We have battled through the headwind caused by the economic environment, special taxes in several countries, and stiff competition, chief executive Rene Obermann said in a statement on Friday.
He echoed France Telecom's
Smaller peer Telecom Italia
For its part, Spanish rival Telefonica
Most European carriers have tried to compensate sluggish growth at home with acquisitions abroad but with limited success.
Deutsche Telekom has not been the boldest of buyers among its peers with the exception of its purchase of U.S. carrier Voicestream over a decade ago.
That business, now known as T-Mobile USA, was a growth engine for some years but has since been sputtering along for several quarters although it is showing signs of stabilization.
Deutsche Telekom said it aims to reach around 19.1 billion euros ($26.34 billion) in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) this year compared with 19.5 billion euros in 2010 and to generate free cash flow of at least 6.5 billion euros.
It also wants to pay a dividend of 0.70 euros per share, lower than 0.78 euros per share in 2009.
Fourth-quarter adjusted EBITDA were 4.5 billion euros, down 10.3 percent, below average analysts estimates of 4.65 billion euros.
Sales dropped 4.5 percent to 15.48 billion euros, in line with expectations.
(Reporting by Nicola Leske)