Deutsche Telekom profit up on strong US sales | Business| Economy and finance news from a German perspective | DW | 13.05.2015
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Deutsche Telekom profit up on strong US sales

Strong growth in the US market coupled with the benefits of a weaker euro against the dollar have given a substantial boost to Germany's biggest phone operator, setting it on course to achieve its full-year results.

Germany's Deutsche Telekom on Wednesday reported a quarterly core profit of 4.6 billion euros ($5.15 billion), up 11 percent from the same three-month period a year ago.

Revenues grew by 13 percent to 16.8 billion euros, buoyed by rapid growth of its T-Mobile US business. A sronger dollar also created a windfall profit for Europe's biggest telecoms company.

"It has been some time since we have seen positive indications for revenue and earnings in our industry," said Deutsche Telekom's Chief Executive Tim Höttges in a statement.

He also noted that Deutsche Telekom's strategy of higher investment was finally "paying off."

T-Mobile US shines amid gloom

In its home market Germany, Deutsche Telekom's core profit, also known as earnings before interest, tax, depreciation and amortization (EBITDA), slumped 1 percent to 2.2 billion euros. Here, telecoms operators have been suffering from dwindling sales and stiff competition.

In the United States, however, the German telecoms giant fared much better, winning over an additional 1.8 million customers between January and March alone.

Deutsche Telekom originally wanted to shed its 66-percent stake in T-Mobile US, but a deal never materialized. Now, the US business is proving a cash cow after massive investment in infrastructure and advertising.

As a result, Deutsche Telekom announced that it would keep its 2015 EBITDA forecast, excluding special items, of around 18.3 billion euros at constant currencies, with a free cash flow of around 4.3 billion euros.

uhe/ng (Reuters, dpa)

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