Deutsche Telekom has revealed a first quarter net loss of $1.66 billion. The loss was attributed to a fall in profits in the company’s T-Com fixed line business.
The T-Com subsidiary suffered an 8% reduction in revenues over the fiscal period. The fall in revenues was caused by the 14% price reduction charged to other carriers for use of the company’s network, and the decrease in demand from mobile operators. The company’s T-System subsidiary also announced a 6% fall in revenues. However, there was better news for the T-Mobile and T-Online subsidiaries as they both saw an increase in earnings.
The fall in profits is the latest in a line of setbacks for a company that lost $3 billion last year. Other setbacks include the collapse of the proposed sale of the company’s cable division to Liberty Media and the postponement of T-Mobile’s floatation.
Shares in the German company have fallen to an all time low following its disappointing earnings report and credit downgrade by Moody’s rating agency. CEO Ron Sommer is becoming increasingly under pressure to reduce debt and return the business to full profitability.