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Deutsche Telekom forecasts shrinking fixed-line sales

Europe's biggest telecommunications operator, Deutsche Telekom, said on Wednesday that it expected sales in fixed-line operations to decline by four to six percent this year.

Deutsche Telekom forecasts shrinking fixed-line sales
Photo: DPA

Core earnings were forecast to fall by five to eight percent, fixed-line operations director Timotheus Höttges added during a conference call with journalists. Sales and earnings should stabilise by 2010, Höttges said, stressing that “the message is: we are slowing the decrease.”

Investors failed to get the message, however, and shares in the company plunged 9.67 percent to €10.28 in midday trading, the biggest loser on the Frankfurt stock market, which was down 1.01 percent overall.

Local traders said the announcement was responsible for a quick drop in the telecom company’s share price. “This sounds more like a profit warning to me,” said a Frankfurt-based trader.

The incumbent German telecoms operator has seen about 4.4 million fixed-line clients pull the plug over the past two years amid growing use of mobile phones and complaints about service.

Deutsche Telekom’s German fixed-line operations comprise broadband internet access as well as fixed phone lines. Last year, sales fell by eight percent and earnings before interest, tax and depreciation (EBITDA) dropped by 14 percent on increased competition and lower prices.

Höttges said Deutsche Telekom sought to cut costs in the segment by €1 billion ($1.56 billion), of which €900 million was to be reinvested in customer acquisition. He added the company was targeting 1.6 million new broadband internet customers this year, to bring its market share to around 45 percent.

Höttges said Deutsche Telekom aimed to attain a market share of 73-75 percent in German land lines by the end of the year.

TECH

Cookie fight: Austrian activist in tough online privacy fight

Five years after Europe enacted sweeping data protection legislation, prominent online privacy activist Max Schrems says he still has a lot of work to do as tech giants keep dodging the rules.

Cookie fight: Austrian activist in tough online privacy fight

The 35-year-old Austrian lawyer and his Vienna-based privacy campaign group NOYB (None Of Your Business) is currently handling no fewer than 800 complaints in various jurisdictions on behalf of internet users.

“For an average citizen, it’s almost impossible right now to enforce your rights”, Schrems told AFP. “For us as an organisation, it’s already a lot of work to do that” given the system’s complexity due to the regulators’ varying requirements, he added.

The 2018 General Data Protection Regulation (GDPR) imposes strict rules on how companies can use and store personal data, with the threat of huge fines for firms breaching them.

While hundreds of millions of euros in fines have been imposed following complaints filed by NOYB, Schrems said the GDPR is hardly ever enforced. And that’s a “big problem”, he added.

He said the disregard for fundamental rights such as data privacy is almost comparable to “a dictatorship”. “The difference between reality and the law is just momentous,” Schrems
added.

‘Annoying’ cookies

Instead of tackling the problems raised by the GDPR, companies resort to “window dressing” while framing the rules as an “annoying law” full of “crazy cookie banners”, according to Schrems.

Under the regulation, companies have been obliged to seek user consent to install “cookies” enabling browsers to save information about a user’s online habits to serve up highly targeted ads.

Industry data suggests only three percent of internet users actually approve of cookies, but more than 90 percent are pressured to consent due to a “deceptive design” which mostly features “accept” buttons.

Stymied by the absence of a simple “yes or no” option and overwhelmed by a deluge of pop-ups, users get so fed up that they simply give up, Schrems said. Contrary to the law’s intent, the burden is being “shifted to the individual consumer, who should figure it out”.

Even though society now realises the importance of the right to have private information be forgotten or removed from the internet, real control over personal data is still far-off, the activist said. But NOYB has been helping those who want to take back control by launching
privacy rights campaigns that led companies to adopt “reject” buttons.

 Shift of business model 

Regulators have imposed big penalties on companies that violated GDPR rules: Facebook owner Meta, whose European headquarters are in Dublin, was hit with fines totalling 390 million euros ($424 million) in January.

One reason why tech giants like Google or Meta as well as smaller companies choose against playing by the GDPR rules is because circumventing them pays off, Schrems said.

Thriving on the use of private data, tech behemoths make “10 to 20 times more money by violating the law, even if they get slapped with the maximum fine”, he added.

Contacted by AFP, both companies said they were working hard to make sure their practices complied with the regulations.

Schrems also accuses national regulators of either being indifferent or lacking the resources to seriously investigate complaints. “It’s a race to the bottom,” Schrems said. “Each country has its own way of not getting anything done”.

Buoyed by his past legal victories, Schrems looks to what he calls the “bold” EU Court of Justice to bring about change as it “usually is a beacon of hope in all of this”.

Meanwhile, the European Commission is considering a procedures regulation to underpin and clarify the GDPR.

In the long-run, however, the situation will only improve once large companies “fundamentally shift their business models”. But that would require companies to stop being “as crazy profitable as they are right now,” Schrems said.

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