Germany's telecommunications giant Deutsche Telekom on Tuesday reported its first annual loss since going public in 1996.
Telekom is working on restoring market confidence
On Tuesday, Deutsche Telekom stunned the markets by announcing it had lost 3.5 billion euro ($ 3 billion) last year.
The preliminary results are a far-cry from the 6 billion euro ($ 5.22 billion) profit that Telekom earned in its previous year of business.
The main reason for Telekom's bad results are the high interest payments associated with UMTS licenses.
Last year's purchase of U.S. mobile carrier Voicestream also proved a burden for the company.
Back home, Deutsche Telekom is stuck with a cable network it doesn't want and a mobile division it is trying to take public.
The IPO of T-Mobile has now been put off due to poor market sentiment. And a cable deal with U.S. group Liberty Media was blocked by competition authorities.
Deutsche Telekom would have needed both deals to go through in order to slash its debt, as planned, from 65 to 50 billion euro ($ 56.5 to 43.5 billion).
But even though the company was drained of cash by its U.S. mobile operator Voicestream, Telekom announced on Tuesday that its sales and core earnings rose in the last quarter of 2001.
Telekom's poor results had a ripple effect on German markets on Tuesday. After sharp gains on Monday, German share prices slipped on Tuesday.