Deutsche Telekom AG - The 2009 financial year

Customer additions in mobile communications and broadband growth in fixed-network communications. The first-time full consolidation of OTE in the Southern and Eastern Europe operating segment strengthened Deutsche Telekom’s position in the region. Significant growth in customer numbers was recorded in the broad- band and mobile communication business. The global economic crisis, which caused gross domestic product (GDP) declines and major currency fluctuations, created a challenging economic environment that exerted enormous pressure. In Hungary, for example, the further integration of fixed-network, broadband and mobile communications plus satellite TV helped the Deutsche Telekom Group to play a leading role in gaining “access to all the customers’ screens” and to boost innovation in the Hungarian market. Other markets in the Southern and Eastern Europe operating segment also have been prepared for integration. The bundling of telecommunications services with entertainment/TV ser- vices boosts the benefit to the customer, thus reducing churn and creating an environment that will ultimately contribute to Deutsche Telekom’s con- nected life and work strategy. The investments in high-performance broadband infrastructures created the foundation, for example, for doubling the number of IPTV customers to more than 400,000 lines. New forward-looking projects for corporate customers. The Systems Solutions operating segment has identified five key issues – core beliefs – on the basis of which it intends to face the challenges of the ever-increasing competition in the information and communication tech- nology (ICT) market: Dynamic Net-Centric Sourcing, Collaboration, Mobile Enterprise, Security & Governance, and Sustainability & Corporate Respon- sibility. T-Systems has aligned its portfolio and services with these five issues, paving the way for the networked future of business and society. The focus on corporate customers’ systems business translated into a number of large-scale orders in and outside Germany in the reporting year, with MAN (commercial vehicle, engine and mechanical engineering) and Linde AG (gas and engineering) both signing up to purchase key ICT services from T-Systems for seven years. In Germany, T-Systems manages the network connecting the branches of the REWE Group, including its tourism arm with 900 DER and Atlas travel agencies. T-Systems is imple- menting one of its largest-ever SAP projects for automotive supplier Conti- nental, consolidating and operating its entire SAP landscape. T-Systems also secured large orders from the public sector: In Baden-Württemberg, for example, it will install computers and printers at several government departments and associated public authorities. In North Rhine-Westphalia, T-Systems is introducing a new budgeting and accounting system for the regional administration. International business was also boosted by a number of major deals abroad. In the future, T-Systems will provide all telecommunications services for the global energy group BP. Under the five-year contract, T-Systems and its partner Siemens Enterprise Communications will migrate BP’s international network to next-generation voice and data communications. T-Systems has been contracted to provide worldwide computing center and SAP services for Royal Philips Electronics. In South Africa, T-Systems is respon- sible for all information and communications technology of Eskom, a power utility, and Transnet, a transportation company. T-Systems will also take over SAP’s hosting customers in Europe and will support the software applications of almost 90 SAP customers in its computing centers. T-Systems is acquiring a strong footprint in the growing healthcare market. Through T-Venture, Deutsche Telekom’s venture capital company, T-Systems has acquired a stake in Portavita, the Netherlands’ leading provider of solu- tions for the IT-based integrated care of chronically ill patients. Through T-Venture, T-Systems is also taking over shares in the Dutch software devel- oper MGRID, a Portavita partner specializing in developing hardware and software for medical database applications. Together, the companies intend to tailor the tried and tested solutions from the Netherlands to the German and other European markets. 55Group management report