FRANKFURT, May 5 (Reuters) - Telefonica Deutschland reported a smaller than expected 2-percent rise in first-quarter core profit, as roaming changes partly offset increased data usage by its customers and benefits from the E-Plus acquisition.
The company, controlled by Spain's Telefonica, said first-quarter operating income before depreciation and amortisation (OIBDA), excluding special items, rose to 401 million euros, below the average expectation of 415 million euros in a Reuters poll.
First-quarter sales dropped 4.7 percent to 1.77 billion euros as it felt the impact of European regulation to cap wholesale fees mobile operators charge each other to enable customers to use their mobile phones in other countries, also known as roaming.
Wireless services revenues were down 3.3 percent in the quarter, ending on March 31. Excluding the impact of roaming, regulation mobile services revenues dropped by 0.6 percent, Telefonica Deutschland said.
Germany's largest mobile operator in terms of customers said it still expected core profit to rise by as much as a mid-single digit percentage in 2017.
Telefonica Deutschland bought E-Plus in 2014 for 8.6 billion euros from KPN and expects to get annual synergies of 900 million euros from the deal from 2019. (Reporting by Harro ten Wolde; Editing by Victoria Bryan)