Deutsche Telekom issued a second profit warning in six months today.
It blamed fierce competition in Germany and the weak US dollar for a cut of up to €1.2 billion from 2007 forecasts.
The company forecast a fall in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to €19 billion this year, compared with a previous forecast of €19.7-€20.2 billion, and lower sales than it had expected.
The company said "modest" sales growth would be less than expected this year, primarily due to its struggling fixed-line business in Germany, which is under attack from a slew of resellers offering discounted DSL broadband packages.
EBITDA in this business would be €800 million less than previously expected, the company said, partly due to extra investments in service and marketing necessary to shore up its customer base and catch up with the competition in DSL.
T-Mobile, the group's profit driver, would also be hit by a fall in Germany in termination charges - which it charges other operators to connect to its network - and a weaker US dollar, meaning lower revenues from its thriving US business.