German telecommunications with robust growth thanks to us business

German telecommunications with robust growth thanks to us business

German telecom can continue to rely on its booming business in north america ahead of the targeted billion-euro takeover in the u.S. The U.S. Mobile communications business in particular provided renewed momentum for the dax company.

Despite high costs for staff reductions, telekom also earned significantly more in the second quarter than a year earlier, as the company announced in bonn on thursday. Telekom CEO tim hottges said in bonn on thursday that he was "very satisfied" with the progress of the deal.

Growth was again driven by the united states, where T-mobile recorded double-digit growth rates. The u.S. Subsidiary had already presented its figures in july. Shortly afterwards, the merger project between T-mobile US and its rival sprint received basic approval from the U.S. Department of justice, subject to certain conditions.

But the megadeal is still not a sure thing. More than a dozen U.S. States have filed lawsuits against the plan, claiming it is still harmful to competition and prices. T-mobile US does not want to complete the takeover before it is resolved because of legal risks – which could drag on for months.

Together with the european business and acquisitions in the netherlands and austria, revenue at group level was up 7.1 percent to 19.7 billion euros in the spring quarter. Excluding acquisitions and exchange rates, the increase was only 2.9 percent. Profits almost double to 944 million euros. However, this was also due to the fact that a year ago the settlement in the legal dispute over the toll system had cost toll collect around EUR 600 million. This time, special costs were incurred mainly for the job cuts and for the US merger, for example for lawyers.

In germany and especially in the european segment, telekom made further progress. In germany, mobile service revenues increased by 2.4 percent. At telefonica deutschland, the increase was lower at 1.5 percent, and at vodafone a decline in wholesale business with partners even resulted in a small loss in this key indicator for market share.

The business of T-systems, the weakening corporate subsidiary, remained essentially stable. While revenue declined somewhat, order intake and operating profit increased slightly. Special costs for personnel and depreciation nevertheless resulted in losses.

In june, telekom secured frequencies for the fast mobile communications standard 5G at an auction, for which 2.2 billion euros are due – but most of the money will not flow out of the bonn coffers until after the allocation expected at the end of august. Competitor vodafone had already opened the first antennas for 5G users in mid-july, making use of old frequencies. Bonn, on the other hand, wants to wait for the allocation of the new spectrum. "Telekom will play a leading role in 5G, there is no doubt about that in our company – we have better sites and we have certain spectrum positions which will help us."

Telekom is also under pressure from vodafone’s takeover of regional fixed-network provider unitymedia, which will enable its dusseldorf-based rival to significantly strengthen its position on the market. "We will respond to this stronger competition," said hottges, citing cost reductions and a restructuring of the store network as examples of the measures to be taken. "We are looking forward to competition, we will not retreat grouchily now."However, telekom may still take legal action – the company still reserves the right to file a lawsuit, the telekom boss said.


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