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(Bloomberg) -- Deutsche Telekom AG forecast 2025 earnings that missed analysts’ estimates as Europe’s biggest phone carrier faces slowing growth outside of the US.
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Adjusted earnings before interest, taxes, depreciation and amortization after leases will rise about 4.5% this year to €44.9 billion ($47.1 billion), the company said in a statement on Wednesday. Analysts had anticipated adjusted Ebitdaal of €46.9 billion, according to the average of estimates compiled by Bloomberg.
Deutsche Telekom, Europe’s biggest phone carrier, relies on a majority stake in US operator T-Mobile US Inc. for most of its revenue and profit. While T-Mobile’s financial results last month were upbeat, analysts have forecast growth in Germany and the rest of Europe that may slow this year as the continent grapples with price wars and heavy competition.
Deutsche Telekom has “always had a knack of being able to deliver upside to consensus at some point during the financial year, but we think that might be harder to achieve in the ex-US business in 2025,” New Street Research analyst James Ratzer wrote in a note to investors on Wednesday.
Shares fell 2.2% to €34.22 at 2:30 p.m. in Frankfurt after earlier dropping as much as 5%, the biggest decline since April.
Deutsche Telekom was held back in Germany, its second largest market after the US, by slowing broadband growth. The company added 16,000 customers in the fourth quarter compared to 34,000 the previous period. Chief Executive Officer Tim Höttges attributed the slowdown to increased competition, especially from cable providers.
“We can’t be satisfied with this,” Höttges said in a call with reporters. “We’re improving our competitiveness here, and we want to continue to improve it.”
German results were also hit by a drop in phone sales, a pause in government spending ahead of elections this month and increased health-care costs, while mobile growth remained steady, the company said.
Rival Vodafone Group Plc has also struggled in Germany’s competitive telecommunications market. It was hit by a rule that barred housing associations from bundling TV packages with rent, costing the company half of its TV customers, it said in its third-quarter results this month. Discounting from local competitors like Telefonica SA’s O2 and budget brand 1&1 will also impact mobile service profits, the company said.