Earnings: Deutsche Telekom Profits Down 35 Percent; T-Mob USA Revenue Up

Deutsche Telekom's second quarter profit dropped 35 percent to 394 million euros ($608.2 million) from 604 million euros ($934 million) a year ago. The company blamed the strong euro and higher interest costs for the decline. Net revenue was down 2.9 percent to 15.13 billion euros ($23.39 billion).

The company's mobile unit T-Mobile, meanwhile, reported revenue of 8.68 billion euros ($13.43 billion), holding stable from 8.65 billion ($13.37 billion) a year ago. Core profit, or adjusted EBITDA, was up 3.4 percent to 2.84 billion euros ($4.39 billion), up from 2.75 billion euros ($4.25 billion) year-on-year.

Earnings Highlights:

T-Mobile USA:

— US operation is "continuing to demonstrate robust development of operations", though the weak US dollar dragged down revenues. Counted in euros, revenue in the first half of 2008 fell 0.8 percent to 6.96 billion euros ($10.76 billion). In dollars, revenue jumped 14.3 percent. Total revenues rose to $5.47 billion from $4.78 billion in the prior-year quarter.

— T-Mobile USA added 668,000 net subscribers in Q2, with 525,000 being the more valuable contract customers. Still the figure was a 22.1 percent drop from 857,000 year-n-year compared to last year, which the network blamed on customers failing to renew their two-year fixed term contract contracts that were imposed on new customers in April 2006 for the first time. During Q2, the network added more than one million MyFaves customers, giving it a total of 6.5 million using the service. T-Mobile USA now has a total base of 31.5 million customers.

— ARPU was $51, down slightly from $52 a year ago. Data ARPU including messaging--17 percent of total ARPU--came in at $8.60 in Q2, up slightly from $8.50 sequentially.

More T-Mob Territories after the jump.

Release | PDF Presentation | Financial Charts in PDF | Conference Call

T-Mobile UK:

— Total revenue dropped 13.8 percent in Q2 to 1.02 billion euros ($1.57 billion) compared with the same period in 2007. Measured in pounds, however, revenue was down .9 percent year on year to £806 million ($1.57 billion). DT blamed "fierce competition" in the UK market for the drop, noting they had to invest more heavily in the market and therefore increased their sales and retention costs.

— 330,000 customers left T-Mobile UK. Combined with the 187,000 that left in Q1, T-Mob UK had 2008 shalf-year losses of 517,000 customers.

—ARPU was £20 ($39), down 4.8 percent year on year from £21 ($41). Data ARPU including messaging came in at £4.40 ($9), or 20 percent of total ARPU, up 2 percent year on year.

T-Mobile Deutschland:

— Total revenue dropped 2.8 percent in Q2 to 1.95 billion euros ($3 billion). Core profit was up 4.3 percent to 773 million euros ($1.2 billion), compared to the same period a year ago.

— Added 1.288 million net subscribers, up .6 percent year-on-year, giving it a total of 38,399 million customers.

— ARPU was 16 euros ($24.73), down 11.1 percent from 18 euros year-on-year. Data ARPU including messaging came in at 3.52 euros ($5.40), or 22 percent of total ARPU, up 2 percent compared to last year.

— iPhone: T-Mobile Deutschland reports the iPhone is enjoying "buoyant demand" and says "the mobilization of the Internet has been advanced considerably by the innovative Apple (NSDQ: AAPL) iPhone."

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