Hoettges hints at expansion, as Deutsche Telekom turns up heat on T-Mobile US

Deutsche Telekom CEO Timotheus Hoettges has hinted that the company is now well positioned to realise his expansion goals, after the German operator returned to profitability in 2013.


Deutsche Telekom CEO Timotheus Hoettges

Hoettges said a net profit of €930 million ($1.2 billion) and a 3.4 per cent year-on-year rise in revenue in 2013 has left Deutsche Telekom "ideally positioned to become the leading European telecommunications provider".

The new CEO said when he took the helm in January that he would pursue mergers and acquisitions. In the company's results statement, Hoettges said the 2013 earnings "lay the perfect groundwork for 2014" and leave the operator "able to tackle the remaining challenges with rigour".

Those challenges include tackling the downward trend in earnings before interest, depreciation and amortisation--down 12 per cent year on year in 2013--and a 26.2 per cent annual decline in free cash flow.

One London-based financial analyst told FierceWireless:Europe that the declines do not rule out a move by Deutsche Telekom to acquire the Greek government's 10 per cent stake in OTE--a rumour first sparked in early February when Hoettges visited OTE's headquarters in Athens. The German operator already holds a 40 per cent stake in the Greek company.

Deutsche Telekom also used its results statement to ramp up the pressure on potential T-Mobile US suitor Softbank, which is widely reported to be considering a bid for the U.S. carrier via its local subsidiary Sprint.

T-Mobile US gained 4.4 million new subscribers under its own steam in 2013--a further 8.9 million subscribers were added when the unit completed its acquisition of MetroPCS in the second quarter--and the business was the only Deutsche Telekom unit to record a rise in revenue during the year.

Reports in January said Deutsche Telekom has now recouped its investment in the U.S. operator, with the value of the business back at the same level it stood at before a failed attempt to sell it to AT&T in 2011.

Thomas Dannenfeldt, Deutsche Telekom CFO, said the U.S. market "is offering us the opportunity to achieve a different ambition: value-driven customer growth in the United States that translates into an increase in the value of the company".

Hoettges played it cool in an earnings press conference, Reuters reported, noting the company is open to consolidation in the U.S., but is just as happy to keep on running T-Mobile US.

For more:
- see Deutsche Telekom's results announcement
- see this Reuters article

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