European telcos profits crash

Dave Bailey, Computing, Thursday 25 February 2010 at 17:08:00

France Telecom and Deutsche Telekom profits in steep decline

The biggest telecoms companies in the EU, Deutsche Telekom and France
Telecom, reported big profit reductions for 2009.

Deutsche Telekom posted a fourth quarter loss of ?3m (�2.7m) in 2009,
compared with a corresponding loss of ?730m (�647m) in 2008, on revenue of
?16.2bn (�14.4bn), up 0.6 per cent on 2008.

For the 2009 financial year, net profit fell 76 per cent year on year - at
?353m (�313m) compared with ?1.48bn (�1.31bn), with revenues up 4.8 per cent at
?64.6bn (�57.2bn).

The decline has been caused by ?2.3bn of asset write-downs attributed to
Deutsche Telekom's mobile operator arm T-Mobile UK, and other operations in
eastern and southern Europe.

Neighbour, France Telecom, announced a 26 per cent drop in profits to ?3bn on
consolidated revenues of ?51bn, down from 2008's ?53.5bn.

The contraction was blamed on charges levied by the EU commission for illegal
tax breaks received before 2003.

Problems at France Telecom were headline news last year as company
restructuring was blamed by unions for a spate of stress-related suicides by its
employees.

The two big European telcos are currently trying to consolidate their UK
mobile operator arms, merging T-Mobile UK and Orange UK into a single entity.

The Orange/T-Mobile merger is currently being looked at by the Office of Fair
Trading (OFT), over competition fears.

Full story at http://www.computing.co.uk/computing/news/2258554/european-telcos-profits-crash