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.
Similarly, rivals Telefonica
Most European carriers have tried to compensate sluggish growth at home with acquisitions abroad, but with limited success.
Deutsche Telekom's domestic market did not decline in the fourth quarter thanks to sales of smartphones and data plans.
By contrast, its southeast-Europe operations saw a double-digit drop in revenue and core profit due to economic strains in Greece and Romania, and regulatory cuts in other countries.
In the United States, results for its struggling T-Mobile USA -- once the company's growth engine -- looked more stable but net customer additions were disappointing, analysts said, sending its shares down 1.95 percent.
Deutsche Telekom said it aims to reach around 19.1 billion euros ($26.34 billion) in adjusted core profit (EBITDA), slightly lower than 2010, and to generate free cash flow of at least 6.5 billion.
As announced a year ago, the dividend will be 0.70 euros per share compared with 0.78 in 2009.
The news hardly inspired analysts, unlike forecasts from southern rivals Telecom Italia and Telefonica.
Smaller peer Telecom Italia elicited praise from analysts on Friday after vowing to boost liquidity, slash debt and increase dividends over the next three years.
Robin Bienenstock at Bernstein Research called the outlook modest and eminently achievable, and prudent in light of the difficult macro-economic environment in Italy.
We think the company can do better, she said, adding there might be less of a need for infrastructure upgrades next year.
Telecom Italia shares gained 3.9 percent by 0832 GMT, while Telefonica shares were largely flat.
For its part, Spanish rival Telefonica posted worse-than-expected results on Friday as performance in its home market dragged down results.
Telefonica's domestic business has been pummeled by the collapse of Spain's property boom, saddling Spaniards with debt and intensifying competition in telecoms.
However, it said it aimed to achieve a 2 percent increase in revenue this year.
Telecom analyst Javier Borrachero at Kepler Capital Markets said that target was slightly higher than his 1.8 percent estimate. If you can achieve that with Spain likely to remain poor for this year, that is a pretty decent figure.
Belgacom, Belgium's dominant telecom operator, forecast regulatory pressure would hit 2011 by about the same amount as last year, although it should be able to maintain its dividend.
It said that in 2011 core profit would decline by up to 2 percent, due to regulators demanding lower charges for using mobile phones abroad and routing mobile phone calls.
(Additional reporting by Sarah Morris in Madrid, Lisa Jucca in Milan, Robert-Jan Bartunek in Brussels; Editiing by David Hulmes)