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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.

Published: 8 May 2008 18:28 CEST

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.

afp/dpa

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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