European telcos profits crash

T-Mobile UK & Orange UK parents see profits dive

The biggest telecoms companies in the EU, Deutsche Telekom and France Telecom, reported big drops in profit for 2009.

Deutsche Telekom posted a fourth-quarter loss of €3m (£2.7m) in 2009 on revenue of €16.2bn (£14.4bn), up 0.6 per cent on 2008.

For the 2009 financial year, net profit fell 76 per cent year on year - at €353m (£313m) compared with €1.48bn (£1.31bn) in 2008.

The decline has been caused by €2.3bn of asset write-downs attributed to Deutsche Telekom's mobile operator arm T-Mobile UK, and other operations in eastern and southern Europe.

France Telecom, meanwhile, announced a 26 per cent drop in profits to €3bn on consolidated revenues of €51bn, down from 2008's €53.5bn.

The contraction was blamed on charges levied by the EU Commission for illegal tax breaks received before 2003.

Problems at France Telecom were headline news last year as company restructuring was blamed by unions for a spate of stress-related suicides by its employees.

The two big European telcos are currently trying to consolidate their UK mobile operator arms, merging T-Mobile UK and Orange UK into a single entity.

The Orange/T-Mobile merger is currently being looked at by the Office of Fair Trading (OFT) over competition fears.