|
 |
 | | | | | |||||||||||||||||||||
| | You are in: Business | |||||||||||||||||||||||
 | | Tuesday, 19 March, 2002, 17:27 GMT Woes mount for Deutsche Telekom  Telekom has earned a bad name among investors Deutsche Telekom, Europe's biggest phone company, has said it will miss a key debt-reduction target, cut its dividend, and postpone the flotation of its mobile unit. The news came as the firm suffered the double blow of increased regulatory pressure, and failure of a deal to spin off regional cable units to a US bidder. Deutsche Telekom had pledged to cut its debt by about one-fifth to 50bn euros (�31bn; $44bn) before the end of the year, facing the wrath of increasingly disappointed shareholders. Now that deadline has been pushed back for another year, and the firm has said it will cut its proposed dividends by 40%. At the same time, the stock market debut of T-Mobile, the firm's cellular division, has been postponed from the first half of this year. Regulatory headaches The main motivation behind the Deutsche Telekom announcement was the authorities' decision last month to block the sale of six regional cable companies to Liberty Media for about 5.5bn euros.
But Deutsche Telekom's relations with regulators have soured badly in recent weeks, a sentiment exacerbated by this week's ruling that Telekom can charge competitors only one-third of the amount it wanted to use its phone lines for high-speed internet access. Telekom spokesman Stephen Broszio said the company was "astonished" at the decision, arguing that it did not reward the firm for its investment in its network. Gloomy outlook The latest series of announcements is likely to spell more bad news for Telekom's shares, which have already lost one-third of their value over the past year. Credit-rating agencies, a key influence on investor sentiment, are seen likely to downgrade the company. Earlier this month, Deutsche Telekom posted its first full-year loss - 3.5bn euros - since its 1996 stock market listing. Like its industry peers, Deutsche Telekom has been hit by the slump in hi-tech investment, and by the massive costs associated with new telecom technology. But the company has been particularly hard hit by the perception that it is weakly managed, opaque and unable to stand up to unrestricted competition. The slashed dividend scared off investors and pushed Deutsche Telekom's stock 2.35% lower to 16.65 euros by 1700 GMT. | | See also:  Internet links: The BBC is not responsible for the content of external internet sites Top Business stories now:  Links to more Business stories are at the foot of the page. | |||||||||||||||||||||
|
Links to more Business stories |
 | | ^^ Back to top News Front Page | World | UK | UK Politics | Business | Sci/Tech | Health | Education | Entertainment | Talking Point | In Depth | AudioVideo ---------------------------------------------------------------------------------- To BBC Sport>> | To BBC Weather>> ---------------------------------------------------------------------------------- © MMIII|News Sources|Privacy  |
E-mail this story to a friend