Greece drags on Deutsche Telekom sales

 
Steve Dinneen
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Deutsche Telekom expects to close its US deal on time despite facing regulatory scrutiny, as its profits reached the higher end of estimates.

Net profits for the last quarter rose 15 per cent to €1.07bn (£910m), while revenues dropped 4.1 per cent to €10.99bn. Its operations were hit by the Eurozone crisis and government austerity measures, which particularly ate into its business in Greece.

Deutsche Telekom’s biggest operation outside of Germany, a 40 per cent stake in Greek telecom group OTE, suffered a five per cent drop in sales and a 17 per cent fall in net profit.

Deutsche Telekom bought its first stake in the Greek operator in 2008, hoping to benefit from growth in southeastern Europe, but a year later was already forced to write down €1.8bn on the investment. However, analysts were buoyed by the lack of a further writedown similar to that seen by rival Vodafone earlier this week.

Chief executive Rene Obermann said he is confident the AT&T deal – which will see Deutsche Telekom’s US business T-Mobile USA sold to the telecoms giant – will go through, saying it will benefit the US economy.

He said: “We are still convinced that we can keep our schedule for the transaction and that we ultimately, together with our partner AT&T, will get the approval for the transaction – because the sale is positive for the US mobile market as well as for the consumers.”

It is now expected to close in the first half of 2012.