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Deutsche Telekom posts modest TV gains

Deutsche Telekom has recorded a modest increase in its TV base for the quarter to June, with mixed results in its central and eastern European operations, amidst a solid overall performance boosted by its US business.

Deutsche Telekom saw its German TV base increase by 1.5% quarter-on-quarter to 3.24 million at the end of June, while its base for the rest of Europe increased by just 0.5% to 4.293 million.

In Germany, where the operator could soon face additional competition from a combined Vodafone and Unitymedia, Telekom also saw only modest growth for fixed broadband – up 0.6% – and mobile customers, with its contract base declining, and a decline in its fixed phone base. In the rest of Europe, broadband and mobile customers rose by 1.3% each.

Telekom was nevertheless able to raise its forecast for full-year earnings thanks to growth in the US, where it is planning to merge its T-Mobile unit with Sprint.

Despite the Q2 slowdown, Telekom’s German TV base – including both IPTV and satellite customers – has increased by 7.1% year-on-year, boosted by stronger gains in the second half of last year. The broadband base has gone up by only 3.1%, but Telekom’s fibre base has increased by 30.3% year-on-year to 6.559 million.

TV revenues in Germany for the quarter amounted to €364 million, up 9%, boosted by new product offerings. Overall domestic revenues declined by 0.9% to €5.322 billion for the same period.

Telekom saw its quarterly net TV adds in central and eastern Europe decline to 22,000 from 27,000 in the first quarter.

In Greece, Telekom-backed OTE saw its Cosmote TV satellite, cable and IPTV base reach 523,000 at the end of June, up 4.4%, underperforming growth in the broadband base of 9.1% to 1.83 million.

Telekom Romania’s TV base, on the other hand, fell by 0.5% to 1.463 million, with the operator’s broadband base declining by 2.1% to 1.117 million.

In Hungary, Magyar Telekom’s TV base grew by 3.9% to 1.045 million, with its broadband base growing by 5.2% to 1.104 million.

In Croatia, T-Hrvatski Telekom saw its TV subscribers increase by just 1% year-on-year to reach 415,000, flat quarter-on-quarter and small decline since the end of 2017. Retail broadband customers declined slightly.

In Slovakia, satellite, cable and IPTV customers were up by 5.4% to 605,000, with broadband customers up 6.8% to 532,000.

In the Czech Republic, Telekom’s local subsidiary saw its TV base reach 57,000 from a standing start a year earlier.

Telekom as a whole posted revenues of €18.4 billion for the quarter, down 2.8%, and EBITDA of €5.9 billion, down 0.3%.

“This was a modest set of financial results with both revenue and EBITDA down. Operationally, the company fared much better and continues to see good growth in fibre and convergent services,” said technology, media and telecoms analyst Paolo Pescatore, commenting on Telekom’s overall results.

“It seems all telcos in Europe are pursuing a similar strategy in convergence but not all will be successful. The outlook remains challenging for Deutsche Telekom in light of the Liberty Global and Vodafone deal. Should it receive regulatory approval, the new entity will pose a formidable force both in Germany and Eastern Europe.”