Deutsche Telekom reported a 0.5% fall in group revenues on an organic basis for the first quarter of 2023, as equipment sales in the US declined 20% year-on-year. Group service revenue was up 2.6% on an organic basis.
DT ascribes its growth to "its network leadership". Its FTTH (fibre-to-the-home) network now passes almost 14 million European homes, up by 3.1 million households year-on-year. In Germany, DT claims to cover 95% of the population with 5G, up from 92% a year earlier.
As the group expands its FTTH footprint in Germany to cover 10 million homes, DT is still targeting an average capex cost of 1,000 euros per home passed, despite inflation.
However, only 769,000 of the 5.7 million homes passed by the FTTH network today in Germany are actually FTTH customers. That represents a penetration of about 13.5%.
Timotheus Hottges, CEO of DT, said that the group has to drive that penetration figure up to the "high 30s" in 2024 (presumably for new homes passed). "We have to find a way that we can shut down our copper network," he added. "We are working on this with the regulator. And the moment where we can migrate all our customers into the FTTH network, that would definitely help us from the utilisation amortisation big time as well from the energy costs and other things. This would be the game changer for us. But it's too early to speculate when that is taking place. But we are discussing and ran some pilots here in Germany how this migration can take place."
DT is also looking to increase its TV subscribers in Germany by about 50% to 6 million, having bought the European Championship rights for 2024 for Germany exclusively. Christian Illek, the CFO, described TV as a very profitable business. Source: DT collateral
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