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T-Systems to resell its services at cost price to Deutsche Telekom

T-Systems to resell its services at cost price to Deutsche Telekom

Par admin - le 26 janvier 2012

Citing unidentified Deutsche Telekom sources, German newspaper Handelsblatt has reported that an agreement has been reached between Deutsche Telekom and its IT subsidiary. According to the terms of this agreement, T-Systems has undertaken to conduct contracts within the group at cost price, without adding any profit margin.

Let’s remember that the annual T-Systems 2011 revenues are forecasted to reach €9.7bn, representing 17.6% of group revenues (including those of T-Mobile USA). For full year 2011, EBITDA should equal €765m, which represents 4% of the group EBITDA, and an operating profit rate of 7.9%.

In 2010, internal group contracts accounted for 30% of T-Systems’ annual sales (€9.1bn) and generated profit levels that on average doubled those seen in the company's other contracts. If the agreement were to be confirmed, T-Systems would see its EBIT margin fall by around 1%.

Sources: Telecom Paper->http://www.telecompaper.com/news/deutsche-telekom-cuts-internal-fees-for-t-systems-report], [Deutsche Telekom third quarter report 2011