The price wars in Germany's telecommunications market took their toll on Deutsche Telekom's first-half results, but the country's dominant carrier yesterday claimed it had halted a decline in its market share and predicted solid full-year figures.
But the acquisitive company gave no indication of where it was planning further purchases, despite speculation that it wants to buy in the US. Last month, it spent most of the proceeds of a share issue on acquiring One-2-One, the UK mobile operator.
At home, the former monopoly - in which 2,500 Irish shareholders took a stake as part of a public offering earlier this year - has been battling to maintain its grip on the fixed-line telephony market since liberalisation of the market in early 1998. Since then, call rates have plunged by an average 60 per cent the steepest cuts in any European market for years as new entrants have carved out market share.
Analysts said German tariff cuts could be close to bottoming out, with only a few of the more aggressive "start-ups" having the stomach for further cuts.
Chairman Mr Ron Sommer said Deutsche Telekom's price-cutting measures had paid off and its market share had stabilised after falling last year. "Given the circumstances, we have competed very well indeed," he added.
Telephone network sales fell 19.2 per cent to 8.5 billion , dragging group sales down by 4 per cent and net profit was back 4.5 per cent.
Analysts said Deutsche Telekom's price-cutting strategy had protected its domestic market share in the long run, but its slow response to the emergence of competition had cost in the short term.
Relations with partners in the Global One alliance recently ran into difficulties over strategy,
Deutsche Telekom shares closed up €2.51 (or 6.5 per cent) at €40.86.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)