Group Development

For further information on changes resulting from the first-time application of the IFRS 16 “Leases” accounting standard and changes in the organizational structure, please refer to the sections “Management of the Group” and “Group organization.”

Since the spin-off from T‑Mobile Netherlands on January 1, 2019, the cell tower business of T‑Mobile Netherlands has been reported under GD Towers, the new unit set up in the Group Development operating segment. This unit comprises DFMG and the cell tower business of T‑Mobile Netherlands. Prior-year comparatives were not adjusted.

Customer development

The number of mobile customers and fixed-network lines in the Netherlands increased significantly compared with the end of 2018 due to the customer base acquired in connection with Tele2 Netherlands. There was also clear customer growth in the operating business. Despite intense competition, we won a high number of new customers in mobile business in particular thanks to our rate plans, which offer large inclusive data volumes through to unlimited data. The number of customers in the fixed-network consumer portfolio also continued to grow.

Development of operations

Total revenue

Total revenue in our Group Development operating segment increased in 2019 by 28.0 percent year-on-year to EUR 2.8 billion, primarily due to the inclusion of Tele2 Netherlands since the start of 2019. Both business customer and consumer operations contributed to this revenue growth, on the back of customer growth and a positive trend in business with MVNOs in the Netherlands. The GD Towers unit also recorded a year-on-year increase in revenue, driven by volume-based growth at DFMG.

EBITDA AL, adjusted EBITDA AL

EBITDA AL increased year-on-year from EUR 0.9 billion to EUR 1.1 billion. In August 2019, we transferred our stake of around 11 percent in Ströer SE & Co. KGaA to the Group’s own trust, Deutsche Telekom Trust e.V., to use as plan assets to cover pension obligations. The resulting income of around EUR 0.1 billion was recorded as a special factor. The revenue-increasing effects and the inclusion of Tele2 Netherlands also contributed to the increase in EBITDA AL. Adjusted EBITDA AL increased from EUR 0.9 billion to EUR 1.0 billion due to the effects described. Initial synergy effects, measures to improve cost management efficiency, and rising customer numbers and revenues from business operations also contributed to the EBITDA AL growth. The GD Towers business continues to post consistent growth on the back of rising volumes.

EBIT

EBIT increased by 9.8 percent year-on-year to EUR 0.6 billion as a result of the effects described under adjusted EBITDA AL. An increase in depreciation, amortization and impairment losses in connection with the consolidation of Tele2 Netherlands at T‑Mobile Netherlands as well as non-recurring effects in the course of the integration had a negative effect. GD Towers’ high investments in new cell sites also increased depreciation, amortization and impairment losses. Whereas previously expenses had been recognized in connection with operating leases, the right-of-use assets recognized in this context since the application of accounting standard IFRS 16 as of January 1, 2019 result in particular in higher depreciation charges.

Cash capex

Cash capex increased year-on-year by EUR 0.2 billion to EUR 0.5 billion, due mainly to the additional investments required to integrate Tele2 Netherlands and higher capital expenditure at DFMG in connection with building out mobile infrastructure in Germany.