Germany

Customer development

Total

In Germany we continue to be market leader both in terms of fixed-network and mobile revenues. This success is attributable to our high-performance networks, a broad product portfolio, and good service. We want to offer our customers a seamless and technology-neutral telecommunications experience. We regularly adapt our product portfolio to address the needs of our customers.

The fixed-network broadband market hosts a large number of players with differing infrastructures – from national through to regional providers. In order to consolidate our position on the market as Germany’s leading telecommunications provider, we continue to add new offerings to our portfolio.

Mobile communications

The number of high-value mobile contract customers under the Telekom and congstar brands grew by 1.2 million customers overall. Sustained high demand for mobile rate plans with data volumes continues to drive this trend. The number of prepaid customers grew by 5.8 million against the start of the year, primarily due to M2M SIM cards used in the automotive industry.

Fixed network

Demand remained high for our fiber-optic-based lines, with the total number increasing to 20.2 million since the end of 2022. Two key factors are driving this strong growth: demand for higher bandwidths, and the technical migration of customer lines to optical fiber under our “Turn customers into fans” (Kunden zu Fans machen) initiative, which concluded at the end of 2022.

The number of retail broadband lines remained at a high level, increasing by 303 thousand in 2023 to 15.0 million. 46 % of the customers have subscribed to a rate plan with speeds of 100 Mbit/s or higher. We recorded an increase of 205 thousand in the number of TV customers compared with year-end 2022. The number of fixed-network lines remained more or less stable at 17.3 million lines.

Wholesale

As of December 31, 2023, fiber-optic-based lines accounted for 67.4 % of all lines – 5.1 percentage points more than at the end of 2022. This growth is a result of the demand for our commitment agreements. Ongoing demand among retail customers for higher-bandwidth lines also contributed to the increase. The number of unbundled local loop lines decreased by 609 thousand compared with the end of the prior year, while fiber-optic-based lines increased by 337 thousand. These developments result partly from the shift to higher-value fiber-optic-based lines and partly from consumers switching to other providers. In addition, our wholesale partners are migrating their retail customers to their own infrastructures. The total number of wholesale lines at the end of 2023 was 10.8 million.

Development of operations

Revenue, service revenue

In 2023, we generated revenue of EUR 25.2 billion, an increase of 2.8 % year-on-year. This was mainly attributable to growth in service revenues of 2.6 %, due to increased revenue in the fixed-network core business, largely driven by broadband and IT business, and to higher mobile service revenues. Revenue also grew on the back of an increase of 43.7 % in other revenues, primarily from build-out services for our cooperation partners. In organic terms, revenue increased by 2.1 % year-on-year and service revenue by 1.9 %.

Revenue from Consumers increased by 2.2 % compared with the prior year. Revenue from broadband business continued to grow, due in part to the positive effects from customer appreciation for reliable networks and high bandwidths. Volume-driven declines in revenue from voice components continued to impact on traditional fixed-network business. The mobile business increased due to higher service revenues, mainly as a result of positive customer development.

Revenue from Business Customers was up by 2.4 % year-on-year. IT business and mobile business, the latter driven by sustained growth in the customer base, contributed to this uptrend. In organic terms, revenue increased by 0.9 % year-on-year.

Wholesale revenue was up slightly at the end of 2023 by 0.4 % year-on-year.

Adjusted EBITDA AL, EBITDA AL

Adjusted EBITDA AL increased by EUR 0.4 billion or 4.1 % year-on-year to EUR 10.2 billion. In organic terms, adjusted EBITDA AL grew by 3.0 % year-on-year. Our adjusted EBITDA AL margin increased to 40.6 %. The main reasons for this increase are a sound operational development, driven by high-value revenue growth, and enhanced cost efficiency. Organic factors with a positive impact on earnings also included the lower headcount and ongoing implementation of efficiency enhancement and digitalization measures.

EBITDA AL decreased by EUR 1.3 billion to EUR 9.7 billion. In the prior-year period, special factors included the gain on deconsolidation of GlasfaserPlus (EUR 1.7 billion) and insurance compensation in connection with damage sustained in the catastrophic flooding in July 2021 (EUR 0.2 billion). In the reporting year, special factors also included EUR 0.5 billion for socially responsible staff restructuring.

Profit/loss from operations (EBIT)

Profit from operations amounted to EUR 6.1 billion, a decrease of 13.3 % year-on-year. This decline is primarily attributable to the gain recognized in the prior year on the deconsolidation of GlasfaserPlus. Depreciation, amortization and impairment losses were EUR 0.2 billion higher than in the prior year, mainly as a result of the sale and leaseback of passive network infrastructure in Germany in connection with the sale of GD Towers.

For further information on the sale of GD Towers, please refer to the section “Management of the Group.”

Cash capex (before spectrum investment), cash capex

Cash capex increased by EUR 188 million or 4.3 % compared with the prior year, primarily due to investments in the fiber-optic business. Capital expenditure totaled around EUR 4.6 billion in 2023, with much of this figure going towards the build-out of our fiber-optic network. The number of households passed by our fiber-optic network had increased to around 8 million by the end of 2023. In mobile communications, 95.9 % of German households can already use 5G.