DT profits hit by merger costs

Deutsche Telekom saw profits slip almost 10% in 2Q10, due to the cost of deconsolidating its UK mobile arm and lower European revenues.
 
Group profits fell 8.8% to €475 million during the quarter as revenues fell 4.4% to €15.5 billion, due mostly to lower sales and higher costs at its European businesses.
 
Merging T-Mobile UK with Orange cost the telco €200 million during the quarter, while cuts in termination charges and fierce competition in the European market resulted in a 20.4% drop in regional revenues to €4 billion in 2Q10.
 
The telco’s US operations fared better, with revenues at T-Mobile USA up 6.9% to €4.2 billion.
 
Group EBITDA fell 10.9% to €4.48 billion, resulting in a margin of 32.3%.
 
The results beat analyst expectations for revenues and EBITDA during the period, Bloomberg reported.
 
Deutsche Telekom was also buoyed by its 1H10 performance, when it overturned an operating loss of €0.6 billion with a profit of €1.2 billion.
 
"On the basis of these good first six months, we can once again confirm our guidance," CEO René Obermann said.
 
"We have achieved one of our key goals, that of making our business in Germany competitive again,” Obermann added.

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