T-Online Posts Loss but Betters Expectations

25 January 2001

T-Online, Europe’s number one ISP, beat analysts’ expectations by announcing an EBITDA (earnings before interest, taxes and amortization) loss of 125 million euro ($116.5m) for its 2000 fiscal.

Although the loss compares badly with 1999’s 17.6m euro profit, T-Online can boast an 86% jump in revenues over the year to 797.2m euro and a 70% rise in subscribers from 4.66m to 7.94m.

The ISP blamed the shortfall on losses from stakes in foreign start-ups and the ever-mounting costs of its flat-rate German web service, which has attracted 512,000 subscribers. The latter problem, a result of per-minute network charges by T-Online’s parent Deutsche Telekom, could be alleviated if regulators go through with their threat to force the telecoms giant to offer flat-rate access to the network.

An encouraging sign for T-Online is the growth of revenue from advertising and e-commerce, which jumped from 16.4m euro in 1999 to 110m euro last year. Moreover, ad revenue from Deutsche Telekom dropped below 50% of the total, signifying a growth in third-party ad income.

News source: Financial Times