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Financial

Telekom Drops Bomb on CeBIT

HANNOVER, Germany – CeBIT 2003 -- The CEO of Germany's leading carrier Deutsche Telekom AG (NYSE: DT), Kai-Uwe Ricke, set the tone for this year's CeBIT show with his company's 2002 financials: a whopping €24.6 billion loss (see DT Posts €24.6B Loss).

As usual with such spectacular hemorrhaging, most of this came in the form of one-time writedowns; in DT's case an unhealthy €21.4 billion. Naturally the management is putting a positive face on proceedings, saying the company is on track [ed. note: Autobahn to Hell?] and that the mobile business, T-Mobile International AG, is a key revenue growth business.

Meanwhile, analysts were looking for the underlying figures, and the team at Lehman Brothers found them to be "strong," with total group sales higher than expected at €53.7 billion, and the net debt slightly lower than forecast, though still a disturbing €61.1 billion.

CEO Ricke praised the performance of the mobile business, noting its ebullient EBITDA growth (up 61 percent to €1.15 billion), pointing out that T-Mobile USA was doing particularly well.

The operator is set to flesh out some of its 3G plans at this show, though we're not hopeful that the bare truth about capital expenditure plans and signed contracts will be laid out for all to see.

Elsewhere at CeBIT, 802.11 looks set to play a significant role this week, with many of the larger exhibitors (6,526 from 69 countries in 26 halls) having their own access points on their stand. Also present is the Wi-Fi Alliance, which is to make a presentation on the status of the global wireless LAN sector.

Unstrung will be reporting from the show floor (sometimes quite literally, as the lunchtime Wurst can be quite heavy here) during this week until Saturday 15 March, when we'll host a panel debate on location-based services (see CeBIT Debate: Location-Based Services ).

— Ray Le Maistre, European Editor, Unstrung

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