FRANKFURT (Reuters) - Deutsche Telekom's (DE:DTEGn) German mobile service revenue slid 0.4 percent in the third quarter, extending a slowdown that took hold in the second quarter despite market consolidation that was expected to support prices.
The former state monopoly reported strong results in its fixed-line business and said the decline in mobile was due to all the discounts given to customers buying combined fixed and mobile packages being booked against mobile revenues.
But the trend in Deutsche Telekom's home market and biggest profit contributor unnerved investors, and the stock fell 1.4 percent by 0831 GMT on Thursday.
"Management suggests that mobile top line is unduly punished by fixed-mobile convergence discounts, but those are permanent (not promotional) and the trend is softening," wrote Jefferies analysts, who have a "hold" recommendation on the stock.
"Given the importance of mobile trends to Deutsche Telekom's market perception, this could be an issue."
Rival Telefonica (MC:TEF) Deutschland (DE:O2Dn), which bought E-Plus a year ago to create Germany's biggest mobile operator by subscribers, raised its profit forecast on Thursday thanks to a speedier-than-expected integration.
As a whole, Deutsche Telekom's German and group results were broadly in line with expectations, and the company confirmed its full-year targets.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in Germany fell 2 percent to 2.27 billion euros.
Growth for the group was driven by Deutsche Telekom's U.S. mobile business (O:TMUS), now its biggest unit, which reported large revenue and profit gains last month but missed expectations as it spent heavily to win customers.
Group adjusted EBITDA rose 13 percent to 5.16 billion euros on revenue up 9 percent to 17.1 billion euros.