Deutsche Telekom shares fall 12% after T-Home outlook

Shares of Deutsche Telekom slid as much as 12% after the company announced that sales at its T-Home unit, which offers land lines and Internet services, would slow this year, an Associated Press report said.

It also quoted Europe's biggest telecom operator saying that it expected pretax earnings at the unit to fall between 5% and 8% in 2008 with sales likely to drop between 4% and 6%.

That pushed Deutsche Telekom shares down as much as 12% before they recovered slightly to €10.54 (US$16.62), or down nearly 7.4% in Frankfurt trading. The figures were not unexpected - T-Home faces tough competition from cable companies and other rivals - but it stoked growing fears that the German incumbent will issue a profits warning. It posted an oprating loss last quarter and is in the midst of restructuring to get rid of 32,000 positions with the aim of reducing costs by €2 billion.

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