Deutsche Telekom reports euro1.34 billion loss

PanARMENIAN.Net - Writeoffs for the fallen value of its U.S. and Greek businesses pushed telecommunications company Deutsche Telekom to a loss of euro1.34 billion ($1.77 billion) in the fourth quarter, The Associated Press reported.

That more than doubled losses of euro514 million in the same quarter a year ago. Revenues fell 3.7 percent to euro14.9 billion.

The Bonn-based company said Thursday that accounting writedowns on businesses in the U.S. and in crisis-stricken Greece amounted to euro3.3 billion, more than wiping out the euro2.3 billion cash payment from AT&T in compensation for the termination of an agreement to buy Telekom's US business T-Mobile USA.

The companies abandoned the $39 billion deal after the U.S. Justice Department went to court to block it on the grounds that it would mean higher prices and less choice for consumers.

Deutsche Telekom said Thursday, Feb 23, it also saw continued erosion of its fixed-line business in Germany, which lost 295,000 subscribers, and tough competition and slack economies in some of its markets in Europe. Earnings fell in Greece, which is in a debt crisis and deep recession, as well as in Poland, the Czech Republic and Austria.

The U.S. business, which lost 800,000 customers in the fourth quarter, suffered from the launch of the new Apple iPhone model by three major national competitors in October. It posted a loss of euro2.95 billion on an operating basis, excluding interest and taxes. The U.S. workforce fell by 12 percent to 32,700.

The company said it would use new frequencies it received as part of the termination of the T-Mobile USA sale and additionally invest $1.4 billion to begin offering services on the new mobile phone standard called Long-Term Evolution, or LTE, in the coming year.

The company set a cautious outlook for the year of around euro18 billion in operating earnings excluding financial items, which compares to euro18.9 billion last year.