DT Profit Nearly Halved in Fiscal 1999

Profit at Deutsche Telekom AG (DT) fell by nearly half in the 1999 fiscal year, due to massive price reductions in the telecommunications market and the cost of acquisitions over the course of the year, the German carrier announced today.

However, DT was able to slightly increase its revenues in fiscal 1999, in spite of the price competition and costs of 35.3 billion euros (US$35.7 billion) associated with acquisitions, DT said in a statement.

Net profits plummeted 45 percent to 1.2 billion euros for the fiscal year ended Dec. 31, 1999, down from 2.2 billion euros in 1998, according to a company statement based on preliminary figures.

Profits were affected by costs of 4 billion euros stemming from goodwill write-offs and start-up costs associated with the acquisitions of U.K. mobile phone carrier One 2 One and a majority stake in Austrian carrier max.mobil Telekommunikation GmbH in fiscal 1999, DT said. The finalized DT purchase of One 2 One is still subject to European regulatory approval.

Sales rose 3 percent to total 35.3 billion euros, up slightly from 35.2 billion euros in 1998. Revenue growth was aided by healthy sales of mobile telephone and online subscriptions, connection fees and systems integration activities, DT said.

Growth was particularly high at DT's mobile phone subsidiary, T-Mobil, which increased its customer base by 65 percent over the previous year. Currently, T-Mobil has some 9.2 million customers, DT said.

Revenues were also boosted by consolidating the results of One 2 One and max.mobil.

DT did not detail its results for the fourth quarter of 1999. Final figures for both the quarter and fiscal year will be released on April 19.

Deutsche Telekom, in Bonn, can be reached at +49-228-181-4949, or at http://www.telekom.de/. One 2 One, in Herts, England, can be contacted at +44-181-214-2121, or at http://www.one2one.co.uk/.

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