also looking to ensure a smooth transition for the company to sectors like digital content, mobile internet and healthcare services in order to recuperate from its decreasing sales in areas such as voice services and landline. An analyst named Stefan Borscheid said that the company performed well in Germany while struggling in the US, saying that the only thing that matters for them is that they still have a strong hold on the market.
The operating income of T-Mobile USA before amortization and depreciation has gone down by 10% to the total of $1.28 billion. The company’s subscribers for the cheaper prepaid phones did not compensate for the loss of those on contracts. The wireless carrier’s sale to AT&T is still in the process of getting approved by the US regulatory authorities in a long drawn out procedure as many have argued that the merger of the two, which will result in the formation of the country’s largest telecom provider, is going to stifle the competition and increase costs for customers.
During the second quarter, AT&T, Verizon and Sprint Nextel have all increased their holds of the wireless subscription market in the US. T-Mobile’s shares had shrunk by 0.4% to reach 10% in the first quarter of this fiscal year. Deutsche Telekom’s lines for broadband internet connections in Germany went over and above the number of traditional land lines for the first time ever in the last quarter, whereas the mobile internet revenue went up by 30% to reach 409 million euros.
