LOSS OF MONOPOLY BEGINS TO BITE AT DEUTSCHE TELEKOM

Deutsche Telekom has begun since January to feel the effects of the liberalisation of the national telecommunications market, which has boosted traffic but has also forced the company to cut tariffs and pursue litigation on a number of fronts, facts reflected in the operator's half-yearly results published on July 28. By reducing costs, the world's third telecommunications operator has succeeded in increasing net profits by 18% to DM1.95 billion (USD1.08 billion). This figure is however provisional and bereft of any detail, with the semi-public company, employing a workforce of 186,500, refusing to make any forecasts for 1998 as a whole. A more eloquent figure is that for turnover which increased by 5% to DM34.4 billion (USD19.1 billion) between January and June.

However, the upward trend slackened to 3% from March, half the figure for the first quarter. Deutsche Telekom here points to a reduction in tariffs on March 1 for long-distance and extended calls. The company was left with little choice other than to cut prices owing to competition from the first private telephone services launched at the beginning of the year (Arcor, Mobilcom, Otelo, FON, etc), a trend likely to be repeated, as in the case of the successive rounds of price cutting in the mobile telephony sector. For the present, the rising star of the Internet and the boom in mobile telephony are compensating for any cuts. The T-Online server and T-Mobil have increased their client-base by 21% over six months to 2.3 and 4.6 million subscribers respectively, growth rates far in excess of that for fixed line telephony. Connections have however risen by 1.1% to 45.7 million thanks largely to the success of higher yield digital...