Europe's largest telecommunications group Deutsche Telekom yesterday revealed a surprise 900 million deutschemark (about HK$3.8 billion) charge against its assets in Asia for last year, as the continuing turmoil in the region hit the group's first quarter performance. The former state-owned company, which was privatised last year, said it had been forced to make a write-down on its assets given the longevity of the region's crisis. 'Developments in Southeast Asia forced us to take another provision against risks,' said Deutsche Telekom chief finance officer Joachim Kroeske, with one large unspecified charge taken to cover its exposure in the region. Mr Kroeske said he did not believe that the turmoil in the region was entering a new prolonged phase. 'We are convinced that what is taking place in Southeast Asia is a phase of consolidation, that the fundamentals are still in order and will lead to further growth,' he said. The revelations came as the group reported that its global telecoms alliance, Atlas/Global One - with France Telecom, and United States giant AT&T - had also marred Deutsche Telekom's performance, and was expected to generate losses of about 390 million marks. Revenues from charges from Asian telecoms companies' using the firm's switching equipment fell as call volumes declined and the firm took depreciation on capital investment into account. The disappointing performance came on the back of an otherwise positive set of results. First quarter sales rose 6.1 per cent to 17.3 billion marks, with net profit up 18 per cent to one billion marks. Deutsche Telekom chief executive Ron Sommer warned the results should not be seen as an accurate indicator of the company's performance for the rest of the year. The company said it had lost about 10,000 customers, or 2 per cent of its customer base, since Germany's telecoms market was deregulated. Last year, the company said sales reached 67.6 billion marks, up 7 per cent, as group net profit rocketed 88 per cent to 3.3 billion marks. Total debts showed a drop by the end of the first quarter to 85 billion marks, from 86.4 billion marks at the end of 1997. The company plans a two billion mark bond issue next month.