Segment structure
Our financial reporting is divided into five operating segments plus the Group Headquarters & Group Services segment, each of which we describe in detail below.
Our Germany operating segment comprises all fixed-network and mobile business activities for consumers and business customers, including separate sales entities in Germany to allow a customer-centric sales approach. The segment offers a tailored service and product portfolio. The bundling of our sales and service business within Sales & Service places a further focus on customer experience and on customer satisfaction. The Wholesale business delivers wholesale telecommunication services for third-party telecommunications companies. The build-out of the mobile and fixed networks in Germany is managed by the Technology business unit.
Our United States operating segment combines all mobile activities in the U.S. market. T‑Mobile US provides service, devices, and accessories across its flagship brands. In addition, it sells devices to dealers and other third-party distributors for resale. It provides wireless communications services through a variety of service plan options to U.S. domestic customers including plans marketed to businesses, as well as wireless devices. In addition to its wireless communications services, it offers High Speed Internet utilizing its nationwide 5G network. T‑Mobile US also provides products that are complementary to its wireless communications services, including device protection.
Our Europe operating segment comprises all fixed-network and mobile operations of the national companies in Greece, Hungary, Poland, the Czech Republic, Croatia, Slovakia, Austria, North Macedonia, and Montenegro. In these countries, we are an integrated provider of telecommunications services. In Romania, our focus is on mobile communications. Besides traditional B2C and B2B fixed-network and mobile business, most of our national companies also offer ICT solutions for business customers.
Our Systems Solutions operating segment offers B2B ICT services in the core DACH market (Germany, Austria, and Switzerland) under the T‑Systems brand. T‑Systems primarily addresses the ICT growth areas of advisory, cloud services, and digitalization with a corresponding portfolio of products. Security solutions and networking are integral components of its service offering, supported by strategic partnerships. The services penetrate deep into the value chains of selected industries (automotive, healthcare, public sector). This segment comprises four portfolio areas: Cloud, Digital, Security (in close collaboration with Deutsche Telekom Security), and Advisory (together with Detecon as an advisory partner). In addition, the Road User Services business unit offers road toll systems.
Our Group Development operating segment actively manages entities, subsidiaries, and equity investments to grow their value while giving them the entrepreneurial freedom they need to promote their continued strategic development. The investment management group Deutsche Telekom Capital Partners; Comfort Charge, which is a provider of e-mobility charging infrastructure; and the Group functions of Mergers & Acquisitions and Strategic Portfolio Management are also assigned to Group Development.
Group Headquarters & Group Services comprises all Group units that cannot be allocated directly to one of the operating segments, as well as our Board of Management department Technology and Innovation, which unites the cross-segment technology, innovation, IT, and security functions of our Germany, United States, Europe, and Systems Solutions operating segments. As the organization that sets the direction and provides impetus, it defines strategic aims for the Group, ensures they are met, and becomes directly involved in selected Group projects. Group Services provides services to the entire Group. In addition to typical services provided by Deutsche Telekom Services Europe, such as financial accounting, human resources services, and operational procurement, Group Services also includes placement services provided by our personnel service provider, Vivento. Vivento is in charge of securing external employment opportunities for employees, predominantly in the public sector. Further units are Group Supply Services for our real estate management and our strategic procurement, and Telekom MobilitySolutions, which is a full-service provider for fleet management and mobility services.
Changes to the segment and organizational structure in 2024
Acquisition of Ka’ena in the United States. On March 9, 2023, T‑Mobile US entered into a Merger and Unit Purchase Agreement for the acquisition of 100 % of the outstanding equity of the U.S. prepaid provider Ka’ena and its subsidiaries including, among others, Mint Mobile, for a maximum purchase price of USD 1.35 billion. The transaction was consummated on May 1, 2024. All necessary regulatory approvals had been duly granted and all other closing conditions met. Ka’ena is included in Deutsche Telekom’s consolidated financial statements as of May 1, 2024.
At deal close, T‑Mobile US made an upfront payment of around USD 1.0 billion (EUR 0.9 billion), comprising a cash component of around USD 0.4 billion (EUR 0.4 billion) and around 3 million ordinary shares of T‑Mobile US with a total value of around USD 0.5 billion (EUR 0.5 billion), determined on the basis of the closing share price on April 30, 2024. In addition, there is a variable earnout payable on August 1, 2026 if Kaʼena achieves specified performance indicators.
For further information on the acquisition of Ka’ena in the United States, please refer to the section “Changes in the composition of the Group and other transactions” in the consolidated financial statements.
(Expected) changes to the segment and organizational structure in 2025
Agreement on the acquisition of Lumos in the United States. On April 24, 2024, T‑Mobile US entered into an agreement with the investment fund EQT on the acquisition of the fiber-to-the-home platform Lumos. The transaction is subject to regulatory approvals as well as other customary closing conditions and is expected to close in the first half of 2025. Upon closing, T‑Mobile US is expected to invest approximately USD 1.0 billion (EUR 0.9 billion) in the joint venture to acquire a 50 % equity stake and all existing fiber customers, with the funds invested by T‑Mobile US being used by Lumos for future fiber builds. In addition, T‑Mobile US is expected to contribute an additional amount of approximately USD 0.5 billion (EUR 0.5 billion) between 2027 and 2028.
Agreement on the acquisition of UScellular in the United States. On May 24, 2024, T‑Mobile US entered into an agreement on the acquisition of UScellular’s wireless operations and specific spectrum licenses. The purchase price totals around USD 4.4 billion (EUR 4.2 billion) and comprises a cash component and the transfer of debt of up to USD 2.0 billion (EUR 1.9 billion). The transaction is subject to regulatory approvals as well as other customary closing conditions and is expected to close in mid-2025.
Agreement on the acquisition of Metronet in the United States. On July 18, 2024, T‑Mobile US entered into an agreement with KKR on the acquisition of the fiber-to-the-home platform Metronet and some of its subsidiaries. The transaction is subject to regulatory approvals as well as other customary closing conditions and is expected to close in 2025. Upon closing, T‑Mobile US is expected to invest approximately USD 4.9 billion (EUR 4.7 billion) in the joint venture to acquire a 50 % equity stake and all existing residential fiber customers, as well as to fund the joint venture.
Agreement on the acquisition of Vistar Media in the United States. On December 20, 2024, T‑Mobile US entered into an agreement on the acquisition of 100 % of the outstanding capital stock of Vistar Media, a provider of technology solutions for digital-out-of-home advertisements, for a purchase price of approximately USD 0.6 billion (EUR 0.6 billion). The purchase price is subject to certain agreed-upon working capital and other adjustments. The transaction was consummated on February 3, 2025. All necessary regulatory approvals had been duly granted and all other closing conditions met.