Highlights in the 2022 financial year

For further information on these and other events, please refer to our media information.

Developments at senior management level

The shareholders’ meeting held on April 7, 2022 elected Dr. Frank Appel as a member of Deutsche Telekom AG’s Supervisory Board. The Supervisory Board then elected Dr. Appel as the new Chairman of the Supervisory Board, as successor to Prof. Ulrich Lehner, who left the Supervisory Board with effect from the end of the shareholders’ meeting.

For further information, please refer to our media report.

On December 15, 2021, the Supervisory Board of Deutsche Telekom AG resolved to reappoint Timotheus Höttges as Chairman of the Board of Management for the period from January 1, 2022 through December 31, 2026.

Business and other transactions

Agreement with DigitalBridge and Brookfield on GD Towers. On July 13, 2022, Deutsche Telekom agreed to sell a 51.0 % stake in GD Towers, comprising its tower assets in Germany and Austria, assigned to the Group Development operating segment, to DigitalBridge and Brookfield. Deutsche Telekom will retain a 49.0 % stake, benefiting from future value upside at GD Towers. The transaction was consummated on February 1, 2023. All necessary regulatory approvals had been duly granted and all other closing conditions met.

New limited partners admitted to infrastructure fund DIV II. In August and September 2022, Digital Transformation Capital Partners admitted new investors to the investment company Digital Infrastructure Vehicle II (DIV II). As a result, Deutsche Telekom’s share in DIV II decreased from 66.67 % to 41.25 % and the entity was deconsolidated in the third quarter of 2022.

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 the fiber-optic-based wireline business of the former Sprint. The transaction is subject to approval by the authorities as well as other closing conditions. The transaction is expected to be completed by mid-2023.

Share buy-back program at T‑Mobile US. On September 8, 2022, T‑Mobile US announced that its Board of Directors has authorized a share buy-back program for up to USD 14.0 billion of the company’s common stock through September 30, 2023. Repurchases are expected to be made from available cash on hand and proceeds of one or more debt issuances or other borrowings, based on the company’s evaluation of market conditions and other factors. By December 31, 2022, T‑Mobile US had bought back approximately 21.4 million own shares with a total volume of USD 3.0 billion (EUR 3.0 billion) under this program. On September 15, 2022, T‑Mobile US issued senior notes with a total volume of USD 3.0 billion (EUR 3.0 billion) and intends to use the cash proceeds for general business purposes, which may include, among other things, the financing of the share buy-back program and the early repayment of higher-interest bonds.

Increase of the stake in T‑Mobile US. On April 12, 2022, Deutsche Telekom exercised a further portion of its stock options to acquire a total of around 21.2 million shares in T‑Mobile US from SoftBank for a purchase price of USD 2.4 billion (EUR 2.2 billion). Upon its completion, the transaction increased Deutsche Telekom’s stake in T‑Mobile US by 1.7 percentage points.

Sale of T‑Mobile Netherlands. On September 6, 2021, Deutsche Telekom and Tele2 signed an agreement with WP/AP Telecom Holdings IV on the sale of our subsidiary T‑Mobile Netherlands. The transaction was consummated on March 31, 2022. The sale price is based on an enterprise value of EUR 5.1 billion. The cash proceeds amounted to EUR 3.6 billion.

Joint venture GlasfaserPlus with IFM. On November 5, 2021, Deutsche Telekom announced that IFM Global Infrastructure Fund would acquire a stake of 50 % in GlasfaserPlus, a fiber-optic build-out entity. The transaction was consummated on February 28, 2022. The sale price was EUR 0.9 billion.

Extension of agreement between T‑Mobile US and Crown Castle. In January 2022, T‑Mobile US and Crown Castle agreed a modification of existing arrangements, mainly concerning the lease of Crown Castle’s cell sites. This agreement includes a modification of the monthly lease payments for existing cell sites and an extension of the non-cancelable lease term until December 31, 2033 (with additional extension options). The modification of the arrangements results in a USD 7.3 billion (EUR 6.6 billion) increase in right-of-use assets and a USD 0.9 billion (EUR 0.8 billion) increase in property, plant and equipment. Net debt increases accordingly. The extension will give T‑Mobile US increased planning reliability and greater flexibility for building out the network as well as integrating and merging the existing mobile networks.

Reassignment of the security business. Effective July 1, 2022, Deutsche Telekom reassigned its subsidiary Deutsche Telekom Security and the security business in Germany, Austria, Switzerland, Hungary, and Slovakia from the Systems Solutions operating segment to the Germany operating segment.

For further information on these corporate transactions and others, please refer to the section “Group organization” in the combined management report and the sections “Other transactions that had no effect on the composition of the Group,” “Changes in the composition of the Group and other transactions,” and Note 38 “Segment reporting” in the notes to the consolidated financial statements.

Rating

On April 22, 2022, the rating agency Standard & Poor’s (S&P) raised its rating outlook for Deutsche Telekom AG from “stable” to “positive” and also confirmed its long-term rating of BBB. S&P considers an upgrade in the long-term rating within the next two years to be possible.

In July 2022, the rating agency Moody’s upgraded the rating for our subsidiary T‑Mobile US from Ba2 to Baa3 with a stable outlook. Standard & Poor’s raised their rating for T‑Mobile US in August 2022, from BB+ to BBB- with a positive outlook. Together with the existing BBB- rating with a positive outlook from Fitch, our U.S. subsidiary has now secured its first-ever full investment grade rating at all three major rating agencies.

Investments in networks

Awarding of 5G spectrum. In the United States and the countries of our Europe operating segment, a number of 5G spectrum award proceedings were held in the reporting year, at which T‑Mobile US and our national companies in Greece and Slovakia were each able to successfully secure spectrum. T‑Mobile US was awarded a further 7,000 2.5 GHz licenses at the FCC Auction 108 for which it paid a total of around USD 0.3 billion (EUR 0.3 billion). This is in addition to the 199 mobile licenses in mid-band spectrum from 3,450 to 3,550 MHz that were awarded to T‑Mobile US in January 2022 for a purchase price of USD 2.9 billion (EUR 2.6 billion) at the FCC Auction 110. On August 8, 2022, T‑Mobile US reached agreements with Channel 51 License and LB License on the acquisition of licenses in the 600 MHz spectrum for an aggregate purchase price of USD 3.5 billion (EUR 3.4 billion). The transactions are expected to be completed between mid and late 2023. With these spectrum acquisitions we can now forge ahead with the rapid build-out of our network infrastructure and bring more services, including 5G, to our customers.

For further information on spectrum awards, please refer to the section “The economic environment” in the combined management report.

Network build-out in Germany. We continued to build out our network infrastructure in Germany throughout the reporting year. At the end of 2022, our 5G network covered 94.8 % of the population. More than 80,000 antennas at around 24,000 sites are transmitting 5G. In around 620 cities, 5G is available in the powerful 3.6 GHz band on some 7,700 antennas at 2,600 sites. In addition, we began using the 700 MHz spectrum for 5G in June 2022, with over 8,800 antennas transmitting on this frequency in Germany. The resulting improvements in mobile coverage mainly benefit rural areas.

In the fixed network, the fiber-optic build-out took center stage. Since the start of 2022, we have rolled out fiber-optic lines (FTTH) to around 2.0 million more households/companies. A total of around 5.4 million households/companies thus had the option of a direct connection to our fiber-optic network as of the end of 2022. In the reporting year, we announced further plans to roll out FTTH in Bavaria and Baden-Württemberg and other parts of the country. We are set to maintain our rapid FTTH build-out pace over the coming two years by building out on our own, but also through partnerships, with the addition of up to 3 million households/companies per year. Our goal is to roll out fiber-optic lines to more than 10 million households/companies by the end of 2024.

Network build-out in the United States. T‑Mobile US’ 5G network covered large swaths of the United States as of the end of 2022. Our U.S. subsidiary now reaches 325 million people or 98 % of the U.S. population via the 600 MHz band and 263 million people with Ultra Capacity 5G in the 2.5 GHz band and millimeter-wave spectrum, and, beginning in December 2022, T‑Mobile US started deploying an additional new layer of 1,900 MHz Ultra Capacity 5G spectrum to deliver greater speed and performance. As planned, T‑Mobile US completed the decommissioning of its 3G CDMA network on June 30, 2022 and of former Sprint’s 4G LTE network in the third quarter of 2022, respectively.

Leveraging its extensive 5G network, in the reporting year T‑Mobile US additionally hooked up California, Colorado, Iowa, Kansas, Missouri, Oklahoma, Illinois, Michigan, Wisconsin, along with six further states in the Northeastern United States, to its high-speed internet service. By the end of 2022, a total of more than 50 million households across the United States were eligible for T‑Mobile US’ 5G high-speed internet.

Network build-out in Europe. In the countries of our Europe segment, too, we continued to press ahead with the network build-out in the reporting year. As of the end of 2022, our national companies covered 47.4 % of the population in our European footprint with 5G. In Greece, Montenegro, North Macedonia, Austria, and Croatia, as much as 50 to 92 % of the population already enjoy the benefits of 5G – keeping in mind that Makedonski Telekom only launched its first commercial 5G network in North Macedonia in February 2022. This means we can offer our customers 5G in almost all the countries of our European footprint. As of June 30, 2022, Magyar Telekom in Hungary shut down its 3G network to refarm the released spectrum for the better performing 4G and 5G services.

We also made good progress with the build-out of our fixed network in 2022. Since the start of 2022, we have rolled out fiber-optic lines (FTTH) to around 1.1 million more households/companies in our Europe segment. A total of 32.0 % or around 8.1 million households/companies thus had the option of a direct connection to our fiber-optic network as of the end of 2022. In the reporting year we announced further plans to roll out more FTTH in countries such as Austria and Croatia. By 2024, we are set to increase fiber-optic coverage in our Europe operating segment to 40 %, or by more than 3 million additional households/companies.

Corporate responsibility

Sustainability Day 2022. At the Group’s first-ever Sustainability Day on October 12, 2022, we highlighted our targets and measures that we will implement on our journey to becoming a sustainable telecommunications company. With sustainability as a top priority for Deutsche Telekom, each member of the Board of Management threw light on the subject from their own particular perspective. Sustainability is firmly anchored in both our Group strategy and the remuneration system for Board of Management members and other managers. Among other steps, we want to double our energy efficiency by 2024 and further decouple energy consumption from ever-rising online data volumes. The Group’s goal is to achieve climate neutrality for its own business operations (Scope 1-2) by 2025, and along its entire value chain (Scope 3) by 2040. This means an end to new orders of combustion engine vehicles in Germany, which is a first step in converting our entire fleet to electric vehicles. Additionally, from 2025 all devices marketed by Deutsche Telekom will be sold only in sustainable packaging. This is already the case with our new branded products.

For further information on the Sustainability Day, please refer to the topic special on our website.

GreenTech Festival. “Rethink. Reuse. Repeat.” was the motto at the world’s largest sustainability festival, held in Berlin from June 22 to 24, 2022, where we showcased how we combine ecological sustainability and smart concepts. Designed around a holistic approach to sustainability, our trade fair booth presented products such as the refurbished phone for consumers and business customers. Buying discarded smartphones at a fair price, refurbishing them, and recycling the components is in line with our vision of a circular economy.

For further information, please refer to our media report.

Corporate digital responsibility. Since 2017, Deutsche Telekom has been taking a close look at the topic of responsible digitalization from different perspectives. In early June 2022, we presented our newly drafted definition of digital responsibility: Corporate Digital Responsibility@Deutsche Telekom offers guidance on how to actively deal with the various impacts of digitalization and tackle the challenges they pose.

For further information, please refer to our media report.

For further information on our corporate responsibility activities, please refer to the section “Combined non-financial statement” in the combined management report.

Employees

Collective agreements. A total of 90 collective agreements were concluded with the trade unions in the reporting year for the Group entities in Germany covered by collective agreements. The “big” collective bargaining round for nine entities was successfully concluded in May 2022, with salary increases negotiated for a total of 55,000 employees. The agreements mainly include a two-phase salary increase for employees covered by collective agreements of between 2.7 and 3.1 % in 2022, and by a further 2.1 % in 2023. Furthermore, one-time payments were additionally agreed for the lower and middle pay groups to cushion the effects of inflation.

For further information on our HR activities, please refer to the section “Employees” in the combined management report.

Innovations

6G NeXt research consortium. In October 2022, we took over the lead for the 6G NeXt (Native Extensions for XR Technologies) research project, part of the “6G industry projects for research into integrated systems and sub-technologies for 6th generation mobile communications” program funded by Germany’s Federal Ministry of Education and Research. Under the project, nine partners from industry and science are working together to develop infrastructure for a high-speed software layer.

For further information, please refer to our media report.

World exhibition of digitalization: Digital X 2022. On September 13 and 14, 2022, the Digital X exhibition took place in Cologne. Together with more than 300 partners, over 200 brand houses, and around 60 start-ups, Europe’s leading digitalization initiative presented trends and technical innovations covering topics from 5G, IoT, and autonomous driving, to the metaverse and robotics. Around 70,000 visitors experienced the megatrends around mobility, security, new work, urbanization, and sustainability live and up close on dedicated routes through Cologne.

For further information on Digital X, please refer to the topic special on our website.

Hannover Messe 2022. We have transformed Hannover Messe into a 5G innovation campus. The trade fair, which took place this year from May 30 to June 2, offers a private campus network available exclusively to the trade fair company and exhibitors for their applications, while visitors to Hannover Messe can use the public 5G network on the grounds. The campus network is a 5G testing ground in which technology leaders from different sectors can operate and showcase industry solutions, such as autonomous forklift trucks, live for visitors.

For further information, please refer to our media report.

Mobile World Congress (MWC) 2022. At MWC in Barcelona from February 28 to March 3, 2022, we presented innovations and solutions for digital living, sustainable action, and social cohesion. The central theme was “Connecting Meaningful Technology.” The focus was on technologies that connect people with each other and make life and work easier for them: with self-parking cars (in cooperation with BMW and Valeo), mobile TV productions (together with RTL in the 5G standalone network), and borderless connections for the Internet of Things (for example, T IoT, the solution presented together with T‑Mobile US).

For further information, please refer to our media report.

For further information on our innovations, please refer to the section “Technology and innovation” in the combined management report.

Cooperations, partnerships, and major deals

Europe-wide fiber-optic cooperations. To make fiber-optic lines available to households and commercial units in Europe, we rely on fiber-optic cooperations for shared use of networks as a key cornerstone of our strategy. In June 2022, we announced a long-term cooperation with Glasfaser Ruhr in Germany. The common goal is to bring full fiber-optic coverage to Bochum, with over 134,000 direct FTTH lines to be laid by 2032. An FTTH product agreement was signed with Vodafone in June 2022. This strategic partnership, on the basis of open access, safeguards the utilization of our networks and accelerates the fiber-optic build-out in Germany. An FTTH product agreement was signed with 1&1 in February 2022, which enables 1&1 to offer fiber-optic services over our network. In 2022, we also reached and signed an agreement with the regional telecommunications provider wilhelm.tel, which primarily operates in Hamburg, on the general conditions for a long-term cooperation based on open access. We also cooperate with cities and municipal utility companies: For example, in early December 2022 we signed a cooperation agreement with the city of Sindelfingen on comprehensive fiber-optic coverage. The common goal is to roll out FTTH lines to all buildings in the metropolitan area by 2030. In June 2022, we presented the details of our cooperation in Bietigheim-Bissingen, which aims to bring fiber-optic lines to 90 % of all households by 2030.

Our European subsidiaries are also engaging in collaborations to drive forward the fiber-optic build-out. In August 2022, Magenta Telekom agreed a strategic partnership with French investor Meridiam for the fiber-optic build-out in Austria. The goal is to roll out over 650,000 new FTTH lines, predominantly in rural areas, by 2030. In the Czech Republic, T‑Mobile Czech Republic and Vodafone Czech Republic agreed in March 2022 to build out almost one million new fiber-optic lines together. The agreement also includes mutual network access to part of the existing infrastructure in a number of cities, including Prague and Brno.

Major deals for T‑Systems. In August 2022, T‑Systems signed a deal to migrate MAN Energy Solutions’ entire IT infrastructure to the cloud, including its SAP system and all further applications. This migration to the public and private clouds will create a flexible and scalable IT organization for more than 100 locations internationally. In September 2022 it was announced that T‑Systems will transfer Continental AG’s over 450 SAP systems, thus making it one of Germany’s largest SAP system landscapes, to the private cloud in Frankfurt/Main, where the IT service provider will continue to deliver support services for the SAP system until at least the end of 2027. The contract covers all services related to operation. In late June 2022, it was announced that T‑Systems will provide and manage digital identities for members of the Barmer health insurance provider via ID services. T‑Systems delivers this solution using the Verimi ID Wallet, which has already been approved as a secure digital procedure by the Federal Office for Information Security. T‑Systems will operate the service in its Open Sovereign Cloud in accordance with gematik standards. The World Health Organization (WHO) is making it easier for member states to introduce digital vaccination certificates in the future. To this end, it is setting up a gateway that enables QR codes on electronic vaccination certificates to be checked across national borders. T‑Systems has been selected as the industry partner to develop the verification service. After Covid-19, this service is also to be used as a standard procedure for other vaccinations, such as polio or yellow fever.

Partnership with SpaceX in the United States. In August 2022, T‑Mobile US and SpaceX announced joint plans that will enable our U.S. subsidiary to bring cell phone connectivity to its customers in parts of the United States previously without cell tower coverage using SpaceX’s Starlink satellites. To provide this service, the two companies will create a new network, broadcast from Starlink’s satellites using T‑Mobile US’ mid-band spectrum nationwide. With this technology, T‑Mobile US is planning to give customers text message coverage, including MMS and participating messaging apps, practically everywhere in the United States, Puerto Rico, and territorial waters. As a next step, the companies plan to pursue the addition of voice and data coverage.

Partnerships with Google expanded. In partnership with Google, we plan to define a joint roadmap for the telecommunications industry bringing the power of the cloud closer to mobile and connected devices. Telecommunications service providers are reimagining their network infrastructures and creating new cloud-based models for network deployment. Partnering with companies like Google Cloud enables us to create more secure, reliable, and scalable networks. As early as in January 2022, we announced an expanded partnership with Google in three key areas: enhanced mobile messaging services for businesses through Telekom RCS Business Messaging powered by Google and Jibe Cloud; the new Sovereign Cloud for Germany will be available to German cloud customers ahead of schedule; and MagentaTV One powered by Android TV OS is now available in Germany and expanding to additional European markets.

T‑Mobile US and DISH extend partnership. On June 21, 2022, our U.S. subsidiary and the mobile provider DISH signed an amendment to the 2020 Master Network Service Agreement. The 2020 Master Agreement gives customers of DISH, including prepaid customers, access to T‑Mobile US’ national 5G network. Among other changes, the amendment incorporates modified pricing and enhanced roaming solutions for DISH’s 5G customers.

Partnership with Zoom strengthened. At the end of February 2022, we announced the strengthening of our partnership with Zoom Video Communications. The solution Zoom X powered by Telekom developed jointly for the German market, combines Zoom’s video communication platform with our network. The new platform is aimed at business, corporate, and public sector customers. In addition to a secure network, we are responsible for contracting, order processing, nationwide support, and billing services. Zoom X has been available exclusively from us since mid-2022.

Products, rate plans, and services

Market launch of the T Phone. On October 5, 2022, we launched the brand-new 5G-capable T Phone in nine European countries. The T Phone was developed in collaboration with Google and builds on the successful REVVL line available in the United States. Our goal is to open up access for all to fast connected technology by offering low-cost handsets and additional rate plan bundles. The T Phone has been available in Germany since the start of 2023.

For further information, please refer to our media report.

New MagentaTV plan. We launched our new MegaStream TV plan on October 5, 2022. For EUR 26 a month, subscribers can enjoy content from Disney+, Netflix Standard, and RTL+ Premium. The plan also includes more than 100 HD TV channels, access to the MagentaTV Megathek media library, 50 hours of cloud storage, and much more besides. MegaStream can be used on five devices and up to three users can stream content simultaneously.

For further information, please refer to our media report.

IT made easy for small U.S. businesses. T‑Mobile US is joining forces with Apple to introduce a plan especially for small businesses. Available since July 21, 2022, Business Unlimited Ultimate+ for iPhone is the first and only wireless plan that makes IT easy for small businesses, pairing Apple Business Essentials with AppleCare+ for Business Essentials.

New smartphone from Nothing exclusive to Deutsche Telekom. The innovative Phone (1) by British manufacturer Nothing hit the market on July 21, 2022 with Deutsche Telekom being the sole network provider in Germany to offer the device. The Phone (1) is impressive with its innovative design and use of the latest technology, and comes delivered with the new Nothing OS based on Android.

For further information, please refer to our media report.

New MagentaMobil rate plans. We launched a new rate plan for mobile customers starting July 1, 2022, offering more data volume and extra price advantages thanks to additional SIM cards: the MagentaMobil PlusKarte. The main card determines how much data volume each additional card gets. The second card generally costs only EUR 19.95 per month and the monthly price for each card on top of that is EUR 9.95. What’s new is that all MagentaMobil PlusKarte SIM cards added to the rate plan are automatically given the same data volume as the main card.

For further information, please refer to our media report.

Voice over 5G for Portland and Salt Lake City. T‑Mobile US launched Voice over 5G (Voice over New Radio, VoNR) in the two U.S. cities in June 2022. VoNR services are routed via a standalone 5G network not anchored to LTE, which means it will be capable of delivering a new level of performance with fast speeds, real-time responsiveness, and full connectivity. Devices can now stay always connected to 5G, supporting future applications that require a seamless 5G connection.

Extension of dial around and preselection. Consumers in Germany can continue to make use of dial around access codes and carrier preselect services offering lower-cost call rates. Telekom Deutschland and VATM, an association representing telecommunications and multimedia companies active in the German market, have agreed to continue enabling these services through the end of 2024. The partners have extended the existing voluntary agreement for a further two years.

New IoT solution. In partnership with T‑Mobile US, we presented T IoT in the first quarter of 2022. We have combined our network expertise with that of our U.S. subsidiary to offer customers seamless connectivity in over 380 networks in 180 countries and regions worldwide. On top of this, IoT applications are easy to manage, since T IoT provides direct access to major platforms, services, and to customer support.

For further information, please refer to our media report.

Awards

In the reporting year we once again received numerous accolades for our networks, our products and service, our HR work and CR reporting, and our innovations. The illustration below shows a selection of the awards received.