We are downgrading Deutsche Telekom (DT), the top telecom carrier in Germany, to Underperform. Reported earnings and revenue for the last quarter missed the Zacks Consensus Estimates.

Deutsche Telekom continues to face a weak economy with further declines in Germany’s fixed-line telephony business due to intense competition. The company’s domestic and UK operations remain significantly challenged by regulatory pricing pressure.

Moreover, the carrier’s US unit TMobile USA is struggling with declining sales as it contends with aggressive price competition. While Deutsche Telekom remains committed to its cost-cutting initiatives, we account for the increasing debt exposure and higher capital spending levels which may tighten future free cash flow.

Zacks Investment Research

1. (DT) Deutsche Telekom Analysts Downgrade to UnderperformWe are downgrading Deutsche Telekom (DT), the incumbent telecom carrier in Germany , to Underperform...
2. (DT) Is Deutsche Telekom Unit T-Mobile USA for SaleGerman telecom giant Deutsche Telekom (DT) is mulling over spinning off its U.S. arm, T-Mobile...
3. (DT) Deutsche Telekom To Unlock Broadband NetworkGerman telecom giant Deutsche Telekom (DT) has to open its broadband Internet network to rival...
4. (DT) Deutsche Telekom Buying Sprint Nextel?Incumbent German telecom carrier Deutsche Telekom (DT) is evaluating the acquisition of Sprint Nextel (S),...
5. (DT) Deutsche Telekom and France Telecom Merge UK OperationsGerman telecom carrier Deutsche Telekom (DT) and France Telecom (FTE) are finally merging their UK...
6. (DT) Deutsche Telekom Entering Indian Internet SpaceDeutsche Telekom (DT), the largest telecom carrier in Germany, is entering the Indian Internet market...

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