Deutsche Telekom (NYSE: DT - News) , Europe's largest telecoms group, on Thursday said it would stick to its full-year profit forecast because of growth in its mobile phone business, which it expected to remain insulated from a global economic downturn as more customers turn to mobile internet services.

The German group's second-quarter sales fell 2.9 per cent to €15.1bn as a strong euro and the flight of fixed-line clients took their toll. Adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) fell 1.1 per cent to €4.85 bn.

Both parameters would have stayed at the previous year's levels had the euro not gained in strength in the past 12 months, especially against the US dollar. Net income declined 35 per cent to €394m from €604m in the second quarter 2007.

Deutsche Telekom shares were up 1 per cent at €11.47 by midday.

Currency effects slowed sales growth of DT's 12-nation mobile-phone operations to 0.3 per cent, with sales hitting €8.7bn. But ebitda adjusted for one-off items rose 3.4 per cent to €2.8bn from €2.7bn in the same quarter the previous year.

But sales growth in its eastern European, German and US operations was strong, especially when discounting the effect of currency fluctuations. Its T-Mobile US arm saw euro-denominated performance sag but sales in dollars rose 14.4 per cent to $5.5bn. Earnings hit $1.6bn, a 16.2 per cent gain.

"The performance of T-Mobile US is at the moment not seeing any effects from economic turbulence in the US," chief executive René Obermann said. "The Americans are passing up on travel and eating out rather than on making calls with T-Mobile."

Given the growing popularity of mobile data-services like SMS-messaging and internet all over the world, Mr Obermann added: "I believe [the performance of] mobile telephony … won't be dependent on the [trajectory of the world] economy."

This was one reason why Mr Obermann stuck to his forecast that DT would this year report adjusted ebitda of €19.3bn, the same as the 2007 level.

With customers continuing to abandon traditional phone lines in favour of mobile phones, DT's fixed-line division saw sales fall 6.4 per cent to €5.3bn from €5.7bn. But the unit's profits remained stable at €1.9bn as its broadband business improved.

DT is still recovering from a bruising time in its home market when the number of its fixed-line customers fell sharply in 2006 and 2007. The company's stock price slumped from €15 per share at the end of 2007 to as low as €10 this spring.

At the group's interim press conference on Thursday, Mr Obermann tried to reassure investors by pledging not to issue new shares to fund future acquisitions.

He pointed out that DT was tied up with the integration of Greece's OTE, in which it took a big stake this spring. The group has in the past months shown some interest in SprintNextel of the US but there has been no indication of firm plans for acquisitions in the near term.

Mr Obermann also said it was hard to gauge whether DT's German business had been hit by allegations in spring that former executives spied on non-executive directors and journalists. "But it certainly hurt our image and we're trying hard to restore it."