Coronavirus pandemic

The coronavirus pandemic has developed into a global economic crisis in 2020 and will continue to shape its course in 2021. Higher demand for certain telecommunications services means the impact of the crisis is being felt less severely by the telecommunications industry than by other industries. Business activities and thus the results of operations and financial position of Deutsche Telekom were impacted by the coronavirus pandemic in various business areas, affecting revenue and earnings, although not to any significant extent. For example, temporary travel restrictions have resulted in lower roaming and visitor revenues. Our terminal equipment business is also beginning to feel the squeeze. Likewise, the impact has been felt in the corporate customer business: together with the development of traditional IT business, which fell short of expectations during the year, the coronavirus crisis resulted in the recognition of an impairment loss on non-current assets in the Systems Solutions operating segment in the third quarter of 2020. On the other hand, Deutsche Telekom recorded an increase in the volume of voice calls, both in mobile communications and in the fixed network. At this time, we can report only very minor repercussions with respect to payment defaults and customer numbers.

The coronavirus pandemic resulted in expenses of EUR 0.4 billion in the financial year, primarily at T‑Mobile US, which were recorded as special factors. These expenses mainly comprise additional salary components for employees, commissions for indirect sales, and cleaning expenses and are recognized under goods and services purchased, personnel costs, and other operating expenses.

Nevertheless, there is still uncertainty regarding the extent to which business activities and thus the results of operations and financial position of Deutsche Telekom could be affected overall depending on how the pandemic develops. Possible future effects on the measurement of individual assets and liabilities are being analyzed on an ongoing basis. Possible factors could include the introduction of new travel restrictions, the closure of Telekom Shops, disrupted supply chains, further declines in roaming and visitor volumes, falling terminal equipment sales, or a drop in the number of new contracts being taken out. In addition, corporate customer business may decline further, for example, due to delayed or changed customer decisions. The possibility of an increase in the number of consumers and business customers defaulting on their payments cannot be ruled out either. Deutsche Telekom has put in place cost-saving measures to mitigate potential effects on earnings.

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.