Deutsche Telekom Chief Says Dutch T-Mobile Unit `Not Sacrosanct'

  • Hoettges says carrier seeking strategy for struggling division
  • Company said to work with Credit Suisse on Dutch asset sale

Deutsche Telekom AG Chief Executive Officer Tim Hoettges said no business is untouchable as Europe’s biggest phone company tries to decide the future of its Dutch mobile-phone unit, whose sales and profit plunged last quarter.

While T-Mobile Netherlands is “well-positioned” after having expanded its high-speed wireless network in the country, Deutsche Telekom must and will answer strategic questions regarding a combination of wireless and landline offerings, Hoettges said on a conference call Thursday.

“Nothing is sacrosanct in our portfolio,” Hoettges said in response to a question about the unit. “We will always look if there are better options.”

The German carrier is working with Credit Suisse Group AG on a possible sale of the unit, people familiar with the process said last month. Deutsche Telekom doesn’t own any landline assets in the Netherlands. In markets including Germany, Deutsche Telekom is selling packages that combine home phone, Internet and wireless services.

At T-Mobile Netherlands, earnings before interest, taxes, depreciation, amortization and other items fell 22 percent to 125 million euros ($136 million) in the third quarter. Revenue dropped 8 percent as the unit lost contract as well as prepaid customers.

“Netherlands is a good example where you just operate in mobile in a very competitive market and the numbers reflect that,” said Alex Wisch, an analyst at Bloomberg Intelligence. “For Deutsche Telekom, that only increases the pressure to get out.”

Earlier Thursday, Bonn-based Deutsche Telekom reported a 13 percent jump in adjusted earnings as the euro’s weakness bolstered revenue in the U.S. Competition with Telefonica SA and spending to upgrade networks weighed on profitability in Germany. Group sales rose 9.3 percent to 17.1 billion euros, trailing analysts’ 17.3 billion-euro estimate on average.

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