Deutsche Telekom started the 2021 financial year with a whopping 32.3 percent increase in sales. The telecommunications group generated sales of 26.4 billion euros in the first quarter. The main driver is the US subsidiary T-Mobile US, which after the Sprint takeover accounts for the lion’s share of the increase in sales.
Strong international business
Without the help of T-Mobile US, Telekom would still have achieved a decent increase in sales, as the business figures for the first quarter of Telekom show. After deducting the sales of the US mobile operator and other effects, there would still have been a sales increase of 7.1 percent on the books.
However, the merger of T-Mobile US and its former competitor Sprint also has disadvantages because it costs money. However, the synergy effects from the merger are much more serious: they should amount to between 2.8 billion US dollars and 3.1 billion US dollars in 2021 alone. T-Mobile US contributes around 16.48 billion euros to total sales. For comparison: Germany’s share is 5.94 billion euros, in the rest of Europe Telekom earned 2.73 billion euros. This means that Telekom continues to implement the majority of its products abroad. 76.4 percent of sales are generated abroad, compared to 69.7 percent in the same period of the previous year.
The European telecom offshoots developed positively. Although the corona pandemic had a noticeable impact on the roaming business, total revenue there increased by 0.8 percent to 2.73 billion euros. 151,000 new mobile phone contract customers were won there. In addition, there are 58,000 new broadband customers and 191,000 customers of bundled offers consisting of landline and mobile communications.
Fiber optics and mobile communications in Germany
The fiber optic business in Germany continues to run at a good level. At the end of the quarter, Telekom had 16.3 million fiber-optic connections (FTTH, FTTC and vectoring), 1.5 million more than in the previous year. In the first quarter alone, 368,000 of them are said to have been added. Around 93,000 new broadband customers were acquired, 10,000 more than in the previous year, it says from the telecommunications group.
In terms of mobile communications, there was an overall increase in customer numbers. Telekom was able to gain around 878,000 mobile phone customers. Telekom now has around 49.1 million mobile phone customers. However, around 3.47 million contract customers turned their backs on Telekom, a change of 13.3 percent.
Fixed network connections fell by 0.2 percent, around 28,000 fewer than in the same period of the previous year.
Telekom’s systems business with T-Systems continues to be problematic, even though the key figures here are largely stable. At 0.9 billion euros, incoming orders are at the level of the same quarter of the previous year 2020. However, sales fell by 4.4 percent to one billion euros.
Group Development’s radio tower business picked up. Sales rose by 4 percent to 282 million euros. In addition, there were cell phone locations in Austria at the beginning of the year. Adjusted for this non-organic growth, the number of locations increased by 1200 to 42,600.
Slightly improved prognosis
The bottom line is that Deutsche Telekom has a group-wide profit of 936 million euros for the first quarter of 2021, 2.2 percent more than before. Adjusted is a minus of 1.6 billion euros, which, according to Telekom, is due to higher interest expenses, depreciation and minority interests. However, the group sees itself on the right path: “We are keeping up the pace and continuing our growth story,” said CFO Christian Illek. Accordingly, the group raised the forecast for adjusted operating profit (EBITDA After Leases): Instead of 37 billion euros, it should now be more than 37 billion euros.
The Deutsche Telekom share price rose by almost 1.7 percent on Wednesday morning after the stock market opened and a drop in the last two days. One share is now worth 16.65 euros.