Deutsche Telekom announces sharp drop in Q1 profits

German telecommunications giant Deutsche Telekom on Friday announced a sharp drop in first-quarter net profits, mainly because of poor showings by its T-Mobile USA subsidiary, which it is selling. Net profits were down 37.4 % on the same period last year at 480 million euros ($699 million), well below the 677 million euros forecast by analysts polled by Dow Jones Newswires. Adjusted Ebitda was down 8.4 % at 4.48 billion euros, in line with expectations, while turnover slipped 7.7 % to 14.6 billion euros. In the United States, where Deutsche Telekom is in the process of selling T-Mobile USA, results were affected by a drop in customers, the company said in a statement. "The negative development in results was largely due to higher market investment and network costs," it added. Deutsche Telekom has announced the sale of T-Mobile USA to AT&T for $39 billion, but the deal still needs the green light from US authorities.