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Telekom to post loss
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November 28, 2001: 4:48 a.m. ET
Deutsche Telekom to post loss as it pays for acquisitions, high-speed licences
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LONDON (CNN) - Deutsche Telekom, Europe's biggest phone company, posted a third-quarter loss on Wednesday because of acquisition and 3G license costs.
Germany's dominant phone company, like rivals British Telecom, KPN of the Netherlands and France Telecom, has accumulated debts betting on high speed wireless services and acquisitions.
The company (FDTE) has spent $15 billion on mobile phone licences across the continent and bought loss-making U.S. wireless operator VoiceStream for $24 billion.
For the full year the company warned it would make a loss. "The group's net income is not expected to be positive." However, it expects revenue to grow by 15 percent for 2001.
Telekom made a loss of  627 million ($555 million) in the three months to September 30, compared with a profit of 4.1 billion for the same period a year ago.
Its third-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) - a measure of a debt-laden companies profitability, -- rose 20 percent to 4.1 billion, as it sold assets and saw strong growth at its mobile division.
T-Mobile, Telekom's mobile phone business that is expected to be floated on the stock market next year, contributed 4.2 billion in revenues in three months to September 30. Its 807 million EBITDA was more than double the year-earlier figure.
Telekom's cash cow unit T-Com, which operates the fixed line network of the incumbent, contributed 6.5 billion, or more than half of the group's revenue, but the figure was lower than the 6.9 billion euros a year ago.
Debt was reduced by 5.8 billion to 65.2 billion in the third quarter, as the company sold its shares in U.S. phone company Sprint PCS for 1.6 billion, the sale of Baden-Wurttemberg cable TV for 900 million and Italian company WIND for 2.33 billion.
Telekom's stock, which has halved in value from a high of 39.85 in January, slipped 0.5 percent to 18.75. Its stock hit a low for the year of 13.12 on September 11.
Its stock is expected to come under further pressure as investors, who were given shares in exchange for their stakes in VoiceStream are free to sell the stocks from December 1.
Telekom's shares have been consistently under pressure since August 7, when Deutsche Bank, acting for an unnamed client, sold 44 million shares in the phone company for about 1 billion ($900million). 
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