Telekom mum on Sprint as earnings beat forecasts

Deutsche Telekom's head declined to comment Thursday on speculation it was looking at buying US mobile operator Sprint Nextel as it reported better-than-expected first quarter results.

Telekom mum on Sprint as earnings beat forecasts
Deutsche Telekom CEO Rene Obermann Photo: DPA

German weekly Der Spiegel reported this week that Telekom was looking to make the most of the strong euro and make a bid for loss-making Sprint Nextel to merge with its T-Mobile USA unit and take on market leader AT&T Wireless.

But speaking in a conference call, chief executive Rene Obermann declined to comment, saying only that in view of recent movements in Telekom’s share price, “certain investors appear to have taken the rumour seriously.”

Net income in the first quarter, adjusted for one-off factors, rose 33.2 percent to €750 million ($1.2 billion), more than €100 million better than the average analyst forecast.

Sales, however, continued to drop due to the weak dollar and pound and cut-throat competition in the German fixed-line telephony market, falling 3.1 percent to €15 billion.

If the dollar and sterling had been at the same exchange rate compared to the euro in the first three months of last year, revenues would have been €500 million higher, Obermann said.

Obermann also said he was satisfied with Telekom’s DSL business. Despite tough competition, the company managed to win 540,000 new customers to hold 43 percent of Germany’s broadband internet market.

But the former monopoly shed a massive 460,000 customers to other providers and Obermann admitted Telekom expected to lose between 1.7 million and 1.9 million traditional telephone connections in this year alone.

The company is also continuing with its rationalization plans. Telekom will cut 13,000 jobs in 2008 and an end to the redundancies is not in sight. “The personnel restructuring is still on the agenda and will continue,” Obermann said.



Google to appeal €500m French fine in copyright row

Google's legal tussle with French regulators continues.

Google to appeal €500m French fine in copyright row
Google to appeal €500m French fine in copyright row (Photo by ALAIN JOCARD / AFP)

Google on Wednesday said it is appealing a decision by France’s competition watchdog to hand it a €500m fine in a row with news outlets over the use of their content under EU copyright rules.

“We disagree with some of the legal elements, and consider the amount of the fine to be disproportionate compared to the efforts we have put in place to reach a deal and respect the new law,” Sebastien Missoffe, head of Google France, said in a statement.

The fine, issued by the French Competition Authority in July, was the biggest in the agency’s history for a failure to comply with one of its rulings.

Head of Google France, Sebastien Missoffe, has hit back against French regulators (Photo by JACQUES DEMARTHON / AFP)

The watchdog said Google had failed to negotiate “in good faith” with media companies in a long-running legal battle over the internet giant’s use of snippets of articles, photos and videos in search results.

The row has centred on claims that Google has used this content in its search results without adequate compensation, despite the seismic shift of global advertising revenues towards the search giant over the past two decades.

In April last year, the French competition authority ordered Google to negotiate “in good faith” with media groups after it refused to comply with a 2019 European Union law governing digital copyright.

The so-called “neighbouring rights” aim to ensure that news publishers are compensated when their work is shown on websites, search engines and social media platforms.

Last September, French news publishers including Agence France-Presse (AFP) filed a complaint with regulators, saying Google was refusing to move forward on paying to display content in web searches.

While Google insists it has made progress, the French regulator said the company’s behaviour “indicates a deliberate, elaborate and systematic lack of respect” for its order to negotiate in good faith.

The Competition Authority rebuked Google for failing to “have a specific discussion” with media companies about neighbouring rights during negotiations over its Google Showcase news service, which launched late last year.

Missoffe insisted Wednesday that Google “recognises neighbouring rights, and we remain committed to signing agreements in France”.

“We have extended our offers to nearly 1,200 publishers and modified aspects of our contracts,” he said, adding that the company has “shared data demanded of us in order to conform to the Competition Authority’s decision”.