Deutsche Telekom Posts Loss of $3.82 Billion

Deutsche Telekom, Europe’s biggest telecommunications company, said Wednesday that it lost $3.82 billion in the first half of the year because of the rising costs of an expansion drive by its ousted chief executive.

The loss was worse than analysts had expected and more than 10 times wider than the company’s net loss in the same period last year, despite a 15% gain in sales. The company’s financial statement did not break out second-quarter results.

Interim Chief Executive Helmut Sihler, appointed six weeks ago, has pledged to intensify a turnaround drive begun by his predecessor, Ron Sommer. That plan includes cutting jobs and investment and selling assets to reduce the debt weighing on the company.

Sihler left open the possibility of finding a partner for VoiceStream, Deutsche Telekom’s U.S. mobile phone unit, feeding speculation that the company could lose control of the centerpiece of Sommer’s drive to transform the former German telephone monopoly into a global telecom giant.

“We know what we have to achieve and we can see clearly the path we must take,” Sihler said, promising “there will be no sacred cows” in the restructuring drive.

Under Sommer, Telekom spent billions to extend its wireless business into Europe and North America and acquire licenses for the next generation of mobile phone services. The prospects for that business have faded, and the cost of writing down the value of the assets is eating into earnings at Telekom as well as its rivals.

Telekom said charges for depreciation and amortization on assets including VoiceStream rose by $2.1 billion compared with the year-earlier period. It also wrote down the value of a stake in France Telecom by $247 million.