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Poor results for big names in telecoms

Steve Dinneen
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France Telecom and Deutsche Telekom’s celebration of the merger between their Orange and T-Mobile brands in the UK will be muted after both reported disappointing annual results.

Deutsche Telekom reported revenue of €64.6bn (£57.2bn), up 4.8 per cent on 2008, largely due to acquisitions. But full-year net income plummeted 76 per cent from €1.5bn in 2008 to €353m. Earnings per share were €0.08, compared with €0.34 in 2008.

France Telecom’s full-year income dropped 26 per cent, from €4.1bn in 2008 to €3bn.

It reported revenues of €45.9bn for 2009, down 3.7 per cent and earnings of €16.3bn, a drop of 4.4 per cent. Earnings per share were €1.13, compared with €1.54 in 2008.

France Telecom was hit especially hard by a string of suicides by its workers last year which has led to massive internal restructuring costs. A staggering 37 workers killed themselves in the space of two years.

The firms’ UK brands fared better. Both Orange and T-Mobile had a good Christmas period, with Orange adding 404,000 new customers and T-Mobile 571,000. Orange’s gains were largely down to iPhone sales while T-Mobile benefited from extensive advertising in the pre-paid market.

Orange’s revenues in the fourth quarter were €1.29bn, down from €1.3bn.

Deutsche Telekom chief executive Rene Obermann said: “After a bumpy start, we rounded 2009 off with good results.”

The European Commission this week gave the green light to a long-mooted merger between Orange and T-Mobile that will create the UK’s largest mobile network.

The firms ironed out issues involving the ownership of a section of the mobile bandwidth that allows super fast internet. They offered to hand back 25 per cent to rivals including O2 and Vodafone as well as agreeing to allow 3 to share its mast infrastructure. The deal is expected to go ahead within the next few weeks.