German telecoms giant Deutsche Telekom announced a larger-than-expected net loss of €1.8 billion in the first quarter yesterday, a dramatic increase on the same period last year.
McDonald's has dropped a television advertisement in Britain showing a dog attacking England footballer Rio Ferdinand less than 48 hours after it was first aired. The advertisement highlights the burger chain's World Cup promotion but the company withdrew it following a savage attack on a five-year-old girl in Wolverhampton.
The advertisement is still being broadcast here and a spokesman for the company said there had been no complaints and that the withdrawal in Britain was due to local sensitivities.
The British Independent Broadcast Commission received 15 complaints about the advertisement. A second advertisement in the same campaign is equally tasteless and shows a mechanic tampering with the brakes on Teddy Sheringham's car. It will continue to be aired.
A major global television advertising campaign co-ordindated by the British Tourist Authority breaks in Ireland early next month. It is the key element in the British tourism industry's €40 million "Only in Britain. Only in 2002" integrated marketing campaign launched this year.
With a total media spend of €11 million across seven different countries, this is the biggest investment ever on television advertising to promote British tourism.
The campaign aims to attract one million extra visitors in 2002 and generate an additional half a billion sterling for the British economy.
Advertising agencies are pitching for the €600,000 Department of Health national drug strategy campaign.
The contract is for one year and the brief is to devise a powerful campaign aimed at young people.
From Derek Scally,
in Berlin
A 20 per cent drop in pre-tax profits at T-Com, the company's core fixed line, and formerly most profitable division, will increase pressure on Telekom chairman Mr Ron Sommer to resign.
Profits were further dragged down by one-off write-offs from the consolidation of the company's US mobile subsidiary VoiceStream, and goodwill write-offs on third-generation mobile phone licences.
The results drove down the company's stock by 7 per cent to €12.73, a few cent short of a historical low.
The company's first-quarter loss compares badly to the €358 million the company lost in the same period last year.
However, the company said that overall pre-tax profits increased to €3.8 billion in the first quarter thanks to the strong performance of the company's mobile and internet subsidiaries.
"Deutsche Telekom expects a continued healthy revenue growth for the entire year of 2002, particularly driven by mobile telephony," said the company in its official report.
"It would be gross negligence to interpret this as a profit warning," said Mr Ulrich Lissek, spokesman for Deutsche Telekom.
"We will increase revenue and pre-tax profits by a two-figure percentage rate in 2002."
Mr Sommer faces pressure on several fronts. The pressure has been building for months since the German monopoly commission blocked the sale of Telekom's cable network to the US company Liberty Media for €5.5 billion.
Yesterday Mr Sommer rejected as "absurd" speculation that he wanted to sell the T-Online internet division to Microsoft. Small wonder, considering that T-Online was one of the rare sources of profit in yesterday's results. The subsidiary reported revenues of €427 million, an increase of 18 per cent.
The collapse of profits in the fixed-line division and further delays in the sell-off of T-Mobile make it increasingly unlikely that Mr Sommer will, as promised, cut the company's net debt to €50 billion by the end of next year.
Around 44 per cent of Telekom shareholders now want Mr Sommer to resign, according to a survey carried out for financial magazine Focus Money yesterday, while a quarter said he should stay.
