Deutsche Telekom Expects Sales to Fall at German Unit

Updated from 12:25 p.m. EDT

Deutsche Telekom (DT Quote) said that sales and earnings at its combined Internet and fixed-line operation would fall further this year, sending the stock lower by nearly 8%.

Europe's largest telecom group said it expects revenue for its German fixed-line unit to fall between 4% and 6% in 2008 as it struggles to compete with cable all-in-one packages. Adjusted earnings before interest, taxes, depreciation and amortization at the German unit should decline by 5% to 8% this year, according to the company.

Timotheus Hoettges, head of Deutsche Telekom's fixed-line operation, said during a conference call that revenue should stabilize by 2010.

"Our fixed-line strategy is taking off and we will manage to stop revenue decline," he added. "We will succeed in slowing the sales decline compared to last year.''

Shares of Deutsche Telekom were falling $1.42, or 7.9%, to $16.58. Rival Vodafone (VOD Quote) was slipping 3.4% to $29.95, and Telefonica (TEF Quote) was off 9% at $85.51.

Know What You Own: Deutsche Telekom operates in the wireless communications industry, and some of the other stocks in its field include BT Group (BR Quote) and France Telecom (FTE Quote). These stocks were recently trading at ($40.80, -5.51%) and ($32.57, -4.58%) respectively. For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.