1. Inhalt
  2. Navigation
  3. Weitere Inhalte
  4. Metanavigation
  5. Suche
  6. Choose from 30 Languages

Business

Clouds Loom at Deutsche Telekom

The company announced it was cutting its 2001 dividend, the latest in a number of cost-cutting measures the German telecoms giant has had to undertake.

default

T stands for tough year ahead.

The bad news at Deutsche Telekom found its way to the company’s shareholders on Tuesday, as the telecommunications giant announced it would cut its 2001 dividend 40 percent.

The move was anticipated by many analysts, but still shocked shareholders who saw the interest they got from their Telekom stock drop from 62 cents to 37 cents. The announcement came a few weeks after Telekom announced its first annual loss, of 3.5 billion euro, since going public in 1996.

The firm has been in a cost-cutting mode recently.

After spending 8 billion euro on a license that would allow them to build next generation mobile telephone towers in Germany, the company said it would put off plans to build the towers until 2003. Telekom’s competitors are expected to take advantage of the new UMTS licenses by the end of this year.

The company also announced it would delay the initial public offering of its highly successful T-Mobile wing. The shares, which analysts predict could bring in 10 billion euro, will be introduced in the Fall rather than June, at the very earliest. Company executives said they didn’t want to float the shares in such a turbulent market.

Shareholders hope it happens sooner rather than later. Telekom’s debt reached 62.1 billion euro at the end of 2001. Company executives said Monday that the plan to reduce that number to 50 billion euro would be delayed by another year, to 2003.

The company blames the dividend cut on a decision by Germany’s Anti-Trust Office last month blocking the sale of their cable network to US-based Liberty Media. The sale would have brought in 5.5 billlion euro, but the anti-trust office feared competition would be compromised.

Stockholders have watched as the value of Telekom stock has dropped 74 percent since a secondary offering in June 2000. Telekom stock was down more than 2 percent in midday trading Tuesday.

DW recommends

WWW links