DT: Telcos to Weather the Storm
Hamid Akhavan, the CEO of T-Mobile International AG , told the audience at Dresdner Kleinwort 's German Investment Seminar in New York City on Monday that he is cautiously optimistic that carriers, particularly mobile operators, will "weather the storm well," according to a Dresdner research note.
According to the note, Akhavan said Deutsche Telekom had shown resilience against current economic issues, and that indicators such as mobile usage, subscriber growth, uptake of smart mobile devices, and customer bad debt had not displayed any significant signs that customer behavior has been adversely affected.
The T-Mobile man added that the carrier was not planning any operational changes or changes to its guidance as a result of macroeconomic factors. He also reiterated Deutsche Telekom's financial guidance for 2008, though the Dresdner team noted that that did not come as a surprise: "The market fully expects that to be in the bag," they wrote.
The carrier said in November, when it reported its third-quarter earnings, that it expects to report adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of "around €19.3 billion [$25.4 billion]" for the full year 2008. The Dresdner team expects DT to report adjusted EBITDA (that is, EBITDA discounting non-recurring financial events) of €19.43 billion ($25.6 billion) from group revenues of €61.57 billion ($81.1 billion).
Akhavan's message of financial resilience echoes the statement Deutsche Telekom made in November, when it reported that the "worsening financial market crisis has not yet had an impact on the development of operations." (See DT Reports Q3.)
The Dresdner analysts note that with Deutsche Telekom's management "focusing on execution within its current business portfolio," any merger or acquisition activity is "explicitly 'off the radar' at this time." And "given the operational successes of 2007 and 2008 in fixed broadband, cost cutting, and mobile growth," the current situation "bodes well for DT's stock in our view." (See Carrier Scorecard: T-Mobile and DT Ramps IPTV.)
Deutsche Telekom's share price currently stands at €10.38 on the Frankfurt exchange, down €0.15, or 1.4 percent, today. The stock began 2009 at €11.02, while a year ago it stood at €15.19.
— Ray Le Maistre, International News Editor, Light Reading