Having managed to just exceed analysts' expectations for its first quarter operating profits--helped by demand for mobile data services in Germany--Deutsche Telekom CEO Rene Obermann said that the company must remain open to cooperation on 4G. Specifically, he said that the company would considering sharing a network in regions where capex costs of building a network would be enormous.
The company announced that its first quarter earnings rose 1.6 per cent to €4.89 billion, beating the €4.86 billion average estimate of 20 analysts surveyed by Bloomberg. It also stated that first quarter sales slid 0.6 per cent to €15.8 billion, beating a prediction of €15.58 billion, the average estimate of 17 analysts.
However, these numbers were significantly helped by mobile data traffic in Germany which grew by 38 per cent and in the U.S., the company's second-largest market, where it rose 18 per cent.
Having ruled out a transformational acquisition in the U.S., the company appears to be adopting a strategy of rebuilding its troubled subsidiary with plans to increase the speed of its 3G network. However, T-Mobile USA's first quarter capex fell to US$666 million from US$1.13 billion a year earlier.
Elsewhere, analysts point to the problem of T-Mobile USA again losing customers in first quarter and that ARPU was over 4 per cent down from a year ago. "These trends are not improving," said industry watcher Will Draper at Execution Noble. "In the longer term they are going to have to invest in a 4G network. They don't have a network that is comparable in quality or speed to competitors like Verizon."
Obermann declined to comment on recent reports that the company was in discussions to become a wholesale customer on hedge fund Harbinger Capital Partner's planned 4G mobile-phone network in the U.S.
For more on this story:
- see this Bloomberg article
Deutsche Telekom: Mobile data will provide future revenue growth
Report: Deutsche Telekom considering T-Mobile IPO or spinoff
Deutsche Telekom CEO tackles 'dumb pipe' worries