Deutsche Telekom Dutch Unit Denies Report On Job Cuts

Date : 05/24/2011 @ 12:49PM
Source : Dow Jones News
Stock : Liberty Global Plc - Class B Ordinary Shares (MM) (LBTYB)
Quote : 34.4  0.0 (0.00%) @ 4:00PM

Deutsche Telekom Dutch Unit Denies Report On Job Cuts

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Deutsche Telekom AG (DTE.XE) rejected as incorrect a media report that it wants to cut a quarter of its Dutch workforce, a spokesman of T-Mobile in the Netherlands said Tuesday.

Earlier Tuesday, Dutch daily Het Financieele Dagblad reported that T-Mobile Netherlands, fully-owned by Deutsche Telekom, wanted to cut 25% of its 1,900 staff in the country, citing unidentified sources.

"We have to become a leaner and more efficient company," a T-Mobile spokesman said. However, he added there are no concrete plans for job cuts yet.

T-Mobile, the country's smallest mobile network provider with a 24% market share according to research institute Telecompaper, saw its sales decreasing by 5% in the quarter ended March 31. Earnings before interest, taxes, depreciation and amortization, or Ebida, fell by almost 20% on lower sales and higher investments aimed at keeping customers.

Most recently, T-Mobile introduced new rate plans which included set contracts for voice minutes or text messages and unlimited Internet access. Plans start at EUR29.50 for 150 minutes or texts per month, including unlimited mobile Internet. Customers who sign up for a two-year contract get a free smartphone and can use all services free of charge in the first four months.

The unit's move comes at a time when Dutch telecom incumbent Royal KPN NV (KPN.AE) tries to raise prices following an 8.1% fall in its Dutch first-quarter mobile-service revenue, which it blamed on increasing use of voice over Internet protocol services, or VoIP, such as Skype and instant messaging such as WhatsApp.

KPN, which has a 49% market share in the Netherlands, said it won't charge customers for using WhatsApp but T-Mobile forbids its customers from using the service in its latest terms and conditions, despite offering unlimited Internet access.

Instant messaging is becoming increasingly popular in the Netherlands, especially among young customers who often use a smartphone. The trend impacts the telecom providers' sales and was one of the reasons why KPN issued a profit warning in April. KPN came under fire in its home market after it admitted to scanning its customers' data traffic to determine whether WhatsApp or Skype were being used.

The Netherlands's second-largest mobile network provider, with a 27% market share, Vodafone PLC (VOD) said Tuesday it doesn't plan to copy T-Mobile's new rate plans. Vodafone also allows the use of WhatsApp but asks for an extra fee if customers want to use Skype on its mobiles. "We scrapped the fair use policy and implemented new fixed data allowances, charged differently. There are no plans to change this," a local Vodafone spokesman told Dow Jones Newswires.

Competition in the Dutch mobile market could heat up further when a fourth player enters the field. The country's two cable network providers Ziggo and UPC, owned by European broadband provider Liberty Global Inc. (LBTYA), jointly bought mobile spectrum licenses last year, allowing them to offer national mobile services.

-By Archibald Preuschat, Dow Jones Newswires; +31 20 5715 218; archibald.preuschat@dowjones.com




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