Deutsche Telekom Changes Strategy After Customer Exodus

Deutsche Telekom said in a statement that its bottom-line net profit declined by 14 percent to 1.01 billion euros ($1.3 billion) in the period from April to June, despite a three-percent rise in revenues to 15.13 billion euros.

Sales growth was solely attributable to foreign business, while the group's domestic activities declined by four percent.

Already on Wednesday, Deutsche Telekom had lowered its annual profit forecasts for the current year, blaming cut-throat competition and fierce price pressures in the German market.

Telekom lost around half a million customers

As in previous quarters, Deutsche Telekom saw an exodus of customers in its fixed-line telephony business, with around 500,000 customers canceling their contracts, three times as many as in the first quarter.

Telekom said it wants to shift gears and defend its domestic market share and turnover by reducing prices and offering clearer price packages.

Like many other ex-monopolists in Europe, such as France Telecom, the German telecoms giant is facing competition not only from new market entrants, but also from mobile phone operators.

Deutsche Telekom's own mobile phone division, T-Mobile, was the main driver of growth in the second quarter, primarily in the United States, where T-Mobile USA won 613,000 new customers in the April-June period.