Deutsche Telekom reports revenue gain

Citing healthy growth in its fixed, wireless and broadband telecommunication divisions, Deutsche Telekom AG (DT) on Tuesday reported increased revenue in its preliminary report for the first half of 2001, though its debt grew over the period and staff was reduced. The former German telecommunication incumbent also confirmed that it has canceled plans to spin off its wireless subsidiary, T-Mobile International AG in 2001.

The company reported a loss in its net income of 400 million euros (US$339.8 million, as of June 30, the last day of the half year being reported), DT said in a statement.

That loss takes into account a onetime goodwill charge of 1 billion euros, UMTS (Universal Mobile Telecommunications System) costs of 900 million euros and a first-time consolidation charge of 300 million euros from the merger of U.S. wireless operators VoiceStream Wireless Corp. and PowerTel Inc., DT said. The net loss also takes into account the sale of DT's shares in Sprint Corp.'s Sprint FON, DT said. DT reported a net income excluding those exceptions of 600 million euros for the first six months of 2001, an increase of 20 percent from the same period last year of 500 million euros, the company said.

DT did not publish separate figures for its second quarter but said it generated "neutral net income" for the quarter.

Revenue for the first six months of 2001 was up 17.4 percent to 22.6 billion euros, compared to 19.2 billion euros for the same period last year, DT said.

DT increased its net debt in the first half of 2001 by 12 billion euros, bringing its total net debt to 68.8 billion euros, the company said. That is an increase of 21.1 percent over its reported net debt of 56.8 billion euros in the same period last year, DT said. The company cited its acquisition of VoiceStream Wireless and PowerTel, which was finalized on May 31, as the primary reason for the increased debt load in the period.

Despite the increase in debt, the company is committed to paying down its debt and will do so in part with the sale of "other assets in the coming months," DT said.

As of June 30, DT employed 125,900 people, a staff decrease of 5.4 percent -- or 7,228 jobs -- compared to 133,128 employees in the same period last year, the company said.

Sales in its fixed network and broadband services were robust in the first half of 2001, DT said. DT's fixed network business grew over 60 percent over the previous year, with "strong progress" reported in DSL (digital subscriber line) contracts sold, the company said. DT did not cite specific numbers for the period.

Additionally, ISDN (Integrated Services Digital Network) business grew by 4 million channels in the first half of 2001 to a total of 19.3 million ISDN channels, DT said. Driven mainly by residential customers, the company's ISDN channels now account for 38 percent of the total telephone lines in Germany, DT said.

DT's wireless division, T-D1, grew significantly enough in the first half of 2001 to achieve German market leadership, DT said. EBITDA (earnings before interest, taxes, depreciation and amortization) in its mobile communications business was 1.4 billion euros for the first six months of 2001, compared with 600 million euros in the same period last year, DT said.

Deutsche Telekom, in Bonn, can be reached at +49-228-181-0 or at http://www.telekom.de/.

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