Deutsche Telekom posts €3.9bn first-half loss

German telecommunication giant Deutsche Telekom reported a net loss of €3.9bn (£2.5bn) for the first six months of 2002,...

German telecommunication giant Deutsche Telekom reported a net loss of €3.9bn (£2.5bn) for the first six months of 2002, compared with a €349m net loss in the first six months of last year. The company attributed the loss to depreciation and amortisation relating to newly consolidated companies.

Despite the massive net loss, the company was able to reduce its net debt for the period by €3.1bn (£2bn), Deutsche Telekom said. The company attributed the debt reduction in part to improved cashflow coming from better earnings before interest, tax, depreciation and amortisation and an 18% cut in capital spending.

Deutsche Telekom plans to further reduce the company's net debt to €50bn (£32bn) by the end of 2003, said chairman Helmut Sihler. This debt reduction will be achieved by improved cash flow, aided by a cut in investment as well as by divestments.

Revenue in the first half of 2002 amounted to €25.76bn (£16.5bn), up 14.6% from €22.47bn in the same period a year ago.

Deutsche Telekom is also considering spinning off its T-Mobile mobile phone unit as a separate company.

T-Mobile posted total revenue of €9.14bn (£5,8bn), an increase of 53% largely as a result of companies that were not consolidated for the entire first six months of 2001.

US mobile-phone operators VoiceStream and PowerTel are now included in T-Mobile's balance sheet and VoiceStream in particular showed strong customer growth with about 526,000 net registered customer additions for the second quarter alone, the company said.

T-Com, Deutsche Telekom's fixed-line unit that focuses on national markets, with Germany its largest, saw extremely modest growth in revenue of 1% to €14.84bn (£9.5bn), compared with €14.69bn for the same period last year.

The gain came from the restructuring of the division as well as access charges that were assessed for the first time, in the second quarter of 2002, as a way to offset the reduction in call revenue.

Business services unit T-Systems experienced a 3.5% decline in revenue for the first six months of 2002 to €5.5bn, though the company said a second quarter increase of almost 7% helped to offset losses in the first quarter. The hosting business, IT Services, continues to develop well, while the network services operations remain sluggish.

T-Online, Deutsche Telekom's Internet-provider business, saw an increase in revenue of 22.2% over last year, with the T-Online segment (including DeTeMedien) posting revenue of €864m (£552m), compared with €707m for the same period last year.

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