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Broadband refocus boosts D Telekom

Deutsche Telekom last year gained almost as many new customers for high-speed internet lines in Germany as it lost clients abandoning old-style phone contracts, a sign the restructuring of its domestic operations is bearing fruit.

At the same time, Europe’s largest telecoms group said cost cuts would have to continue to help it recover from a crisis in Germany that is expected to see 2007 profits, due at the end of next month, sag below those seen the year before.

It also said that it had made “major progress” in its search for a partner for the computer-systems integration unit of T-Systems, the corporate services division, a step that is meant to focus Telekom’s portfolio more sharply.

The Bonn-based group said that new pricing and improved service had seen it gain 1.9m new customers for so-called broadband lines, giving it a 44 per cent share of new clients in its home market.
 

That meant the company comfortably reached its target of 40-45 per cent of new users, a goal set by chief executive René Obermann when he took over the group which was reeling from customer flight in late 2006.

However, Telekom still lost a record 2.1m customers last year as it dropped the old-style phone lines of the former state monopoly.

But the company has clearly become more adept at steering defectors to other Telekom products than it was in 2006.

In that year, Telekom lost 2m traditional narrow-band clients and gained only 800,000 broadband users.

Timotheus Höttges, head of Telekom’s narrow-band and internet unit, said declining revenues in voice telephony would force the company, which has recently shed and outsourced thousands of jobs, to seek more cost cuts.

While fighting fires in Germany, Mr Obermann and his team added 7m mobile phone users abroad and 1m new T-Mobile contracts in Germany, including 70,000 Apple iPhone buyers, who had to sign up for two years.

T-Systems head Reinhard Clemens said at a media seminar that a decision about systems integration would come in March.

The FT has learned that Telekom has held talks with Tata Consultancy Services, the IT outsourcing unit of India’s Tata conglomerate, about a transaction that could see 2,500 India-based T-Systems employees join TCS.

Telekom has also talked with Hewlett-Packard and IBM, the US information technology companies, but discussions have not progressed that far.

TCS is thought to be the most likely candidate to join up with T-Systems.

Источник: Financial Times

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