Changes in the composition of the Group and other transactions

In the 2022 financial year, Deutsche Telekom conducted the following transactions, which had an impact on the composition of the Group. Other changes to the composition of the Group not shown here were of no material significance for Deutsche Telekom’s consolidated financial statements.

Sale of T‑Mobile Netherlands

On September 6, 2021, Deutsche Telekom and Tele2 signed an agreement to sell T‑Mobile Netherlands to WP/AP Telecom Holdings IV, a private equity consortium advised by Apax Partners and Warburg Pincus. The transaction was consummated on March 31, 2022 after obtaining the necessary approvals from the authorities and satisfying the other closing conditions. The sale price is based on an enterprise value of EUR 5.1 billion. The cash proceeds – based on Deutsche Telekom’s overall shareholding of 75 % – amounted to EUR 3.6 billion. The gain on deconsolidation resulting from the sale amounted to EUR 0.9 billion. Until the transaction was closed, the entity had been assigned to the Group Development operating segment. As of December 31, 2021, the assets and liabilities of T‑Mobile Netherlands were classified as held for sale on account of the specific intention to sell them.

Joint venture GlasfaserPlus with IFM

On November 5, 2021, Deutsche Telekom had announced that IFM Global Infrastructure Fund would acquire a stake of 50 % in GlasfaserPlus GmbH, a fiber-optic build-out entity. The sale of a 50 % stake in GlasfaserPlus was consummated on February 28, 2022, after the EU Commission had approved the transaction on January 25, 2022 and the other closing conditions had been satisfied. The sale price was EUR 0.9 billion. The first tranche of the purchase price of EUR 0.4 billion was paid upon completion of the transaction. The remainder will arise in stages upon achieving certain build-out milestones. In this connection, a contingent consideration receivable of EUR 0.5 billion was recognized under other financial assets upon completion of the transaction. The resulting joint venture is to build out an additional 4 million gigabit-capable FTTH lines in rural and development areas by 2028. Following the loss of control as a result of the transaction, the GlasfaserPlus entities were deconsolidated as of February 28, 2022. Until the transaction was closed, the entity had been assigned to the Germany operating segment. The resulting gain on deconsolidation of EUR 1.7 billion is included in other operating income. The portion of the gain on deconsolidation attributable to the shares in the GlasfaserPlus entities remaining at Deutsche Telekom at the date when control was lost, calculated at their fair value, amounted to EUR 0.9 billion. The stakes in the joint venture have been included in the consolidated financial statements in the Germany operating segment using the equity method since February 28, 2022. The carrying amount of the investment amounted to EUR 0.5 billion as of December 31, 2022.

For summarized financial information on the joint venture, as well as a reconciliation to the carrying amount of the investment, please refer to Note 10 “Investments accounted for using the equity method.”

For further information on the carrying amount of the contingent consideration, please refer to Note 42 “Financial instruments and risk management.”

New limited partners admitted to infrastructure fund DIV II

In August and September 2022, Digital Transformation Capital Partners (DTCP Infra) admitted new investors to the investment company Digital Infrastructure Vehicle II SCSp SICAV-RAIF (DIV II). As a result, Deutsche Telekom’s share in DIV II decreased from 66.67 % to 41.25 %. At the same time, an advisory committee has been set up, which will comprise up to ten of the most important investors. By admitting new limited partners, Deutsche Telekom lost control over DIV II. As a result, the entity was deconsolidated on August 2, 2022. Until the transaction was closed, the entity had been assigned to the Group Development operating segment. The resulting gain on deconsolidation of EUR 0.1 billion is included in other operating income. Since then, the stake retained by the Group of 41.25 % has been included in the consolidated financial statements as an associate using the equity method in the Group Development operating segment. The carrying amount of the investment amounted to EUR 0.3 billion as of December 31, 2022. There are plans to admit further investors. In the future, Deutsche Telekom’s stake is expected to fall to around 25 %, in line with the target structure.

For summarized financial information on the associate, as well as a reconciliation to the carrying amount of the investment, please refer to Note 10 “Investments accounted for using the equity method.”

The composition of the Deutsche Telekom Group changed as follows in the 2022 financial year:

The following transactions will change the composition of the Deutsche Telekom Group in the future.

Agreement with DigitalBridge and Brookfield on the Group’s cell tower business in Germany and Austria and recognition of the GD tower companies as a discontinued operation

On July 13, 2022, Deutsche Telekom agreed to sell a 51.0 % stake in the companies comprising its tower assets in Germany and Austria, assigned to the Group Development operating segment (GD tower companies), to DigitalBridge and Brookfield. The preliminary sale price is based on an enterprise value of EUR 17.5 billion. The estimated cash proceeds from the transaction are expected to be EUR 10.7 billion. Since closing of the transaction on February 1, 2023, Deutsche Telekom has lost control over the GD tower companies. All necessary regulatory approvals had been duly granted and all other closing conditions met. Since the transaction was consummated so close to the date of preparing the consolidated financial statements, it is not yet possible to provide any information on the financial impact of the transaction. In future, the stake retained by Deutsche Telekom of 49.0 % will be included in the consolidated financial statements using the equity method. Once the transaction was consummated, Deutsche Telekom leased back most of the sold passive network infrastructure in Germany and Austria under a sale and leaseback arrangement.

As a result of the agreement dated July 13, 2022, the GD tower companies are recognized in the consolidated financial statements as of December 31, 2022 as a discontinued operation. The consolidated income statement has been adjusted accordingly with retrospective effect. Thus the contributions by the GD tower companies are no longer included in the individual items of the consolidated income statement. Instead, profit or loss after taxes is recognized in the item “Profit/loss after taxes from discontinued operation.” Assets and the directly associated liabilities are shown as “held for sale” in the consolidated statement of financial position. In the consolidated statement of cash flows, the contributions by the GD tower companies are each stated in a separate “of which” line item.

Agreement with Cogent to sell the U.S. wireline business

On September 6, 2022, T‑Mobile US reached an agreement with Cogent Infrastructure (Cogent) on the sale of T‑Mobile US’ fiber-optic-based wireline business. Under the agreement, Cogent will take over all shares in the entity that holds all of the assets and liabilities related to the former Sprint’s fiber-optic-based wireline network. The sale price is USD 1 and is subject to customary adjustments laid down in the purchase agreement. In addition, upon completion of the transaction, T‑Mobile US undertakes to enter into a separate agreement on IP transit services, according to which T‑Mobile US will pay a total of USD 700 million to Cogent. The transaction is subject to approval by the authorities as well as other closing conditions. The assets and liabilities of the wireline business have been reported in the consolidated statement of financial position as “held for sale” since September 30, 2022. The transaction is expected to be completed by mid-2023. In connection with the agreement concluded, T‑Mobile US recognized an impairment loss of EUR 0.4 billion in total on the underlying assets in the second half of 2022. Furthermore, liabilities totaling EUR 0.7 billion were recognized in connection with payment obligations entered into as part of the transaction. These liabilities included, under financial liabilities, the present value of the future payments for IP transit services. Since a specific use for these services has not been identified, the corresponding expense has already been recognized in full in the reporting period under other operating expenses.