Deutsche Telekom AG - The 2009 financial year

this target had already been exceeded at EUR 5.9 billion on a cumulative basis. Savings of EUR 1.8 billion were made in the 2009 financial year alone, mainly in the Germany and Systems Solutions operating segments, of which EUR 0.4 billion was reinvested. Deutsche Telekom will usher in the next phase of Save for Service in early 2010 and bring its international activities into the program’s scope, too. Operational strength. To enhance customer satisfaction, quality and effi- ciency, in 2006 Deutsche Telekom began applying the methods of Six Sigma and Lean Management/Office Lean. Several hundred improvement projects have since been carried out, with many business processes optimized long- term across business units, and additional revenue and cost cutting in the high triple-digit millions realized. Grow abroad. The proportion of net revenue generated abroad has grown rapidly over the last few years. While Deutsche Telekom’s home market, Germany, generated 46.8 percent of net revenue in 2008, the figure had decreased to 43.4 percent one year later. The main contributing factor is the first-time consolidation of the Greek company Hellenic Telecommunications Organi- zation S.A., Athens, Greece (OTE) and its mobile subsidiary COSMOTE S.A. (Cosmote). Deutsche Telekom intends to continue to leverage international economies of scale and synergies in the future and grow further. A higher stake in OTE, other minor acquisitions in footprint markets, joint ventures, and the focused expansion of its broadband infrastructure form part of Deutsche Telekom’s ongoing international growth strategy. Increased stake in OTE and leveraged synergies. In 2009, Deutsche Telekom acquired an additional 5 percent in the Greek company OTE, bringing its shareholding up to around 30 percent. During the 2009 financial year, the two companies concentrated on leveraging synergies in various areas including procurement, where contracts were renegotiated and lower prices agreed, and innovative devices and services. Acquisition of Zapp in Romania. The Cosmote group had finalized its acquisition of Zapp in Romania. The takeover will enable the company to offer new mobile broadband services with the 3G license it acquired in the process, enlarge its customer base, and maintain its footprint in the business customer market. Merger in the United Kingdom. Deutsche Telekom AG and France Télécom S.A. have signed an agreement to merge their British companies, T-Mobile UK and Orange UK, in a 50:50 joint venture. The authorities are expected to approve the transaction in the course of the 2010 financial year. The joint venture will be the leading mobile operator in the UK market. Network expansion in the United States. In 2009, Deutsche Telekom continued to invest in the expansion of its mobile communications network in the United States and doubled its 3G network coverage. By the end of the year, the new data network covered 205 million U.S. citizens. The rapid upgrade of the mobile network is set to continue in 2010 and coverage with HSPA+ and other technologies will be further improved. Mobilize the Internet. Deutsche Telekom is continuing to lead the way in connected life and work on the move. Thanks to state-of-the-art terminal devices and innovative applications, mobile internet access, e-mails, communication, and photo and video sharing is now easier than ever before. Deutsche Telekom is very well positioned in this field and will continue to benefit strongly from future growth in mobile Internet usage. Expansion of the handset portfolio. Deutsche Telekom launched numer- ous innovative handsets in 2009, including the T-Mobile G1, the world’s first Android-based smartphone, and Apple’s latest iPhone 3GS. These were followed by other exclusive devices such as T-Mobile G2 Touch, the T-Mobile Pulse, and RIM’s BlackBerry BoldTM 9700. T-Mobile also intro- duced the first Windows-based cell phones, the HTC Touch2 and the HTC HD2, which use the new operating system Microsoft Windows Mobile 6.5 Professional. Innovative applications. In 2009, Deutsche Telekom also rolled out a large number of innovative applications for mobile Internet usage. MyCommunity is one such service, which allows mobile customers to see their contacts immediately on their device’s home screen and contact them even faster via an intuitive user interface. Via the Media Center, Deutsche Telekom’s customers can access their personal content anytime and anywhere – be it digital photos, videos, music, or constantly updated contacts and e-mails. International roll-out. Besides new equipment the Group has also intro- duced a range of new and innovative services such as Music Zone, which was launched in Greece and will bring T-Mobile’s music services also to Cosmote customers. This music project is the first in a series of international packages of Deutsche Telekom products services that are set to be launched on the Greek market. Mobile TV. Deutsche Telekom added further channels to its MobileTV service and improved image and sound quality. The service is now also available on most UMTS-enabled handsets, such as the Apple iPhone 3G and 3GS, the T-Mobile G1, and the T-Mobile G2 Touch. In 2009, Deutsche Telekom began to exclusively broadcast all first- and second-division Bundesliga soccer matches live to cell phones with LIGA total! 63Group management report Group strategy and Group management