Major regulatory decisions

Our business activities are largely subject to national, European, and U.S. regulation, which is associated with extensive powers to intervene in our product design and pricing, particularly in Europe. We were still subject to extensive regulation in our fixed-network and mobile businesses in 2024.

Regulation

Ongoing court case on the approval under merger control law for the joint venture Glasfaser NordWest. On September 12, 2023, the Federal Court of Justice had admitted the appeal filed by the Bundeskartellamt and Telekom Deutschland against the Düsseldorf Higher Regional Court’s decision dated September 22, 2021. The Düsseldorf Higher Regional Court had decided to reverse the Bundeskartellamt’s approval under merger control law of the joint venture Glasfaser NordWest. Following an oral hearing on October 1, 2024, the Federal Court of Justice’s decision is anticipated on February 25, 2025. This may contain a final substantive decision on the legality of the approval decision by the Bundeskartellamt or a referral back to the Higher Regional Court. The joint venture can continue building out FTTH until the Bundeskartellamt decides otherwise.

European Commission publishes white paper. On February 21, 2024, the European Commission published a white paper entitled “How to master Europeʼs digital infrastructure needs?” This white paper compiles proposals for measures by the European Union in preparation for a planned Digital Networks Act. Deutsche Telekom submitted its view on the proposals on June 28, 2024 during the open consultation process. Legislative initiatives, like the Digital Networks Act, based on the white paper and the responses to the public consultation are expected at the end of 2025.

The white paper identifies future action areas as the build-out of digital networks of the future, managing the transition to new technologies and business models, covering the future need for connectivity, and the safeguarding of economic competitiveness and of secure, resilient infrastructure in the EU. As a result, a far-reaching revision of the current regulatory framework is expected.

Bundesnetzagentur’s regulatory procedures based on the decision on access regulation including FTTB/H network access. On July 17, 2024, the Bundesnetzagentur published the approval on the regulated charges for access to civil engineering infrastructure. The charges apply until December 31, 2025. In the parallel Bundesnetzagentur regulatory procedure concerning the related reference offer, the first partial decision was issued on November 14, 2024. However, the overall procedure is not expected to be finally concluded before the second quarter of 2025.

Awarding of spectrum

In 2024, spectrum in the 26 GHz band and residual spectrum in the 3.4 to 3.8 GHz band were auctioned off in Austria. In the 26 GHz band, T‑Mobile Austria secured 400 MHz of nationwide spectrum for itself, and in the 3.4 to 3.8 GHz band, 40 MHz in Vienna and 60 MHz in Carinthia, for EUR 10.5 million in total. In the United States, the spectrum in the 2.5 GHz band acquired in Auction 108 in September 2022 for around USD 0.3 billion (EUR 0.3 billion) was allocated. The majority of this spectrum was connected immediately. In the Czech Republic, the 900/1,800 MHz GSM license expiring in 2024 was extended at a cost of around EUR 28 million for T‑Mobile Czech Republic. In Slovakia, the usage rights for spectrum in the 900 MHz band were extended by another 3 years for EUR 4.3 million.

In Germany, the regulatory authority Bundesnetzagentur consulted on a draft decision concerning the extension of usage rights for the 800 MHz, 1,800 MHz, and 2,600 MHz mobile frequencies, which expire at the end of 2025, by five years. The extension is to replace the originally planned auction to award these frequencies. In return, the draft stipulates requirements such as further coverage obligations for the existing frequency owners as well as the obligation to allow network provider 1&1 to co-use frequencies below the 1 GHz band. On January 9, 2025, a public consultation was held on the Bundesnetzagentur’s updated draft, followed by a consultation period ending on January 23, 2025. The regulatory authority’s final decision is expected in the first half of 2025.

The award rules of the 2019 auction were declared unlawful by the Cologne Administrative Court on August 26, 2024. However, this ruling initially has no direct impact on our spectrum usage rights in the 2.1 and 3.6 GHz bands awarded in those proceedings, and the spectrum allocations will remain in effect until further notice. The ruling of the Cologne Administrative Court requires the Bundesnetzagentur to reach a new decision regarding the motions submitted by Freenet and EWE Tel in 2018 with respect to the imposition of a service provider obligation (instead of a negotiation obligation). On January 9, 2025, the Bundesnetzagentur filed a complaint against the non-allowance of appeal. If the ruling becomes final and legally binding, the Bundesnetzagentur will have to reach a new decision on the award and auction rules (Decisions III and IV).

Proceedings to re-award spectrum in the 2,600 MHz band expiring at the end of 2026 and spectrum in the 2,300 MHz band are starting in Austria. In Poland, the public consultation was opened on October 4, 2024 on the award of 2x30 MHz in the 700 MHz band and 2x5 MHz in the 800 MHz band. The auction is scheduled for the first quarter of 2025. If necessary, the procedure to award the 26 GHz band could also begin. In Slovakia, auctions for the 800, 900, 1,500, 2,100, and 2,600 MHz bands expiring in 2025, 2026 and 2028 are under discussion.

The following table provides an overview of the main ongoing and planned spectrum awards and auctions as well as license extensions. It also indicates spectrum to be awarded in the near future in various countries.

Agreements on spectrum licenses

On September 10, 2024, T‑Mobile US and N77 License (N77) entered into an agreement on the sale of spectrum licenses, pursuant to which N77 has the option to purchase all or a portion of T‑Mobile US’ remaining 3.45 GHz licenses for a range of cash consideration. The number of licenses sold will be determined based upon the amount of committed financing raised by N77. At the reporting date, the licenses concerned had a carrying amount of USD 2.7 billion (EUR 2.6 billion). The transaction is subject to approval by the Federal Communications Commission (FCC).

On August 8, 2022, T‑Mobile US entered into agreements with Channel 51 License and LB License (Channel 51) for the acquisition of spectrum licenses in the 600 MHz band in exchange for total cash consideration of USD 3.5 billion (EUR 3.4 billion). On March 30, 2023, the contractual parties further agreed that the transaction be divided into two separate tranches. The transfer of the remaining licenses in accordance with the agreements is subject to regulatory approvals and certain other customary closing conditions. On December 29, 2023, the FCC approved the transfer of the first tranche of licenses. The first tranche was concluded on June 24, 2024. The corresponding purchase price payment of USD 2.4 billion (EUR 2.2 billion) was made on August 5, 2024. On October 22, 2024, the FCC approved the transfer of certain licenses from the second tranche. These licenses were transferred and the associated purchase price of USD 0.5 billion (EUR 0.5 billion) paid on December 6, 2024. The transfer transaction for the remaining licenses from the second tranche is expected to be closed in 2025.

On July 1, 2020, T‑Mobile US and DISH Network Corporation (DISH) reached an agreement on the sale of spectrum licenses, under which DISH agreed to purchase certain 800 MHz spectrum licenses from T‑Mobile US for USD 3.6 billion (EUR 3.2 billion). On October 15, 2023, T‑Mobile US and DISH modified the agreement to include, among other changes, a non-refundable extension fee of USD 0.1 billion (EUR 0.1 billion) which DISH will pay to T‑Mobile US, as well as the requirement that the purchase of the spectrum licenses must be finalized by April 1, 2024. DISH did not exercise its purchase option by April 1, 2024. The extension fee already paid on October 25, 2023 was retained in accordance with the agreement. T‑Mobile US was contractually obligated to offer the licenses for sale at auction. The associated auction process ended on October 1, 2024. Since bidding did not reach the defined minimum purchase price of USD 3.6 billion by the end of the auction, T‑Mobile US was relieved of its obligation to sell the licenses. T‑Mobile US is currently exploring alternatives to sell or utilize the licenses.

On September 12, 2023, T‑Mobile US agreed with U.S. cable network operator Comcast to acquire spectrum in the 600 MHz band in exchange for total cash consideration of between USD 1.2 billion and USD 3.3 billion (EUR 1.2 billion and EUR 3.2 billion). The final purchase price will be determined at the time the parties make the required transfer filings with the FCC. At the same time, T‑Mobile US and Comcast have concluded exclusive leasing arrangements. The transaction is expected to be closed in the first half of 2028. On January 13, 2025, T‑Mobile US and Comcast entered into an amendment to the license purchase agreement pursuant to which T‑Mobile US will acquire additional spectrum. As a consequence of the change agreement, the total cash consideration amounts to between USD 1.2 billion and USD 3.4 billion (EUR 1.2 billion and EUR 3.3 billion).