Deutsche Telekom posts 14% profit drop

Deutsche Telekom's second-quarter net income fell 14% because of the loss of traditional phone users, prompting the company to cut its profit outlook for the rest of this year and 2007, according to an Associated Press report.

Europe's biggest telephone company blamed intense competition in the industry for the decline and CEO Kai-Uwe Ricke said the company would cut prices to fend off budget competitors in its home market, the report said.

"There is no alternative to a rigorous strategy to defend market share in Germany," Ricke said. "The paradise time is over for our competitors."

The company earned 1.01 billion euros ($1.3 billion) in the April-June period, compared with 1.17 billion euros ($1.5 billion) a year ago, the report said.

The report also said sales rose 2.6% to 15.1 billion euros ($19.4 billion), compared with 14.7 billion euros ($18.4 billion) a year earlier, helped in part by better international sales, which rose 12.3% to 6.9 billion euros ($8.8 billion).

Domestic sales were down 4.4% to 8.1 billion euros ($10.4 billion) from 8.5 billion ($10.8 billion) euros a year ago.

Deutsche Telekom cut its pretax profit outlook to between 19.2 billion euros ($25.3 billion) and 19.7 billion euros ($24.6 billion) for this year.

The company said it would simplify and cut its prices this fall with bundled service offers, the report said.

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.