Deutsche Telekom chief executive Kai-Uwe Ricke on Thursday dismissed speculation he might quit as the telecoms group battles falling prices and customer flight.
Shares in Deutsche Telekom fell as it cut its profit forecast for this year by 10 per cent and signalled that earnings would be stagnant in 2007, given competition at home.
Shares were 7 per cent off at €11.21, buoyed only by plans to buy back 62.7m shares, the number issued to take over the listed T-Online unit in 2005.
Presenting second-quarter figures at its headquarters in Bonn, Mr Ricke said dealing with the “huge transformation” of the telecoms industry was “a marathon”.
“I’m ready, the team is ready, the management board is ready to take that challenge,” said Mr Ricke, who took over as chief executive in summer 2002.
The company said declining results at its fixed-line unit in Germany were no longer being balanced by the growth of mobile units abroad.
Like other former state-owned monopolies in Europe, Deutsche Telekom is suffering a flight of customers from traditional fixed-line subscriptions to internet and mobile phones. France Télécom has seen earnings from its fixed-line business face pressure from rivals using broadband to offer cut-price VoIP phone deals.
But BT Group of the UK, though warning of broadband price wars, said it saw increasing profit from such “new-wave” activities.
Deutsche Telekom lost 2m old fixed-line accounts and added only 1.1m broadband subscriptions in the year to the end of June. Total lines rose slightly to 50.1m on demand from re-sellers.
Earnings before interest, taxes and other items fell 7.2 per cent to €4.8bn ($6.1bn) while sales grew 2.6 per cent to €15.1bn. Both figures were below analysts’ forecasts.
Earnings before interest, tax and other items were forecast to hover between €19.2bn and €19.7bn, down from €20.2bn-€20.7bn, in 2007.
Sales at the German fixed-line unit fell 5 per cent to €6.1bn and earnings plummeted 7.8 per cent to €2.2bn as companies slashed prices.
Global sales of the mobile unit rose 9.2 per cent to €7.9bn but earnings fell 3.3 per cent to €2.4bn.