Deutsche Telekom AG - The 2009 financial year

The introduction of the latest version of the web’n’walk mobile Internet service platform underscores T-Mobile Deutschland’s leading position in the mobile Internet. Users in Germany can, for instance, access their favorite personalized services with a single click using widgets, small Web applications on the handset’s home screen. In the course of the financial year, T-Mobile Deutschland again strength- ened its reputation as a pioneer in the M2M business (machine-to-machine communication), for example in the field of smart metering technology, which allows residential meter readings such as electricity and gas to be recorded digitally, helping utility companies to design more efficient energy packages for their customers and to improve utility delivery. On the basis of strategic partnerships, T-Mobile Deutschland offers additional elements of the value chain from a single source from hardware and mobile com- munications through to solution enabling. 3G network expansion in the United States. In the United States operating segment (T-Mobile USA) the number of cus- tomers at the end of 2009 increased to 33.8 million with a total of 1.0 million net new customers added in the year. T-Mobile USA ended the year with a nationwide 3G network covering over 205 million people, almost doubling T-Mobile USA’s 3G network coverage in 2009. T-Mobile USA also upgraded its national 3G network during the year from 3.6 Mbit/s to 7.2 Mbit/s. In 2010, T-Mobile USA intends to further expand and upgrade the 3G mobile communications network, including an upgrade of the top 30 U.S. markets to HSPA+ with a top download speed of 21 Mbit/s. With the expanded and upgraded 3G network, customers have increased their adoption of 3G-enabled converged devices driving data revenue growth. In 2009, T-Mobile USA delivered an innovative handset line-up which now includes eleven 3G-enabled converged devices. Following the success of the 2008 launch of the T-Mobile G1TM, T-Mobile USA launched the T-Mobile MyTouch TM 3G, and ended the year with a market-leading four Android TM devices in its handset lineup. During the year, T-Mobile USA delivered market-leading value in wireless with its launch of Even More rate plans. Some of these plans feature unlim- ited nationwide voice, text and data services, and include rate plans with and without subsidized handsets. Additionally, in 2009 T-Mobile USA con- tinued to expand its retail distribution network, including a sales agreement with the American electronics retail store chain RadioShack which expanded the number of locations carrying T-Mobile USA products and services by almost a third and regained its leadership in customer service as demon- strated by independent consumer ratings. Encouraging development in the contract customer business. In the Europe operating segment, the structure and, in turn, the quality of the customer base continuously improved in the course of the 2009 financial year. At the end of the reporting year, the segment served 44.2 million cus- tomers, the same level as in the prior year. The contract customer base rose against the previous year in both absolute and relative terms, compen- sating for the lower customer figures in the prepaid business. This success is partly attributable to intense marketing efforts to acquire and retain customers. Moreover, improvements in the product portfolio attracted new groups of customers. New mobile Internet applications and attractive smartphones contributed to this success. Most contract customer growth came from the countries with successful Apple iPhone, T-Mobile G1 and T-Mobile G2 Touch sales. In addition to the products offered, strategic partnerships with multina- tional corporations safeguarded Deutsche Telekom’s status as the leading provider for connected life and work. In November 2009, Deutsche Telekom AG and France Télécom S.A. agreed to merge their British companies, T-Mobile UK and Orange UK, in a 50:50 joint venture. According to competitors’ figures published in the third quarter of 2009, once the transaction has been completed the joint venture will have a total customer market base of around 32.7 million customers (including Virgin Mobile), which would make it the leading mobile carrier in the United Kingdom. 54