Wireless Gives Deutsche Telekom a Lift
While overall group revenues of €61.7 billion ($77.9 billion) were slightly lower than 2007's total, the carrier's adjusted EBITDA (that's earnings before regular costs such as tax and one-time charges) was up slightly to nearly €19.5 billion ($24.6 billion), higher than expected, and net income more than doubled to €1.5 billion ($1.9 billion).
The carrier's even bullish enough to expect its adjusted EBITDA to be at about the same level in 2009, despite the global economic meltdown, and showed its confidence today by announcing a dividend of €0.78 per share.
The operator's wireless operations are the main reason for that confidence. T-Mobile US Inc. performed particularly well in 2008. (See T-Mobile USA Reports Q4.)
Revenues from DT's mobile businesses in Europe and the U.S., which boast 128.3 million customers in total, were up 2.4 percent to €35.6 billion ($45 billion) in 2008, while revenues from group fixed network operations (voice, broadband, and IPTV) dipped 6 percent to €21.3 billion ($26.9 billion).
Now the carrier is pulling these two operations together. The carrier has reshuffled its management team and reorganized its reporting structure to reflect the operational combination of its fixed and mobile activities. (See DT Revamps.)
"Integrating fixed and mobile communications will enable us to maximize the strengths of our international group to an even greater extent," stated chairman René Obermann in a speech to investors Friday morning.
"In the future, we will focus even more heavily on combined product development and product innovation," he added. "What is more, centralized management, particularly in the areas of procurement, and network and IT management, will help us reduce costs."
It's that ongoing focus on costs that has helped DT's overall fiscal health. Its cost cutting program to date has reduced its expenses by €4.1 billion ($5.2 billion). Part of that program has involved a reduction in headcount: The carrier's global workforce was 227,700 at the end of 2008, 13,700 lower than a year earlier.
What it didn't reveal among its multitude of statistics is what it's expecting to spend on its networks and systems in 2009. In 2008 its capital expenditures totaled €8.7 billion ($11 billion), up 8.6 percent from 2007's outlay. A DT spokesman tells Light Reading it doesn't provide capex guidance, adding only that the carrier is still "willing to invest" in its networks.
Yesterday, Spanish carrier Telefónica SA (NYSE: TEF) announced 2009 capex cuts of more than 10 percent. (See Telefónica Slashes Capex by 10%.)
— Ray Le Maistre, International News Editor, Light Reading