Deutsche Telekom sees TV growth in Germany, looks to housing market

Deutsche Telekom added 69,000 TV customers in Germany in the first half of the year, on the back of an increase in broadband connections of 186,000. The company had 9.971 million TV customers at the end of the period, up by 5.6% year-on-year and by 0.9% quarter-on-quarter.

TV revenues in Germany in Q2 amounted to €438 million, up 11% year-on-year.

Elsewhere in Europe, the company’s TV base grew by 3% year-on-year – but only by 0.1% over the quarter – to 5.098 million. Telekom said that “with both telecommunications providers and OTT players offering TV services, the TV market is already saturated in many countries of our segment”.

Speaking to analysts after the telco released the numbers, CFO Christian Illek said that movement of sales channels from shops to online and call centres during the COVID-19 pandemic had not helped sales of TV services, although it had helped boost the sales of other services.

“Our shop distribution footprint is needed in order to drive our TV propositions because that is the product that is hard to explain over the internet or through a call centre, and we rely on the physical shop infrastructure,” he said.

Speaking on the same call, CEO Tim Hoettges said that the decision of the German authorities to force the opening up of the housing association market by phasing out the bundling of telecom and TV services with rental contracts – a business dominated by cable operators including Telekom’s main rival in the German market, Vodafone – would be beneficial to Telekom. He said the telco was having “a deep discussion with the housing associations…to open up 25% of German households to our fibre offerings”.

Analysts at Jefferies noted that Telekom’s “domestic KPIs look strong again in fixed and mobile” and observed that the company “continues to execute well”, highlighting its domestic market service revenue growth of 2%, boosted by mobile.

Deutsche Telekom had 27.4 million fixed network customers at the end of the quarter, flat year-on-year, and 22.1 million broadband customers, up 1.5%. Telekom had 246.6 million mobile customers globally at the end of the period, up 2.1%.

The telco reported €26.6 billion in revenue at the end of the quarter, down 1.7%, and EBITDA of €10.5 billion, up 4.4%.