20 Net revenue

Net revenue breaks down into the following revenue categories:

The breakdown of revenues by revenue category was changed in line with the Group’s management model, effective January 1, 2023. The comparative figures for 2022 have been adjusted retrospectively.

The service revenues essentially comprise predictable and/or recurring revenues from Deutsche Telekom’s core activities. These relate to revenues that are generated from services (i.e., revenues from fixed and mobile network voice services, incoming and outgoing calls, as well as data services) plus roaming revenues, monthly basic charges and visitor revenues, as well as revenues from the ICT business. Service revenue also includes revenues earned in connection with premium services for customers, such as reinsurance for device insurance policies and extended warranties. Revenue from insurance contracts in the scope of IFRS 17 in the Group amounted to EUR 4.6 billion (2023: EUR 4.5 billion, 2022: EUR 4.6 billion).

Non-service revenues mainly comprise one-time and variable revenues, e.g., revenue from the sale or rental of fixed-network or mobile devices, from value-added services, from application and contract services, revenue with virtual network operators, one-time revenue from the build-out of technical infrastructure, and revenue from vehicle and property leasing.

Net revenue includes revenue from the use of entity assets by others in the scope of IFRS 16 in the amount of EUR 0.9 billion (2023: EUR 1.1 billion, 2022: EUR 2.2 billion). Of the revenue from the use of entity assets by others reported in net revenue, EUR 0.7 billion (2023: EUR 0.7 billion, 2022: EUR 0.8 billion) relates to service revenues and EUR 0.2 billion (2023: EUR 0.4 billion, 2022: EUR 1.5 billion) to non-service revenues.

Net revenue for the reporting year was EUR 115.8 billion, up EUR 3.8 billion on the prior-year level. The United States operating segment in particular contributed to the positive revenue trend, which was attributable to an increase in service revenues mainly resulting from higher postpaid and prepaid revenues. Terminal equipment revenues increased slightly. In the Germany operating segment, revenue increased, primarily driven by growth in service revenues in the fixed-network core business, mainly due to broadband and IT business, and in mobile communications. In the Europe operating segment, revenue growth was primarily attributable to the increase in service revenues in the mobile and fixed-network business. Contract customer additions also had positive effects on terminal equipment revenues. Growth in the Digital, Cloud, and Road Charging areas drove revenue growth in the Systems Solutions operating segment.

For information on changes in net revenue, please refer to the section “Development of business in the Group” in the combined management report.

The total transaction price attributable to performance obligations that have (partially) not been fulfilled (hereinafter: outstanding transaction price) amounts to EUR 22.7 billion (2023: EUR 23.4 billion, 2022: EUR 25.6 billion).

The portion of the outstanding transaction price attributable to performance obligations that have not been fulfilled or not yet completely fulfilled at the end of the reporting year is generally recognized as revenue over the remaining term of the service contracts concluded. Since most service contracts – unless they can be canceled at any time – have a minimum contract term of 24 months, an average remaining term of approximately 12 months can be assumed, provided the course of business in the mass market business remains virtually unchanged. The disclosures only refer to transactions within the scope of IFRS 15, i.e., they do not include portions of the transaction price being allocated to performance obligations outside the scope of this standard, e.g., leases.

Deutsche Telekom generally makes use of the practical expedients in IFRS 15, according to which outstanding performance obligations under contracts with an expected original term of no more than one year and revenues recognized in accordance with the billed amounts are exempt from the disclosure requirement. Individual subsidiaries deviate from this general approach and have not made use of these practical expedients for groups of contracts with similar characteristics.

Service concession arrangements

Satellic NV, Machelen, Belgium, is a fully consolidated subsidiary of Deutsche Telekom and on July 25, 2014 signed a contractual arrangement with Viapass, the public agency responsible for toll collection in Belgium, for the set-up, operation, and financing of an electronic toll collection system. After Viapass accepted the system on March 30, 2016, the set-up phase was completed on March 31, 2016. The subsequent operation phase has a duration of 12 years, with the additional option for Viapass to extend the term three times by 1 year. Satellic has no entitlement to the toll revenue collected but receives contractually agreed fees for setting up and operating the system. Viapass is authorized to terminate the arrangement giving notice of six months with payment of reasonable compensation. In the event of regular or premature termination of the agreement, Satellic has an obligation to hand over to Viapass, on request, material assets for the operation of the toll collection system that have not yet passed to the ownership of Viapass; in such an event, however, the software platform for toll collection would not be handed over to Viapass. The agreement was classified as a service concession arrangement within the meaning of IFRIC 12. Since the start of the operation phase on April 1, 2016, the separate fees for operation and maintenance services have been recognized as revenue in the respective periods, which totaled EUR 89 million in the reporting year (2023: EUR 94 million, 2022: EUR 85 million).