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Hungary's Magyar Telekom sees profits drop

Hungary's top telecommunications firm Magyar Telekom on Thursday said that net income in the Q1 of 2007 was Ft 15.9 billion ($87.16 million), 16.1% down on last year's figure.

However, revenues grew by 6.1% to Ft 161.1 billion and earnings before interest, taxes, depreciation and amortization fell by only 1.7% to Ft 63 billion. The phone company is battling lower revenue from its fixed-line business and eroding profitability on mobile phones because of competition from operators like Vodafone Group Plc. The company blamed higher taxation brought in by a government austerity package for the drop in the net income, but said that overall performance was solid. Magyar Telekom Nyrt. Hungary's former phone monopoly now controlled by Deutsche Telekom AG. (