Deutsche Telekom AG - The 2009 financial year

Europe: Joint venture agreed in the United Kingdom. In our European mobile markets we also had a difficult start to the year. During the course of the year however, we have increased the number of contract customers, thus compensating the decline in the prepaid segment. For the particularly competitive market in the United Kingdom, we agreed with France Télécom in November 2009 on a joint venture to include our subsidiaries T-Mobile UK and Orange UK. The two partners will each own 50 percent of the new company which will be the market leader once the transaction is completed, allowing for better use of economies of scale. Southern and Eastern Europe: Retaining customers through integrated services. With the Greek company OTE and its subsidiaries, Deutsche Telekom significantly strengthened its position in Southern and Eastern Europe. We now serve some 50 million mobile, fixed-network and broadband customers in these markets, generating revenues of almost EUR 10 billion. In 2009, the difficult economic environment took its toll, marked as it was by decreasing levels of gross domestic product and increasing taxes in several countries as well as strong fluctuations in exchange rates. Nevertheless, the region offers good opportunities. We want to engender greater customer loyalty in the future, for instance by bundling telecommunications services and television products. Our investment in a high-performance broadband infrastructure is already paying off. The number of IPTV customers in Southern and Eastern Europe doubled to more than 400,000 in 2009. Systems Solutions: Major contracts affirm our course. T-Systems’ focus on the systems solutions business with corporate customers has proven to be a success. The segment is back in the black, thanks to a successful cost-cutting and efficiency program. T-Systems won a whole string of important major contracts in 2009 – in Germany, for example, with MAN and Linde AG. International business also performed well. In the future, T-Systems will provide telecommunications services worldwide for the energy group BP and also operate the data centers of the electronics group Philips. Moreover, T-Systems is taking over SAP’s hosting business in Europe and will provide software application support for almost 90 SAP customers in its data centers. And the acquisition of Arivia will make T-Systems the largest provider of SAP services in South Africa. In the future, T-Systems will further expand its strengths as a provider of network-based ICT solutions – combined IT and telecommunications services – and above all, will offer new solutions for customers in the energy, healthcare, media and automotive sectors. 26