* Q2 core profit 4.43 bln euros vs 4.35 bln expected
* Still sees stable 2014 core profit of about 17.6 bln euros
* No comment on sale process of T-Mobile US
* Deutsche Telekom shares indicated to open up 0.3 pct
(Recasts, adds shares, detail, background)
By Harro Ten Wolde
FRANKFURT, Aug 7 Deutsche Telekom
reported a bigger than expected quarterly core profit on
Thursday after a rise in earnings in the United States offset
heavy investments in its German networks.
Second-quarter earnings before interest, tax, depreciation
and amortisation (EBITDA), excluding special items, rose to 4.43
billion euros ($5.9 billion), above the average forecast of 4.35
billion euros in a Reuters poll.
Last week, T-Mobile US reported its first net
profit in a year, raised its forecasts for subscriber growth and
reported the most post-paid phone subscriber additions in the
Deutsche Telekom now faces a tough decision on whether to
stay in the United States after its preferred strategy of
selling T-Mobile US to its bigger rival Sprint crashed
into a regulatory wall.
The German operator has been looking for a way to exit the
United States for more than three years because it sees
T-Mobile's fourth-place position behind Verizon, AT&T, and
Softbank's Sprint as limiting long-term profitability.
Sprint's decision to pull the plug on deal talks on Tuesday
came shortly after French mobile operator Iliad made an
offer for the business, sparking hopes for a potential bidding
The chairman of the second-largest U.S. satellite operator
Dish Network Corp said on Wednesday it now made sense
to consider bidding for T-Mobile US, with Sprint out of the
The German telecoms operator did not make any comments about
the process in its earnings statement. A spokesman declined to
comment on the matter and referred to a conference call with
Deutsche Telekom's management due at 0800 GMT.
The global telecoms industry is in the midst of a wave of
dealmaking, as companies look to take advantage of low interest
rates to build economies of scale. In Europe, mobile operators
have seen revenues shrink in recent years because of regulatory
changes such as roaming fees and tough price competition.
In its home base Germany, Deutsche Telekom is up against No.
2 carrier Vodafone, which has bought Kabel Deutschland
to boost its broadband offering. Third and fourth-placed mobile
groups Telefonica Deutschland and KPN's E-Plus
last month received EU approval to merge.
Deutsche Telekom shares were indicated to open 0.3 percent
higher, in line with the German blue chip index.
"Our strategy so far has been to make bold and prudent
investments, focus first on lifting customer numbers, and then
on upping revenues and results. And we are now starting to reap
the rewards," said Chief Executive Tim Hoettges in a statement
The company said it still expected 2014 EBITDA, excluding
special items, to remain stable at around 17.6 billion euros in
2014 and that free cash flow would drop to around 4.2 billion
euros on additional investments.
($1 = 0.7470 euro)
(Editing by Maria Sheahan and David Clarke)