Deutsche Telekom lifts outlook despite dip in profit

Frankfurt am Main (AFP) –


Germany's Deutsche Telekom lifted its full-year outlook on Thursday despite a dip in quarterly net profit, saying "unbroken" customer growth in US arm T-Mobile would bolster earnings.

Net profit at the telecoms giant plunged 43 percent to 495 million euros ($573 million) year-on-year between April and June, dragged down by a one-off charge related to the settlement of a legal dispute.

Deutsche Telekom said it had to pay 600 million euros in the second quarter to end a years-long row with the German government over the delayed implementation of a truck toll system it designed with Daimler.

Without the one-off charge, profits increased 3.3 percent year-on-year to 1.2 billion euros.

Group revenues were up one percent to 18.4 billion euros, adjusted for currency effects, as Deutsche Telekom won new customers for its mobile, broadband, TV and landline services in Europe and the United States.

In a statement, Deutsche Telekom welcomed a "strong quarter" that saw the group hold on to its leading position in Germany and continue a run of "unbroken customer growth" in the key US market.

The group's T-Mobile unit, poised to merge with US rival Sprint, gained another 1.6 million customers to notch up its "21st consecutive quarter of million-plus growth".

US wireless operator Sprint and T-Mobile announced in May that they plan to form a new company and push development of a super-fast 5G network.

A first merger attempt in 2014 failed in the face of opposition from US regulators, and some investors remain concerned that regulatory objections could stymie the deal.

Deutsche Telekom offered no new details about the merger's progress, saying only that "T-Mobile remains on a successful trajectory after announcing its plans to merge with its competitor Sprint".

T-Mobile and Sprint -- a subsidiary of Japan's SoftBank -- are currently the third and fourth largest wireless operators in the US, respectively.

Looking ahead, Deutsche Telekom said it now expects to post adjusted operating profits of around 23.4 billion this year, up from an earlier estimate of 23.3 billion.