German telecommunication giant Deutsche Telekom AG (DT) reported Wednesday a third-quarter net loss of 627 million euros ($1.05 billion), a poor showing compared to the 4.1 billion-euro net income posted in the same period last year.
Revenue for the period amounted to 12.5 billion euros ($20 billion), up 25 percent over the 10 billion euros earned in the third quarter of 2000.
For the first nine months of the year, the company posted a net loss of 1 billion euros, compared to net income of 8.4 billion euros in the same period a year ago. Revenue for the first three quarters totaled 35 billion euros, an increase of 19.7 percent over the 29.2 billion euros for the first three quarters of 2000.
But the 2000 results were unusually high, due in part to receipts of 2.9 billion euros from the sale of DT's holdings in corporate carrier Global One Communications Inc., 2.7 billion euros from an initial public offering of shares in DT's Internet subsidiary T-Online International AG, and 3 billion euros from the sale of regional cable TV operators in the German states of North Rhine-Westphalia and Hesse.
The 2001 figures take into account amortization of goodwill amounting to 1.8 billion euros, as well as 900 million euros spent acquiring licenses to operate 3G (third-generation) mobile telecommunication networks in Europe. Without these special items, the comparable net income for the first nine months of 2001 would be 1.7 billion euros, compared with 9.6 billion euros in the same period last year, the company said.
DT said its international operations were a bright spot, bringing in net revenue of 3.8 billion euros in the third quarter, up from 1.9 billion euros last year. But German operations still dwarfed foreign ones, ringing up 8.7 billion euros in revenue for the period, up from 8.1 billion euros in the same quarter last year.
The company's T-Com division, which handles telecommunication services for private customers and small to medium-sized businesses, saw revenue for the third quarter shrink to 6.5 billion euros from the year-ago figure of 6.9 billion euros.
IP (Internet Protocol) data communication and corporate services division T-Systems International GmbH enjoyed significant revenue growth for the same period, from 2.5 billion euros last year to 3.4 billion euros this year. Much of the gain, however, was due to the first-time consolidation of results from consultant and system integrator Debis Systemhaus, a joint venture with DaimlerChrysler AG.
Wireless subsidiary T-Mobile International AG posted revenue of 4.2 billion euros for the third quarter of 2001, up from 2.7 billion euros a year earlier. Newly consolidated subsidiaries played a role in this, including VoiceStream Wireless Corp. and PowerTel Inc. in the U.S., and Czech wireless provider RadioMobil a.s. But DT also attributed the growth to a steady increase in subscribers to its German mobile service T-D1 and its U.K. wireless operator One2One PLC.
DT's Internet operation T-Online International AG also enjoyed strong growth, with revenue for the third quarter at 335 million euros, up from 254 million euros a year ago. The company reported strong subscriber growth, and a sharp increase in portal revenue over the first nine months of the year, "despite a difficult market environment."
The parent company is predicting group revenue to grow by over 15 percent for the full 2001 financial year, though net income "is not expected to be positive."