Expectations for the operating segments


The German market for telecommunications services again saw a slight further contraction of 0.4 % in 2020 largely driven by the impact of the coronavirus pandemic. Revenue losses were recorded primarily due to declines in roaming and visitor revenues. The downward trend in revenue is expected to slow to -0.2% in 2021. Ongoing revenue losses due to the pandemic, regulatory effects, and the decline in traditional fixed-network telephony will not be fully offset by still growing demand for mobile data volumes and faster connectivity in the consumer and business customer area. In the German mobile market, revenues are expected to increase by 0.4 % in 2021 (source: EITO).

For the wider ICT market, which covers IT services as well as telecommunications, EITO forecasts growth of 1.6 % for 2021. This plus will primarily result from IT market growth, which, at 2.3 %, will continue to exceed growth in telecommunications revenues in 2021. The already high demand regarding services for business customers (e.g., outsourcing, project business, consulting) and software-based services (virtualization and cloud business, e.g., in the form of software as a service, platform as a service, or infrastructure as a service) has gained further momentum following the rise in internet use prompted by the coronavirus pandemic.

Innovative integrated products and attractive supplementary services – such as TV and streaming options, and smart-home services – are becoming increasingly important for our competitive position with consumers, while cloud services, security applications, and solutions for Industry 4.0 are gaining in significance with business customers. We set ourselves apart from other providers with our broad range of products and services, rate plan innovations like our new convergent offering MagentaEINS Plus, and innovative fixed-network products like our Smart Speaker Mini. We are the first telecommunications company in Germany to have tackled the topic of sustainability head on in the form of our “we care” sustainability label, which we launched to improve the transparency of our products.

The mobile communications market in Germany is currently dominated by three providers, each with its own network infrastructure, who deploy 4G/LTE and 5G technology to ensure that the majority of the population has access to high-speed mobile Internet. At the spectrum auction that concluded on June 12, 2019, Drillisch Netz AG, a subsidiary of United Internet AG, acquired mobile spectrum and has announced its intention to set up a fourth mobile network. This is not a new market player, as United Internet AG is already active on the market as a service provider with around 10 million customers. It will presumably take years to build-up its own mobile network and United Internet has announced it intends to make use of wholesale national roaming services while it does so. United Internet is currently in negotiations with all three network operators regarding these wholesale services.

By contrast, the fixed-network broadband market hosts a large number of players with differing infrastructures – from national through to regional providers. We are assuming that competition from cable network operators will remain intense and that the number of providers who have their own DSL and fiber-optic networks will increase. Competition is also being increased by providers specializing in FTTH infrastructure.

In our Germany operating segment, we continue to work on our comprehensive transformation program and are aiming to secure our market position as the leading integrated telecommunications provider in Germany by means of innovative, competitive offers. We completed the IP migration in Germany at the end of 2020, creating a foundation from which we can effectively implement further technological innovations in the future. We will increasingly reduce the complexity of our products and processes through automation and digitalization initiatives, and ensure greater end-to-end responsibility. Our goal is to deliver the best customer experience with the best service. Hence, we continue to make systematic investments in the brand and shopping experience and are working to realign consumer sales. The aim of our realignment activities, which we started in 2020, is to improve the organizational structure and make the necessary workforce adjustments by the end of 2021. Nevertheless, we remain committed to our nationwide shop infrastructure in Germany, via which we offer personalized advice and one-on-one customer contact. Our network of shops is the largest of all our German competitors. Furthermore, as of January 1, 2021, Deutsche Telekom reassigned the business and profit responsibility for Deutsche Telekom IoT GmbH from the Systems Solutions operating segment to the Business Customers unit in the Germany operating segment. The Group subsidiary established in summer 2020 is responsible for the IoT business of Deutsche Telekom. This reassignment puts us in a position to serve the IoT market more quickly and thus to strengthen Deutsche Telekom’s position on this growth market. The combining of the Business Customers unit’s telecommunications services under one roof in mid-2020 brings us a step closer to our ambition of becoming the preferred partner for digitalization. From now on, small and large business customers as well as multinational corporations will increasingly be served worldwide with an integrated portfolio for telecommunications and IoT services. From fixed network and mobile communications through to IT, we plan to create one-stop integrated solutions professionally and fast that provide our customers with optimum, sustainable support in a digital world.

In the fixed network, we want to offer fiber-optic-based products to more and more customers, creating for them the best customer experience. Our Germany-wide IP-based network achieves high transmission bandwidths of up to one gigabit per second. In order to always offer our customers competitive high-speed lines, we increasingly invest in our fiber-optic network build-out. From 2021, we plan to build out fiber to the home (FTTH) to an average 2 million households per year. Our build-out will benefit both people in towns and cities and those in rural areas. What is more, we are working towards further partnerships to provide even more customers with high-bit-rate internet access – and setting a benchmark for sustainable broadband infrastructure.

In mobile communications, we are keeping our promise to build out the network and are therefore the leader in terms of network coverage, speeds, and customer experience. In total, two thirds of the population of Germany can already use this state-of-the-art mobile technology on the Telekom network. The 5G network is being built out with a combination of two spectrum bands. The 2.1 GHz band, which has wide reach, will provide high mobile bandwidths in rural areas in particular. The 3.6 GHz band offers high-speed 5G in densely populated areas like big cities. The service is already available in 26 German cities.

We want to set ourselves apart from our competitors by offering the best convergent connectivity. In September 2020, we extended our convergent offering with MagentaEINS Plus, thereby setting yet another benchmark – the first fully-integrated offering combining fixed network and mobile communications in one contract with more freedom, more to share, more simplicity, and more flexibility. When designing our products, we pay particular attention to consistently high quality, a simple rate plan structure, and the innovative evolution of our existing service portfolio. With the introduction of our new cloud gaming service, MagentaGaming, we offer customers the opportunity to access a wide-ranging games portfolio without downloads for a small monthly price. We are focusing on enhancing the performance of our rate plans and will orient the latter to the needs of our customers – for example, by expanding all our MagentaMobil rate plans to include StreamOn flat rates and higher data volumes, and by utilizing the 5G mobile communications standard.

In addition, our multi-brand strategy in mobile communications allows us to address the entire customer spectrum – from smart shoppers through to premium customers. We impress our business customers with our Business Mobile rate plans, which already include the new 5G standard and can be expanded with additional options catering exclusively to this target group.

We want to secure an ever larger share of the growing TV market, with a focus on our entertainment and exclusive streaming offers in the Megathek library on MagentaTV, i.e., a wide array of entertainment: from action to drama, from originals and exclusives to top international series and films, as well as the best of the German TV stations ARD and ZDF. In order to give our customers the best possible television experience, we are expanding our offering with streaming services and partners, such as TVNOW, Netflix, Prime Video, Sky, Disney+, DAZN, and Videoload. In this way, MagentaTV combines multiple entertainment worlds in one. To this end, we are investing in our IPTV platform and winning new customers with attractive content, services, and strong partnerships.

We want to remain the market leader in Germany in terms of revenue over the coming years and extend our lead through rising service revenues. We are responding to our customers’ constantly growing demand for bandwidth and continuing to invest extensively in broadband networks, innovative products, and outstanding customer service. In our broadband business, revenues are constantly growing and customer satisfaction levels rising, and we want to continue this growth trend again in 2021. We will improve customer satisfaction by actively evolving our mobile services (e.g., Mein Magenta app) and ensuring seamless service across all channels (e.g., web, hotline, shop).

We expect revenue to grow slightly in our Germany operating segment in 2021 and 2022 alike, despite regulatory effects in our core business and tough competition. Our value drivers are growing mobile and TV revenues (a result of our multi-brand strategy), rising numbers of customers with high-speed lines, and revenue growth with business customers, for example, thanks to the positive trend in IT and cloud business. We want to continue expanding our fiber-optic services, both by means of business models with wholesale products (such as the contingent model) and through further partnerships.

We also anticipate that our growth initiatives in Germany will offset the volume-driven decline in revenue from traditional fixed-network business and that we will continue consolidating our position as market leader in mobile and fixed-network communications. Thanks to our outstanding network quality and the progress we are making with fiber-optic build-out, we expect to see an increase in the next two years in the number of mobile customers as well as growth in our broadband products, fueled by demand for TV and high-speed lines. Our initiatives to digitalize ICT solutions business for our business customers will continue enhancing revenues from IT and cloud services, and from M2M/IoT business. In wholesale business, we expect sales volumes to fall overall, mainly due to the fact that our wholesale customers are migrating their end customers to alternative cable and fiber-optic-based infrastructure. We nevertheless expect demand for our contingent model to be high.

In each of the next two years, we expect to post year-on-year increases in earnings in our Germany operating segment. For 2021, we expect adjusted EBITDA AL to increase to around EUR 9.4 billion, driven in particular by high-value revenue growth and a simultaneous reduction in indirect costs, mainly through digitalization and automation. Our adjusted EBITDA AL is likely to rise further in 2022. We are forecasting a slight improvement in the adjusted EBITDA AL margin through 2022.

Our course is set for innovation and growth: While we will continue to consistently promote investments in new technologies with great intensity in the future, we will wind down legacy systems, cutting costs in the process. Over the coming years, we will focus our investments on building out a forward-looking fixed-network and mobile infrastructure (e.g., FTTH and 5G). Our aim here will be to close gaps in the network in rural areas and provide urban centers with the high bandwidth they require. We want to continue this rollout efficiently and, to this end, are participating in funding programs. We expect our cash capex to remain stable year-on-year in 2021 and to increase year-on-year in 2022.

United States

The global economic slowdown of 2020 was reflected, although not severely, in the overall U.S. ICT market, declining from 2019 by 1.9 %. Growth was down or reversed across nearly all ICT sectors, including IT equipment and services, and total telecommunications infrastructure and services. Only the market value of voice and data services remained stable compared with 2019. Some reversals are forecast for 2021 – with growth expected in total market ICT growth, mobile data services, and telecommunications equipment.

The U.S. mobile market continues to be characterized by competition among the major mobile carriers – now numbering three after the successful merger of Sprint and T‑Mobile US. Overall mobile revenues are expected to increase annually with subscriber growth, data consumption increases, and growth in the device market. Plan rates remain competitive. As anticipated, the MVNO offerings from cable companies Altice, Charter, and Comcast increased in competitive prominence in 2020. Cable outpaced their MNO counterparts through the second quarter of 2020, netting one million adds compared to 882,000. Cable can present an even greater competitive threat if they are able to leverage recently acquired mid-band spectrum; Charter and Comcast both won sizeable amounts of spectrum in the recent 3.5 GHz band auction, as did Cox cable who has yet to deploy a MVNO.

Leading industry associations such as GSMA expect the United States to lead global migration to 5G. The United States’ 5G is expected to accelerate in 2020 and beyond, with providers expanding their capacity and coverage in spectrum bands below 6 GHz. The FCC has also taken an aggressive stance on putting millimeter Wave (mmWave) frequencies in the hands of operators, auctioning off the 24 and 28 GHz bands, and undertaking more mmWave auctions (in the 37, 39, and 47 GHz bands) in late 2019. GSMA expects almost half of all mobile connections to be running on 5G networks by 2025. T‑Mobile US expanded its 5G network leadership, by reaching 280 million people, utilizing the 600 MHz spectrum holdings it acquired in April 2017 and covering over 100 million people with Ultra Capacity 5G by 2020, utilizing the 2.5 GHz spectrum holdings it acquired in the merger with Sprint.

Following the completion of the merger with Sprint, T‑Mobile US hit the grounding running with its initiatives for 2020, carrying great momentum into 2021 even against the backdrop of the coronavirus pandemic. In 2021, T‑Mobile US will continue to focus on creating shareholder value and providing the best value experience in the U.S. wireless industry. Key elements of the company’s focus include consistently and profitably outgrowing the competition, unlocking the value of synergies faster and bigger than anticipated, and making the necessary investments in the near term to position the company for long-term success. T‑Mobile US customer growth initiatives center on attracting and retaining a loyal customer base by offering devices when and how customers want them, and providing plans that are simple, affordable, and without unnecessary restrictions to deliver the best value in wireless. T‑Mobile US continues to keep this winning formula through providing this best value proposition in the market, while providing winning customer service married with its leading 5G network.

T‑Mobile US expects continued increases in postpaid and prepaid customers in 2021 and 2022 with expansion in underpenetrated growth vectors such as small town rural and enterprise to fuel future growth. Military, 55+, family plans, and previous greenfield retail expansion have all helped fuel industry-leading growth over the last few years while allowing T‑Mobile US to deliver great financial returns along with industry-leading subscriber growth. In addition, continued growth of the upper and lower age demographics is expected in the U.S. wireless market. However, competitive pressures and unforeseen changes in the wireless communications industry in the United States may significantly affect the expected ability to attract and retain postpaid and prepaid customers.

T‑Mobile US expects a slight increase in total revenues in U.S. dollars in 2021 and a stable trend for 2022 as postpaid customer growth momentum is partially offset by the continued adoption of lower ARPU customer categories (Military, 55+, and family plans) somewhat pressuring ARPU. Further adoption of 5G devices is anticipated to lead to equipment revenue growth and increases in installment device financing, but partially offset by lower lease revenues, extended device upgrade cycles, and increased rates of customers activating with a previously purchased device.

For 2021, T‑Mobile US expects adjusted EBITDA AL of USD 25.8 billion and an increase in 2022. The development of adjusted EBITDA AL will be affected by the gradual exit from handset leasing in the upcoming years. Sprint had a higher focus on handset leasing, which shall be replaced by an increased focus on equipment installment plans. Revenue growth is expected to outpace increases in expense as T‑Mobile US is focused on customer growth and delivering synergies of the merger with Sprint by driving operating cost efficiencies and site decommissioning as the network is integrated and customers are migrated to the destination network. However, investments to unlock growth vectors such as the growth in digitalization and supporting small town, rural, and enterprise growth, as well as the expectation of increased switching activity from network migrations, will impact adjusted EBITDA AL.

Excluding expenditures relating to spectrum, T‑Mobile US expects an increase in 2021 and stable cash capex growth in 2022 in U.S. dollars as capex remains elevated for the network integration and the rapid pace of deployments to continue building out the 5G network which now covers more than 100 million people with Ultra Capacity 5G.


In 2020, the coronavirus pandemic had a substantial negative impact on economic output in the countries of our Europe operating segment. In 2021, the economy is likely to recover. Real GDP will rise in our segment’s footprint countries by between 3.4 and 4.7 % per annum in 2021. However, a potential increase in unemployment in conjunction with ongoing economic uncertainty could have a negative impact on household and business expenditure for telecommunications services. The (partial) lockdown imposed at the start of 2021 could have a detrimental effect on revenues from business customers, roaming, and prepaid services in particular.

We are assuming that the forecast of these macroeconomic conditions will only have a limited impact on the development of our telecommunications markets (including IT). This assumption has been confirmed by EITO, which anticipates a modest initial recovery for the countries of our Europe operating segment for 2021, with slight growth of 0.4 %. This is based on an improved forecast for IT business, while the telecommunications market is expected to remain at the prior-year level.

Taking the telecommunications market on its own, Analysys Mason also forecasts a stable trend for total revenues for 2021 and an increase of almost 2 % for 2022. Customer demand for a fast and reliable broadband connection is also expected to lead to growth in broadband revenues of around 3 % for the next two years. According to Analysys Mason, the trend towards increased data usage will also continue, especially in households that have not previously had a sufficiently fast broadband line. Demand has also grown as a result of the coronavirus-induced shift towards working from home. On top of this, the fiber-optic build-out is being accelerated. In most Central and Eastern European countries, there is still the possibility of increasing broadband network coverage. Additional regulatory-induced measures will likely further boost investments in network infrastructure. This growth is being bolstered by the growing number of companies offering convergent products. In traditional pay-TV business, according to Analysys Mason, the number of customers using an OTT offer will increase significantly over the next two years, as will the number of IPTV lines. Accordingly, TV revenues for 2021 will also increase by 1 % and for 2022 by more than 2 %. Following the downturn in 2020, mobile business will slowly start to recover again in 2021, according to the Analysys Mason forecast – with modest growth of just under 1 % in 2021 and almost 2 % in 2022.

We aspire to remain Europe’s leading telecommunications provider in the coming years. We are convinced that a country-wide integrated fixed-network and mobile network infrastructure will be a key success factor. Our FMC product portfolio is already available to customers in all of our national companies. Another milestone on the road to success is digitalization: by making intelligent use of our network infrastructure, which comprises a range of technologies, especially 5G, we want to offer innovative solutions for households, business customers, and municipalities. With our fully integrated offers and digitalization, which is fast gaining momentum, we plan to continue to ensure the best customer experience and continue to improve customer satisfaction.

The Europe operating segment is distinguished by its strong investment portfolio: All of our national companies are integrated providers of telecommunications services and, as well as having a high brand recognition value, are substantially relevant in their respective home markets. In the last year, for instance, we were already able to provide our customers in Poland with comprehensive convergent services by utilizing Orange’s fiber-optic network. In the Czech Republic, we are working with a partner to run our own fiber-optic network. In Romania, we will take a different tack and transform the company from an integrated provider into a mobile-only provider: On November 6, 2020, OTE concluded an agreement with Orange Romania concerning the sale of the 54 % stake in Telekom Romania Communications, which operates the Romanian fixed-network business, to Orange Romania. The transaction is subject to approval by the authorities as well as other closing conditions.

Our goal is to deliver the best customer experience. Our successful convergent product portfolios MagentaOne and MagentaOne Business provide strong offerings with which we can help shape developments in the European markets. We made significant progress in the reporting year: we doubled the penetration rate in the last three years, and more than 50 % of our customers already have a MagentaOne contract. We want to increase this share successively over the next two years. Our FMC offering is to provide the best customer experience: With a strong set of add-on services (“more for more” principle), it is our view that MagentaOne is an excellent option for getting the best out of the mobile and fixed-network world. We believe it will lead to higher levels of customer satisfaction and a lower churn rate. Over the next two years, we plan to maximize the business benefits arising from greater customer satisfaction, further lower the churn rate, and increase FMC revenues as a percentage of total revenues.

We are convinced that only top customer service will enable us to take the next step toward achieving the best customer experience. Digitalization can make a major contribution in this regard. The service app for consumers enables us to largely digitalize our interaction with customers, meaning we can meet customer needs in a more personalized and efficient way, and position products and innovative services in the market more quickly. This service app has been established in all of our national companies; in the reporting year, we achieved a penetration rate in the Europe operating segment of 62 %. We firmly believe that our customers will reward the benefits it brings. Thus, we believe we can achieve first or second place in customer satisfaction rankings of telecommunications companies in the respective national companies in the next two years, as measured by the TRI*M index which is based on empirical research.

Our TV business remains key to the success of FMC. In addition to a seamless experience of TV and entertainment offers, we continue to attach importance to high quality and – where it makes sense – exclusive proprietary content. Going forward, we will continue negotiations, depending on local market conditions, to acquire (co-)exclusive rights to broadcast sports events, such as the UEFA Champions League and the Europa League, or the rights to TV movies/series. However, we still believe high-quality local content to be very relevant in our markets. This is why we would like to offer our customers a wide range of such content. By implementing a new TV platform, we can improve the customer experience on the one hand, and rapidly roll out new services and content on the other. We are also working together with what are known as OTT players, like Netflix or Prime Video, and gradually expanding our range of OTT services to all screens – especially to our Android-TV-based terminals. Overall, we expect to continue growing our revenues from TV business over the next two years.

The broadband build-out will remain a key focus of activities in the coming years. Our state-of-the-art network infrastructure supports the digital transformation and enables us to leverage our technology leadership. We therefore plan to take part in further spectrum auctions – particularly for 5G. The 5G launch is advancing in our national companies: after Austria, the marketing of 5G also officially began in Hungary, Poland, the Czech Republic, Slovakia, Croatia, and Greece in 2020. Further countries in our Europe operating segment will gradually follow suit over the next year, depending on their local market needs and on the results of spectrum auctions. To this end, we have completed initial pilot projects in almost all our footprint countries and made the necessary technical preparations. In parallel to the launch of 5G, we continue to expand LTE reach and implement further LTE frequency layers in order to increase network capacity. In this way, we will achieve our target of 99 % network coverage in our European footprint in the next year. One aim of our integrated network strategy is to make further advances in the fiber-optic rollout. In addition to Hungary, Greece, Slovakia, Croatia, North Macedonia, and Montenegro, we are also investing massively in building out our fiber-optic networks in Austria and the Czech Republic. We plan to achieve fiber-optic coverage of 38 % by 2022.

In the next two years, our business customers in the Europe operating segment will have even better options to shape their future in digitalized business life. First of all, we will further tailor our offers to the changed needs of our customers. For example, our MagentaOne Business offers include video conferencing solutions for all business customer groups. Whether small or large, companies can further increase their productivity thanks to our exclusive partnership with Microsoft. In the area of security, we provide solutions, for example, for smart video surveillance for cities and municipalities, but also for private companies of all sizes. For our corporate customer business, we expect this to result in rising revenues from both telecommunications and ICT/cloud services. Our product portfolio continues to center on the efficiency of our business customers: as a strong partner for digitalization, we make it possible to satisfy additional customer needs, for example by optimizing websites or increasing payment options. Connectivity is also more important than ever for business customers. We would like to serve this need with our convergent offers, comprising the best connectivity (5G and optical fiber), efficient productivity, and state-of-the-art security solutions.

In our Europe operating segment, we expect to increase our customer base over the next two years, mainly thanks to a strong focus on MagentaOne, our convergence brand. Consequently, we expect the number of TV and broadband customers to increase in 2021 and 2022. We are also planning for slight growth in the number of mobile customers in 2021, gaining further momentum in 2022. We expect the number of fixed-network lines to remain stable in 2021 and 2022.

We expect revenues for our Europe operating segment to remain stable in 2021 and 2022, measured on a comparable basis, i.e., at constant exchange rates and market conditions, and given an unchanged organizational structure.

Vigorous competition in the markets of our operating segment could potentially put pressure on our margins. To be ready for such an eventuality, we want to increase our productivity and exploit the benefits of digitalization, for instance by automating processes in order to realize cost-cutting potential. Accordingly, we anticipate adjusted EBITDA AL to develop positively. We expected adjusted EBITDA AL to amount to around EUR 3.9 billion in 2021 and to increase slightly in 2022.

In order to maintain our technology leadership, we continue to invest in our integrated networks and plan to maintain our high level of investments over the next few years. Since we invested more than planned in the reporting year, cash capex will decrease slightly year-on-year in 2021. It is expected to level out in 2022.

Systems Solutions

Overall, growth in the IT market is expected to continue apace over the next two years, while cost pressure and intense competition are likely to persist. The impact of the coronavirus pandemic has accelerated digitalization in many areas. As a consequence, we expect further growth in demand for solutions for cloud services, big data, the Internet of Things, the digitalization of business processes, and IT security (cybersecurity).

After a brief decline in 2020, the market for IT services is likely to continue growing over the next few years. At the same time, this market is undergoing a radical transformation, e.g., due to ongoing standardization and automation, demand for smart services, and the changes being wrought by cloud services in outsourcing business. Further challenges have arisen in the shape of digitalization, the growing importance of cybersecurity, big data, and increasing mobility. Traditional IT business will continue to decline, while cloud services, the Internet of Things, mobility, and cybersecurity may achieve double-digit growth rates. In view of all this, our plan is to continue investing increasingly in growth markets – especially in digitalization (e.g., EDGE, artificial intelligence (AI), and blockchain), multi- and hybrid cloud services, and cybersecurity.

Part of our Group strategy is the ambition to be a leading partner for business customer productivity. We give our customers help and guidance in implementing digital business models with our offerings for connectivity, digital business, cloud and infrastructure, and security, as well as through our strategic partnerships.

Under the program to transform our systems solutions business, we realigned our organization and workflows on a portfolio basis, thereby creating the basis for business transparency and dedicated portfolio management and strategy. We are continuing to drive forward expansion of the growth business (e.g., public cloud managed services) while at the same time stabilizing and making further cost savings in established IT business (e.g., managed infrastructure services and private cloud), with the aim of bringing about a significant shift in the revenue mix towards our growth areas.

We are among the top providers in the European IT market. Our very high levels of customer satisfaction are a core element in maintaining this position in the long term as well as in playing a leading role in digitalization.

Overall, we are forecasting a stable trend in order entry and a slight decline in revenues for the Systems Solutions operating segment in 2021. Adjusted EBITDA AL is expected to develop stably and come in at around EUR 0.3 billion. Due to ongoing investments in growth areas, we expect cash capex to remain stable. For 2022, we expect to see a slight year-on-year increase in order entry, stable revenues, a slight increase in adjusted EBITDA AL, and stable cash capex.

Group Development

Our companies T‑Mobile Netherlands and GD Towers dominate the performance of our Group Development operating segment.

While the Dutch mobile communications market continues to be shaped by sustained high price pressure and intense competition, this is expected to ease moderately in the coming years. The Netherlands is ahead of much of Europe with its bundling of fixed-network and mobile products into convergent offers (FMC). Nevertheless, the strong discount segment comprising mobile providers’ secondary brands will continue to make for lively competition. The main components of our strategy for T‑Mobile Netherlands continue to be the repositioning of the T‑Mobile core brand, expansion of our portfolio of convergent products, and efficient cost management. Following the successful integration of Tele2 Netherlands, the Dutch MVNO and SIM provider Simpel was acquired to support our long-term strategy. The acquisition of Simpel secures our mobile market shares, creates synergies, and makes us more competitive in the consumer market.

GD Towers comprises the equity investments DFMG, T‑Mobile Infra B.V., and, since the start of 2021, Magenta Telekom Infra GmbH. With some 32,500 sites, DFMG is the biggest provider of passive wireless infrastructure for mobile communications and broadcasting in Germany. We expect demand for cell sites to rise steadily over the next few years, given that network operators plan both to close gaps in coverage and to increase the density of mobile networks to meet the growing demand for mobile data services. With around 3,150 sites, T‑Mobile Infra B.V. is one of three providers of passive wireless infrastructure in the Netherlands. On January 21, 2021, Deutsche Telekom, Cellnex Telecom S.A., the newly established, independently managed investment company Digital Infrastructure Vehicle I SCSp (DIV), and others signed an agreement to merge Deutsche Telekom’s and Cellnex’s respective Dutch subsidiaries for mobile infrastructure. Under the deal, the Dutch cell tower company T‑Mobile Infra B.V. will be sold to DIV and subsequently merged into Cellnex Netherlands B.V. Magenta Telekom Infra GmbH bundles the Austrian radio tower business, operating around 7,000 sites.

We expect the revenues of our Group Development operating segment to increase slightly in 2021, as well as in 2022. Adjusted EBITDA AL is set to increase in 2021 to around EUR 1.2 billion; for 2022 we expect a further increase. The positive trend in revenue and adjusted EBITDA AL is mainly driven by the continued build-out of sites at DFMG and the FMC strategy with planned customer additions at T‑Mobile Netherlands.

We expect investments in our Group Development operating segment to continue growing strongly in 2021, with a further increase projected for 2022. This is mainly on account of the ongoing build-out of cell sites by DFMG in Germany together with a slight decrease in investment activity at T‑Mobile Netherlands due to the advanced stage of the integration of Tele2 Netherlands.

Group Headquarters & Group Services

At Group Headquarters & Group Services, we will stay focused over the next two years on our ongoing efficiency enhancement measures, with which we are further optimizing our structures, especially within Group Services. We will also continue to focus on implementing our cost-cutting measures. This will primarily involve reallocating human resources, bundling standardized processes for the Group, and enhancing the value of our real estate portfolio by means of innovative space and workplace concepts. As these cost cuts will put us in a position to offer our services more cost-effectively, the operating segments stand to benefit from them as well. Against the backdrop of the pandemic, we are working on flexible concepts that will enable us to adjust our capacities at short notice to take account of current developments.

In the coming years, too, our Board of Management department Technology and Innovation will drive not only the development of innovative technologies, products, and services, but also IT standardization and the ongoing establishment of centralized production platforms. Major areas of capital expenditure in the years 2021 and 2022 will include technology development, the implementation of our IT strategy, and security. We expect this to reduce overheads and capital expenditure, driven by IT operating costs and by the ongoing standardization of IT infrastructure and platforms.

In the long term, these savings will help the Group finance its innovation endeavors. We are focusing innovation topics, such as development of the new 5G mobile communications standard and network slicing, evolution of a proprietary smart system for the voice control of Deutsche Telekom products and services, and introduction of a uniform operating system for the routers marketed by the Group. Technological innovations will serve to safeguard the network and technology leadership of our Germany and Europe operating segments in the long term and to evolve the campus networks, which are designed to improve the integrated automation of our international industrial customers’ production processes. Ultimately, every one of our investment projects revolves around enhancing the customer experience.

Refers to the fourth-generation mobile communications standard that supports higher transmission rates (see LTE).
New communications standard (launched from 2020), which offers data rates in the gigabit range, converges fixed-network and mobile communications, and supports the Internet of Things.
A telecommunications network operator.
Contingent model
Contract concluded over a long period of time with defined advance payment and minimum purchase requirement. In return, the resellers pay a reduced monthly charge for VDSL. This allows them to put together interesting offers for their own consumers without having to invest in fiber-optic lines of their own. This improves the utilization of Telekom Deutschland GmbH’s existing VDSL network. The current “contingent model” is being developed further to reflect the network build-out in terms of availability and bandwidth.
Protection against internet crime.
FMC – Fixed-Mobile Convergence
The merging of fixed-network and mobile rate plans for customers that have both fixed-network and mobile contracts with Deutsche Telekom.
FTTH – Fiber To The Home
In telecommunications FTTH means that the fiber-optic cable is terminated right in the user’s home or apartment.
Fixed-network lines
Lines in operation excluding internal use and public telecommunications, including IP-based lines. The totals reported in the combined management report were calculated on the basis of precise figures and rounded to millions or thousands. Percentages were calculated on the basis of the figures shown.
ICT – Information and Communication Technology
Information and Communication Technology
IP – Internet Protocol
Non-proprietary transport protocol in Layer 3 of the OSI reference model for inter-network communications.
IPTV – Internet Protocol Television
Refers to the digital transfer of television programs and films over a digital data network using the Internet Protocol (IP).
IoT – Internet of Things
The IoT enables the intelligent networking of things like sensors, devices, machines, vehicles, etc., with the aim of automating applications and decision-making processes. Deutsche Telekom’s IoT portfolio ranges from SIM cards and flexible data rate plans to IoT platforms in the cloud and complete solutions from a single source.
LTE – Long-Term Evolution
4G mobile communications technology that uses, for example, wireless spectrum on the 800 MHz band freed up by the digitalization of television. Powerful TV frequencies enable large areas to be covered with far fewer radio masts. LTE supports speeds of over 100 Mbit/s downstream and 50 Mbit/s upstream.
M2M – Machine to Machine
Communication between machines. The information is automatically sent to the recipient. For example, in an emergency, alarm systems automatically send a signal to security or the police.
MVNO – Mobile Virtual Network Operator
Company that offers mobile minutes at relatively low prices without subsidized handsets. A mobile virtual network operator does not have its own wireless network, but uses the infrastructure of another mobile operator to provide its services.
Mobile customers
In the combined management report, one mobile communications card corresponds to one customer. The totals were calculated on the basis of precise figures and rounded to millions or thousands. Percentages were calculated on the basis of the figures shown (see also SIM card).
Optical fiber
Channel for optical data transmission.
Customers who pay for communication services after receiving them (usually on a monthly basis).
In contrast to postpaid contracts, prepaid communication services are services for which credit has been purchased in advance with no fixed-term contractual obligations.
The sale of goods and services to end users, as opposed to resale or wholesale.
Refers to the use of a communication device or just a subscriber identity in a visited network rather than one’s home network. This requires the operators of both networks to have reached a roaming agreement and switched the necessary signaling and data connections between their networks. Roaming comes into play, for example, when cell phones and smartphones are used across national boundaries.
A coupling element that connects two or more sub-networks. Routers can also extend the boundaries of a network, monitor data traffic, and block any faulty data packets.
SIM card – Subscriber Identification Module card
Chip card that is inserted into a cell phone to identify it in the mobile network. Deutsche Telekom counts its customers by the number of SIM cards activated and not churned. Customer totals also include the SIM cards with which machines can communicate automatically with one another (M2M cards). The churn rate is determined and reported based on the local markets of the respective countries.
Service revenues
Revenues generated with mobile customers from services (i.e., revenues from voice services – incoming and outgoing calls – and data services), plus roaming revenues, monthly charges, and visitor revenues.
Refers to the business of selling services to third parties who sell them to their own retail customers either directly or after further processing.