August 13, 2018 / 5:48 AM / 3 days ago

United Internet profits in line as it eyes 5G gambit

* Q2 EBITDA rises 32.4 pct, in line with expectations

* After adjusting for 1&1 Drillisch deal, EBITDA +10.8 pct

* CEO eyes becoming 4th mobile network operator via 5G round

FRANKFURT, Aug 13 (Reuters) - United Internet posted a 32.4 percent rise in core profits in the second quarter as the internet provider and virtual mobile network operator considers taking part in next year’s German fifth-generation mobile spectrum auctions.

The results, in line with market expectations, were buoyed by the creation last year through a merger of mobile unit 1&1 Drillisch.

On a proforma basis, adjusting for the deal’s impact, earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 13 percent.

Chief Executive Ralph Dommermuth has floated the idea of bidding for 5G licences, potentially disrupting a market dominated by three major players - Deutsche Telekom, Vodafone and Telefonica Deutschland.

But for that to be viable, the regulator would have to allow national roaming - enabling United Internet to provide coverage in urban areas while allowing it access to the networks of other operators elsewhere, the company says.

United Internet reiterated its guidance for revenues of 5.2 billion euros ($5.9 billion) this year, up from 4.21 billion last year. It sees EBITDA at 1.2 billion euros, compared with 980 million in 2017.

1&1 Drillisch, in which United Internet owns a 73 percent stake following last September’s merger deal, said its EBITDA had risen by 61.9 percent in the first half - or 20.4 percent on a proforma basis.

It confirmed its targets for the year and said it expected to add around 1 million new customers. ($1 = 0.8778 euros) (Reporting by Douglas Busvine Editing by Maria Sheahan)

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