NCB is still optimistic about Deutsche Telekom's prospects and continues to recommend the stock to its clients. In line with other European telecommunications stocks, Deutsche Telekom is suffering from the aftershock of Germany's third generation mobile phone licence auction.
Since the auction, Vodafone and Deutsche Telekom have lost €12 billion and €10 billion in value due to concerns about their exposure to price competition.
NCB says the company is continuing to focus on international expansion, having recently announced the acquisition of VoiceStream, which will provide it with a strategic foothold in the lucrative US wireless market.
NCB believes the stock price weakness has been exacerbated by concerns that political pressures could prevent Deutsche Telekom from successfully completing the VoiceStream acquisition.
On a brighter note, NCB says subscriber growth is very strong, with 4.3 million new mobile phone customers in Germany in the last six months. The challenge going forward for Deutsche Telekom is to execute its acquisition strategy to expand its global reach and build a dominant position in the telecoms market.
