Deutsche Telekom slashes sales forecasts

29 Jan 2007

Deutsche Telekom cut its sales forecast for 2006 as the customer exodus at its fixed-line service continued in the fourth quarter despite the introduction of new tariffs in September, a Dow Jones report said.

The Dow Jones report said Deutsche Telekom also reduced its earnings guidance for 2007, on plans to boost marketing spending amid fierce competition in the German telecommunications market, and due to negative currency fluctuations.

The Dow Jones report said that Deutsche Telekom's sales, based on a preliminary assessment, will come in at 61.3 billion euros ($79 billion), which means it won't achieve its guidance of between 61.5 billion ($79.3 billion) and 62.1 billion euros ($80 billion), as a total of 2.1 million customers canceled their landlines with the firm, almost double the number of customer losses in 2005.

Deutsche Telekom also said it expects earnings before interest, taxes, depreciation and amortization, adjusted for special items, to come in at 19 billion ($24.5 billion), instead of the earlier prediction of between 19.7 billion ($25.4 billion) and 20.2 billion euros ($26 billion), while anticipating a moderate increase in sales in 2007, the report also said.

The report further said Deutsche Telekom will also push ahead with its plans to build-out the reach of its high-speed network to 50 cities by the end of 2007.

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