Telecoms company Deutsche Telekom had net income of €1.5bn in the second quarter of this year, an 8% increase on last year’s figure. Revenue also increased, by 2.6% to €12.8bn. This means the increase in revenue is due largely to the acquisition of other companies and is lower than in previous years.
Its adjusted EBITDA profit rose by 4.6% to €4.9bn, but the number fell 2.4% as reported to €5.6bn in the second quarter of 2018. Deutsche Telekom’s revenues were affected by the continuing decline in revenue from the mobile business.
“The decline is stabilising in the second quarter and this gives us confidence that, after the recent recovery in mobile pricing, we will see some growth of underlying revenue trends in 2019,” said Tim Hoettges, CEO of Deutsche Telekom.
This is not the first time Deutsche Telekom has said this. For the first quarter, it was not able to stabilize the mobile business with sales falling by 3.5% compared to the same period last year.
However, sales of landline telephone service were still rising in the second quarter. And very importantly for the future of the company, low base charges have enabled it to significantly increase its revenues from corporate, internet and digital customers.
The firm added 14,000 new internet and digital customer contracts to its portfolio in the second quarter. If this trend continues, the trend of increasing fixed line revenues will continue to develop for Deutsche Telekom and ensure the company still has a positive margin for its data and internet services.
In the second quarter of this year, revenues for mobile subscriptions were increasing at 4.8% compared to the same period last year. The main growth came from the bundling with fixed-line services.
In addition, the advertising business became stronger in the first half of the year and this led to increases in revenues, but was thus not able to compensate for the decline in mobile in the second quarter.
Nevertheless, the rise in mobile revenues in the second quarter resulted in a positive development in the first half of the year.
As previously stated, the company’s mobile sales have reached a new all-time high. This means that the trend of increasing sales of mobile contracts will continue and even is able to accelerate. For this reason, it is not a question of the future development of Deutsche Telekom. It is already part of the past.