Deutsche Telekom is the biggest of Europe's "Big Four" telecoms providers, ahead of Telefonica, Vodafone and Orange. The company dominates the fixed line and broadband sector in its home market of Germany, while aggressive expansion of its wireless subsidiary T-Mobile through acquisition has given the group a commanding position in Central and Eastern Europe as well as a presence - for the time being at least - in the US. However that shopping spree also created a huge mountain of debt. Telekom's share price tumbled in 2002, causing an outcry from ordinary investors as well as the German government, still its controlling shareholder. That led to the departure of the group's executive chairman. His successor attempted to streamline the group to consolidate its worldwide interests and reduce debt, but performance remained disappointing. He too was forced to resign in late 2006. After several years of wrestling with overall performance, the group took the decision to reduce its mobile presence in the UK by joining forces with Orange, and later underwriting the sale of that EE JV to BT, in which it is now a significant minority shareholder. It has also attempted to reduce or eliminate its exposure in the US. That subsidiary is now publicly quoted, and there have been years of negotiations, so far unsuccessful, to merge the business with rival Sprint.
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Adbrands Weekly Update 16th Nov 2017: As had previously been anticipated, Deutsche Telekom's massive pan-European media budget moves from long-time incumbent Mediacom. A significant part of the business transfers to sister agency Mindshare, but with less responsibility than was previously enjoyed by Mediacom. According to Telekom's VP, marketing communications Christian Hahn, "The media business has changed completely. We want to be masters of this development and steer the media strategy much more independently. We can not completely delegate that to an agency." As a result, Mindshare has been confirmed only as the agency for traditional planning and buying. Media strategy will now be handled inhouse at Telekom. Three other contracts - for programmatic buying, media analytics and search marketing - are also up for grabs but the results will not be announced until early next year.
Adbrands Weekly Update 9th Mar 2017: The sale of EE to BT left Deutsche Telekom nursing a €2bn loss for the final quarter of 2016, but overall performance for the year was good. Revenues were up almost 6% to €73.1bn, while operating profit jumped 30% to €9.2bn. However, Telekom took a €2bn charge against the shareholding it received in BT as a result of the EE deal, reflecting the newly discovered problems in the British company's IT services division. That cut Telekom's full year profit to €2.7bn, down almost 18% on the year before. The biggest contributor to growth overall was T-Mobile USA, where a big lift in mobile customers (to over 71.4m by year's end) prompted a 17% increase in revenues. The US now contributes 46% of Deutsche Telekom's revenues, compared to 34% from Germany.
Adbrands Weekly Update 20th Aug 2015: German out-of-home and online group Stroeer will become that country's biggest digital media owner by far with a deal to acquire the online operations of Deutsche Telekom for around €300m in cash and shares. Stroeer will take charge of the T-Online web portal - the country's most visited by far at over 25m monthly visitors - as well as sales and development agency Interactive Media. Stroeer is already the #1 online marketer by unique users, managing a large collection of smaller specialist sites (including GIGA, Kino and Spieletipps). Interactive Media is the #3, as a result of T-Online and Q&A service Gutefrage.net. Telekom will end up with a holding of around 13% in the merged group, which will have sales in excess of €1bn. Combined unique users are expected to reach 45m per month, ahead of Axel Springer at around 33m. Springer had for years been rumoured as a possible buyer of T-Online, but recently forged its own digital joint venture with rival Funke, owner of the WAZ media group.
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