Deutsche Telekom Cuts 2015 Cash Flow Forecast on U.S. Spending

Deutsche Telekom AG (DTE), Germany’s largest phone company, lowered a forecast for freecash flow as the company plans higher spending to boost its U.S. business. Free cash flow will increase “slightly” in 2015 after reaching 4.2 billion euros in 2014, the Bonn-based company said today in a statement. The company earlier projected free cash flow of about 6 billion euros for next year. Chief Executive Officer Timotheus Hoettges, in office since January, has taken steps to consolidate the operator’s eastern European holdings and is trying to continue subscriber gains at its T-Mobile US Inc. unit. The company has ramped up network investments to gain an edge on Vodafone Group Plc (VOD) and Telefonica SA as competition weighs on prices in Europe’s saturated wireless market. “We could achieve our original ambition level for 2015 of around 6 billion euros if we were to slam the door in the face of the customer rush in the United States,” Chief Financial Officer Thomas Dannenfeldt said in the statement. “That’s not what we want.” Earnings before interest, taxes, depreciation, amortization, some items and acquisitions will be 17.6 billion euros ($24 billion) this year, the company said. Analysts predict 17.5 billion euros, according to the average of estimates compiled by Bloomberg.

Photographer: Ralph Orlowski/Bloomberg

A cyclist passes a Deutsche Telekom AG store in Frankfurt.

Fourth-quarter adjusted Ebitda was 4.06 billion euros. Sales were 15.7 billion euros, helped by the acquisition of MetroPCS Communications Inc. Hoettges told directors yesterday that a sale of T-Mobile US unit is less likely in the near term because of regulatory hurdles, two people with direct knowledge of the matter said. T-Mobile US, the smallest among the four nationwide U.S. wireless providers, has attracted the interest of Japan’s SoftBank Corp., which aims to combine it with its U.S. unit Sprint Corp., people familiar with the matter have said. Source : http://www.bloomberg.com/news/2014-03-06/deutsche-telekom-cuts-2015-cash-flow-forecast-on-u-s-spending.html