This and that:
* Financial Times and Deutsche Telecom
* GlobalOne plans
* New Lead story on NN website
* NN's Cable strategy
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THURSDAY OCTOBER 29 1998 Telecoms
Deutsche Telekom plans price cuts
By Ralph Atkins in Bonn
Deutsche Telekom, Europe's largest telecommunications group, is to react to fierce competition in its home market by unveiling "aggressive" price cuts in the next few weeks which are expected to reduce charges for some long-distance calls by 60 per cent or more.
News of the planned price cuts came yesterday as Deutsche Telekom unveiled net income figures for the first nine months which, although up 22 per cent at DM3bn ($1.8bn), fell short of expectations.
The group admitted market share losses had left adjusted third-quarter revenues unchanged from the same period a year before. The shares ended down DM1.40 at DM44.65.
Since full liberalisation of Germany's telecoms market on January 1, Deutsche Telekom's competitors have taken at least 14 per cent of the long-distance market - and possibly as much as 20 per cent. Competitors have been boosted by Germany's low "interconnection" rate for linking up to Deutsche Telekom's network.
Deutsche Telekom, which is still majority-owned by the state, complained yesterday it was the victim of "one-sided, preferential treatment of competitors".
Details of its price package were not revealed, but the company is expected to simplify its tariff structure and introduce inclusive rates covering internet access and mobile telephony as well as fixed lines. Customers with digital, or ISDN, connections - 20 per cent of Telekom lines - would benefit first.
The tariff changes would require regulatory approval. But the Bonn-based telecoms regulatory authority said the scale of price cuts indicated would represent "a step in the right direction. . .We want competition".
Analysts yesterday downgraded full-year and 1999 forecasts for Telekom - even before taking account of the planned price cuts. James Golob, analyst at Deutsche Morgan Grenfell, warned that price cuts of 50 or 60 per cent would "certainly have a very adverse effect on competitors but could also have an adverse effect on Deutsche Telekom profits".
The loss of market share at Deutsche Telekom was "unprecedented in any other market".
Deutsche Telekom's revenues in the first nine months were up 3.6 per cent at DM51.4bn. It said cost measures already introduced were being accelerated.
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Press Release from Deutsche Telecom:
dtag.de
The number of ISDN and T-Online customers, with growth of 27 % and 26 % respectively since the beginning of the year, continues to develop positively. The number of ISDN channels grew to 9.3 million compared to 7.3 million at the end of 1997. At the end of September, the number of telephone lines operated by Deutsche Telekom totaled 46.0 million, 1.8 percent more than the figure of 45.2 million at the end of December 1997. At the end of the third quarter of 1998, Deutsche Telekom's T-Online service had a total of 2.4 million subscribers compared to 1.9 million at the start of the year. To ensure the continuation of this trend in online communications, all T-Online customers will receive two free hours and 10 MByte of free stor-age space for their personal homepage as of November 1, 1998.
Product and price campaign for T-Online:
dtag.de
GlobalOne plans:
global-one.net
While looking for something else, I stumbled a new lead story on NN's website:
newbridge.com
And that led to another discovery, this time NN's cable strategy:
prodweb.newbridge.com
Considering AT&T's announcement earlier today, I would imagine cable interoperability will become increasingly important:
newsalert.com |
