T-Online spends, spends, spends to win customers

Short term pain for long term gain

T-Online, Europe's biggest ISP, is to launch a number of new products such as internet telephony next year in a aggressive move to win more customers.

The Deutsche Telekom-owned company will introduce a DSL resale product and a Voice over IP (VoIP) service in Germany - and plans to go large on mass market entertainment, the company said today.

It also plans to make customer gains in its "most important international markets" in France and Spain.

Upshot? T-Online "expects to be able to increase EBITDA (earnings before interest etc) to over €2bn (£1.4bn) over the next ten years", the company said.

Snag? the ISP will take a short-term hit on profits. "As a result of a considerably more aggressive market approach, in particular due to customer acquisition costs associated with the new initiatives, EBITDA is forecast to fall by €100m - 200m (£70m -£140) in 2005 compared with the current year for which T-Online forecasts EBITDA to grow to around €460m (£321m)."

T-Online - which has some 13.4m net users - "anticipates a sustained strengthening of its market position within the European broadband market". Which is nice. ®

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