T-Mobile US buoys Deutsche Telekom in mixed Q2

Deutsche Telekom posted a 13 percent drop in net profit in the second quarter despite the continued success of T-Mobile US.

The telecom giant said its net profit fell to $693 million during the quarter due primarily to increased staff-related costs and heavy network investments in its home market of Germany. Deutsche Telekom posted $6.10 billion in EBITDA, slightly beating analysts’ estimates, while sales climbed 2.2 percent but fell just shy of estimates.

Deutsche Telekom was quick to cite the momentum of T-Mobile, which added 890,000 net postpaid subscribers during the second quarter and 1.9 million total net additions. The third-largest U.S. operator increased its LTE network coverage by roughly 20 million people year over year during the quarter, the parent company said, and now covers 311 million POPs.

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“The strong customer growth had a positive impact on revenue, which increased by 12.6 percent to $9.3 billion,” Deutsche Telekom said in a press release. “Service revenues also increased in line with this trend to $6.8 billion, both growth rates representing the highest in the U.S. mobile industry…. T-Mobile US plans to maintain this growth trend as the year progresses: The earnings target for the full year was narrowed around the average to date and the guidance range for branded postpaid customer additions revised upwards by 200,000 to between 3.4 and 3.8 million.”

Deutsche Telekom has long wanted to spin off its U.S. carrier to hone its focus on European markets, but it reportedly shelved efforts to sell T-Mobile earlier this year to focus on the upcoming incentive auction of 600 MHz airwaves. The parent company has consistently said it’s under no pressure to sell its 65.4 percent stake in T-Mobile, but that it will consider any offer.

For more:
- see Deutsche Telekom’s earnings announcement
- read this Reuters report

Related articles:
Report: Deutsche Telekom shelves sale of T-Mobile as incentive auction approaches
T-Mobile could raise $2B for incentive auction
Report: Deutsche Telekom mulling T-Mobile US's strategy to boost its Dutch carrier

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