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Deutsche Telekom Q3 Profit Rises; Confirms FY09 Adj. EBITDA Forecast - Update
11/5/2009 7:50 AM ET

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(RTTNews) - Telecommunications company Deutsche Telekom AG (DT: News ) Thursday reported higher third-quarter profit, helped by revenue growth, mainly in its overseas business, and cost-cutting measures. Meanwhile, the German company's U.S. wireless operation T-Mobile USA reported lower profit for the third quarter as its revenues dropped 2.3% due to lower service revenues. Going forward, Deutsche Telekom confirmed its fiscal 2009 adjusted EBITDA outlook.

In the third quarter, the company's net profit grew 7.2% to 959 million euros from 895 million euros a year ago. On an adjusted basis, net profit was 1.07 billion euros, down 9.1% from 1.18 billion euros in the prior-year quarter.

The company stated that cost-cutting measures and improvements in efficiency helped to post year-on-year increases in profitability in all operating segments between July and September.

The company also reported quarterly net revenues of 16.26 billion euros, up 5.2% from 15.45 billion last year. Domestic revenues rose 0.6% to 7.20 billion euros from 7.16 billion euros in the prior-year quarter. International revenues reached $9.06 billion, up 9.2% from $8.296 billion in the previous year.

For the preceding second quarter, the company's net profit was 521 million euros on revenues of 16.24 billion euros.

The company's German operating segment generated revenues of 6.5 billion euros, a decline of 2% from the prior-year quarter. The German mobile communications business posted revenue growth of 1.4%, while the domestic fixed-network business' revenue declined 3.5% year-on-year.

T-Mobile USA, Inc., the U.S. wireless operation of Deutsche Telekom, reported third-quarter net income of $417 million, compared to $442 million last year. The company said that certain of the comparative figures in the prior periods have been reclassified to conform to the current period presentation.
T-Mobile's total revenues declined 2.3% to $5.38 billion from $5.51 billion in the year-ago quarter. Service revenues were $4.73 billion, down from $4.91 billion a year ago, hurt by lower Average Revenue Per User, or ARPU.

Blended ARPU was $47, lower than $52 in the third quarter of 2008. Prepaid ARPU dropped to $20 from $24 a year ago, due to fewer Flexpay no-contract customers.

Data services revenue reached $1 billion, an increase of 18% year-over-year.

T-Mobile USA also reported third-quarter contract revenues of $4.2 billion, down from $4.34 billion in the previous year. Prepaid revenues were $382 million, flat with last year. Roaming and other services generated revenues of $154 million, lower than $187 million in the prior-year quarter.

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