Deutsche Telekom Q4 loss more than doubles to $1.8 billion on writedowns in US, Greece

FRANKFURT - Writeoffs for the fallen value of its US and Greek businesses pushed telecommunications company Deutsche Telekom to a loss of €1.34 billion ($1.77 billion) in the fourth quarter.

That more than doubled losses of €514 million in the same quarter a year ago. Revenues fell 3.7 per cent to €14.9 billion.

The Bonn-based company said Thursday that accounting writedowns on businesses in the U.S. and in crisis-stricken Greece amounted to €3.3 billion, more than wiping out the €2.3 billion cash payment from AT&T in compensation for the termination of an agreement to buy Telekom's US business T-Mobile USA.

The companies abandoned the $39 billion deal after the U.S. Justice Department went to court to block it on the grounds that it would mean higher prices and less choice for consumers.

Deutsche Telekom said Thursday it also saw continued erosion of its fixed-line business in Germany, which lost 295,000 subscribers, and tough competition and slack economies in some of its markets in Europe. Earnings fell in Greece, which is in a debt crisis and deep recession, as well as in Poland, the Czech Republic and Austria.

The U.S. business, which lost 800,000 customers in the fourth quarter, suffered from the launch of the new Apple iPhone model by three major national competitors in October. It posted a loss of €2.95 billion on an operating basis, excluding interest and taxes. The U.S. workforce fell by 12 per cent to 32,700.

The company said it would use new frequencies it received as part of the termination of the T-Mobile USA sale and additionally invest $1.4 billion to begin offering services on the new mobile phone standard called Long-Term Evolution, or LTE, in the coming year.

The company set a cautious outlook for the year of around €18 billion in operating earnings excluding financial items, which compares to €18.9 billion last year.

"In 2011, the company operated in a challenging environment in every respect, a situation that is not going to change this year," said CEO Rene Obermann. "Our capacity for innovation, cost discipline, and readiness for change are vital assets as we prepare to master these challenges in 2012, too."