Deutsche Telekom is to hunt for new acquisitions in emerging markets to beef up its mobile operations as the group seeks to reverse its declining performance.
René Obermann, chief executive, said he was willing to break with the strategy of Kai-Uwe Ricke, his predecessor, by searching for acquisitions outside Deutsche Telekom’s existing markets of Europe and the US.
In an interview with the Financial Times, Mr Obermann said: “We are looking at opportunities...in mobile based on strict financial criteria both within our footprint within OECD markets and beyond.”
Mr Obermann said Deutsche Telekom, Europe’s biggest telecoms group by revenue, needed a “different profile” because its German operations were under revenue and margin pressure.
The scale of the turnround facing Mr Obermann was underlined yesterday when it revealed an 18.9 per cent fall in earnings before interest, tax, depreciation and amortisation for 2006 to €16.3bn.
The fall was partly attributed to restructuring expenses resulting from Deutsche Telekom’s efforts to reduce its 250,000 strong workforce.
Net income was €3.2bn, down 43.4 per cent.
Revenues rose 2.9 per cent to €61.3bn. Sales fell 5 per cent in Germany, but were offset by a 13.6 per cent increase in the company’s international operations, led by the US mobile business.
However, some analysts complained that the turnround strategy revealed with Thursday’s results did not go beyond Deutsche Telekom’s existing plans to make savings of up to €4.7bn by 2010, partly by outsourcing up to 50,000 jobs.
DT’s shares closed 3.8 per cent lower at €13.04.