Deutsche Telekom, Europe’s largest carrier by revenue, saw increasing profits in the first quarter of 2015, exceeding expectations. Revenue rose 13.1% to $18.84 billion, and adjusted earnings before interest, taxes, depreciation and amortization increased 11% to $5.16 billion, beating the $4.98 billion predicted in a Reuters poll of analysts.
While a good portion of the increase can be attributed to a favorable dollar to Euro exchange rate, and DT’s U.S. operations, CEO Timotheus Höttges saw the results as vindication of the company’s overall strategy.
“We are the integrated European telecommunications group with a growth profile. We work hard at this and for this,” Höttges said. “It has been some time since we have seen positive indications for revenue and earnings in our industry. Our clear strategy with strong investment is paying off.”
DT owns 66% of T-Mobile US, and has been aiming to beat rival Sprint to become the nation’s third-largest mobile operator. In April, when T-Mobile US posted results, the operator showed growth that outpaced competitors, including 1.8 million net customer adds which brought its total base to 56.8 million. Revenue also increased by 11.7% to $7.7 billion, with adjusted EBITDA rising by 18.4% to $1.4 billion.
In DT’s home market of Germany, the gains were more modest, but there was still growth. The company’s revenue from mobile services rose 2.8%. LTE customers increased to more than 6.4 million – a fact the company attributed to the introduction of new rate plans and the launch of the iPhone 6.
DT is spending heavily to build-out its network in Germany, increasing population coverage and transmission rates. In the first quarter, DT’s investment in Germany increased to about $1.07 billion.
And there may be more spending on the horizon as Germany opens up its spectrum auction, which will include the 700 MHz band, on May 27.
More telecom news from Europe, the Middle East and Africa:
• Vodafone earned most mobile complaints in U.K. While competitor EE held this dubious honor last year, Vodafone was the most complained about mobile operator in the U.K. this year, according to regulator Ofcom. However, EE topped the list of complaints for its broadband and landline service. The full report can be seen here (PDF).
• Numericable-SFR raises profitability target. In its first full quarter following the merger of Numerciable and SFR, the French telecom group increased its medium-term profitability target on May 12. The company’s results also showed that it was losing mobile and broadband market share as it focused on high-end customers. However, Numericable-SFR’s operating profit exceeded expectations, according to Reuters, because of aggressive cost cuts.
• Safaricom taps Ericsson for network upgrade. Kenya’s largest mobile operator, Safaricom has signed a multiyear agreement with Ericsson to upgrade and expand its converged mobile network infrastructure. Ericsson will deploy Wi-Fi technology for the first time on the Safaricom network. The company will also expand and enhance the MINI-LINK microwave transmission network.
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