Deutsche Telekom AG - The 2009 financial year

Deutsche Telekom acquired the Spanish IT service provider Metrolico S.A. on May 28, 2009. It is fully consolidated in the Systems Solutions operating segment. The integration of Metrolico (with revenue of approximately EUR 54 million in 2008) has boosted T-Systems’ presence in Southwestern Europe. OTE acquired the Romanian mobile communications provider Telemobil S.A. (Zapp) effective July 8, 2009 (2008: approx. EUR 61 million in revenue). On November 5, 2009, Deutsche Telekom AG and France Télécom S.A. signed the agreement for the merger of their British companies, T-Mobile UK and Orange UK, in a 50 : 50 joint venture. The transaction is subject to approval by the responsible authorities. T-Mobile UK in the Europe operat- ing segment is now classified as held for sale in the consolidated state- ment of financial position. On November 19, 2009, Deutsche Telekom signed an agreement with Free- net AG to take over 100 percent of the shares in the Web hosting provider Strato AG and Strato Rechenzentrum AG. The transaction will make Deutsche Telekom a leading provider of Web hosting products, especially for consumers and small business customers in the German market. The companies’ supervisory boards already approved the planned transaction. The extraordinary shareholders’ meeting on November 19, 2009 approved the spin-off and takeover agreement under which Deutsche Telekom AG transferred the T-Home business area to T-Mobile Deutschland GmbH by way of a spin-off with accounting effect as of January 1, 2010. Fixed-network and mobile communications business will be bundled in the future com- pany for Germany to increase competitiveness. Management and supervision. The management and supervisory structures, as well as the compensation system for the Board of Management and the Supervisory Board, are aligned toward the long-term performance of the Group and follow the recommendations of the German Corporate Governance Code. Board of Management responsibilities are distributed across eight Board departments. In addition to the five central management areas assigned to the Chairman of the Board of Management, the Board member responsible for Finance, the Board member responsible for Human Resources, the Board member responsible for Data Privacy, Legal Affairs and Compliance, and the Chief Operating Officer (COO), who is also responsible for the Europe operating segment, there are three more segment-based Board of Management departments: Germany, Southern and Eastern Europe, and T-Systems (Systems Solutions operating segment). Changes in the composition of the Board of Management. In agreement with the Supervisory Board, Dr. Karl-Gerhard Eick resigned from the Board of Management with effect from midnight on February 28, 2009. At the Supervisory Board meeting on February 26, 2009, the Supervisory Board appointed Timotheus Höttges as the new member of the Board of Management for Finance effective March 1, 2009 and Niek Jan van Damme as the new member of the Board of Management for T-Home and Sales & Service, also effective March 1, 2009. The establishment of a new Board of Management department for Southern and Eastern Europe with effect from March 1, 2009 was also approved at the meeting on February 26, 2009 to account for the growing significance of the Southern and Eastern European region and to combine responsibility for the existing, integrated operations in the region following the takeover of management control of the Greek company OTE. The new department is headed by Guido Kerkhoff, who was appointed to the Group Board of Management effective March 1, 2009. On April 29, 2009, the Supervisory Board decided to merge responsibility for standard fixed-network and mobile communica- tions business for consumers and business customers in Germany into a single Board of Management department – Germany – effective July 1, 2009. This department is headed by Niek Jan van Damme. Reinhard Clemens retains responsibility for the ICT solution business with corporate customers – T-Systems. In addition, the position of Chief Operating Officer was established effective July 1, 2009. The new department, headed by Hamid Akhavan, brings together the Group-wide responsibility for technology, IT, procurement, products and innovations for standard business for consumers and busi- ness customers. Hamid Akhavan is also responsible for the Group’s mobile communications subsidiaries in the United Kingdom, the Netherlands, Austria, the Czech Republic and Poland. The Deutsche Telekom Supervisory Board agreed to Hamid Akhavan’s request to resign on February 15, 2010 at its meeting on December 17, 2009. On January 29, 2010, the Supervisory Board approved the proposal by the Board of Management to reassign Hamid Akhavan’s responsibilities on a temporary basis. Board of Management members Guido Kerkhoff and Reinhard Clemens will assume Hamid Akhavan’s responsibilities in an acting capacity. Effective February 15, 2010, Guido Kerkhoff will assume temporary responsibility for the Europe region (United Kingdom, Netherlands, Austria, Poland and Czech Republic) and International Sales & Service. Reinhard Clemens will, also in an acting capacity, assume Group-wide responsibility for the remaining COO units, such as Products & Innovation, Technology, IT and Procurement effective the same date. The Supervisory Board of Deutsche Telekom oversees the management of business by the Board of Management and advises the Board. The Supervisory Board is composed of 20 members, of whom 10 represent the shareholders and the other 10 the employees. 59Group management report Group organization