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Deutsche Telekom lifts profit view, aims for T-Mobile majority soon

Published 08/11/2022, 01:12 AM
Updated 08/11/2022, 09:41 AM
© Reuters. FILE PHOTO: Brochures with the logo of Deutsche Telekom AG are pictured at the shop in the headquarters of German telecommunications giant in Bonn, Germany, February 19, 2019. REUTERS/Wolfgang Rattay
DTEGY
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By Supantha Mukherjee

STOCKHOLM (Reuters) -Deutsche Telekom on Thursday raised its annual earnings forecast for the second time after beating quarterly estimates, and said it could achieve its goal of a majority stake in U.S. unit T-Mobile much sooner than 2024.

The company has said it wants to own a majority of T-Mobile, which led much of the group's subscriber growth in the second quarter, over the medium term.

Deutsche Telekom (OTC:DTEGY) now expects to post adjusted earnings before interest, tax, depreciation and amortisation after leases (EBITDA AL) of around 37 billion euros ($38 billion) in 2022, up from previous guidance of more than 36.6 billion euros.

Chief Executive Timotheus Hoettgas said buying the majority stake in T-Mobile U.S. was the group's most important strategic project at present.

Deutsche Telekom, which has been trying to cut a debt pile of almost 136 billion euros, last month agreed to sell 51% of its towers business to free up funds to invest in infrastructure and its U.S. business.

The group bought more shares earlier this year in T-Mobile from Japanese conglomerate SoftBank for $2.4 billion, raising its stake in the U.S. company to 48.4%.

Hoettgas said that stake should top 50% in the medium term, and the group could achieve it much sooner than 2024.

T-Mobile, which accounts for three-fifths of group revenue, has been gaining subscribers following its merger with Sprint and as it rolls out its 5G service.

In the latest quarter, T-Mobile added 1.7 million customers who pay their bills monthly, increasing its customer base to 110 million.

Deutsche Telekom reported 54.6 million mobile customers in Germany and 46.5 million in the rest of Europe.

Adjusted EBITDA AL rose to 9.9 billion euros, beating analysts' consensus forecast of 9.84 billion.

© Reuters. FILE PHOTO: Brochures with the logo of Deutsche Telekom AG are pictured at the shop in the headquarters of German telecommunications giant in Bonn, Germany, February 19, 2019. REUTERS/Wolfgang Rattay

Second-quarter revenue rose 5.9% to 28.2 billion euros, in line with estimates.

($1 = 0.9720 euros)

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