Quarterly Loss Is US $942 Million for Deutsche Telekom
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[London, ENGLAND] Top European phone company and Internet player Deutsche Telekom posted a billion euro (US $942 million) loss for the fourth quarter to the end of December 2000, according to Bloomberg's analysts.
Deutsche Telekom issued what it called a "preliminary indication of the corporate group's results for the 2000 financial year," without breaking down the figures into quarters.
The loss will worry investors, even though Deutsche Telekom's majority-owned mobile subsidiaries added 15.4 million new subscribers in the 2000 financial year -- a staggering increase by any standard. Even U.K. subsidiary One 2 One developed "very pleasingly" according to its German parent by doubling in size.
Investment analysts may also be inclined to compare the Deutsche Telekom results to those from Europe's biggest business software publisher SAP, also announced on Tuesday. By contrast they show fourth quarter profits rising 16 percent to EUR 366 million (US $343.9 million).
The reason for Deutsche Telekom's loss is its high spending on UMTS licenses and corporate acquisitions. Last year it spent around US $15 billion on third generation licenses, and the amortization and interest for them cost the company around EUR 0.45 billion (US $0.42 billion).
Deutsche Telekom insists it had a very good year if investors care to "exclude the effects of..." various consolidations and purchases. It mentions that gross debt actually decreased at the end of December 2000. That debt is now just EUR 60.3 billion (US $56.8 billion)
The heavy loss will force Deutsche Telekom to scale back its expansion, as confirmed by Chief Executive Ron Sommer last month.
Shares in Deutsche Telekom dipped by over four percent on the news. However, the market still values the company at over US $100 billion.
Acquisitions by Deutsche Telekom have inflated the figures for the total number of employees. Although the number of people employed by Deutsche Telekom AG decreased by 10,000, the purchase of debis Systemhaus and Slovenske Telekomunikácie added 20,500 and 13,400 employees respectively.
Deutsche Telekom reported that its Internet subsidiary T-Online gained more than 3.2 million new subscribers during 2000. The total is now 7.9 million, a figure that includes Club Internet, Ya.com and T-Online in Austria. There are now 1.4 million Internet subscribers to T-Online ISPs outside Germany.