16 Other provisions
The carrying amount of current and non-current other provisions decreased by EUR 0.2 billion compared with December 31, 2023 to EUR 7.9 billion, primarily due to the factors described below.
Provisions for termination benefits and other provisions for personnel costs include, among other components, provisions for staff restructuring. These have developed as follows in the 2024 financial year:
Provisions for termination benefits decreased by EUR 0.2 billion. In the prior year, expenses were recognized in connection with the program to reduce the workforce implemented by T‑Mobile US. The decrease is primarily attributable to the cash outflows resulting from this program in the financial year.
Other provisions for personnel costs increased by EUR 0.4 billion, mainly due to an increase in provisions for short- and long-term variable remuneration components and the provisions for phased retirement. The effects of changes in the composition of the Group are the result of the acquisition of Ka’ena in the United States. The carrying amount of the provision recognized for the Civil Service Health Insurance Fund (Postbeamtenkrankenkasse – PBeaKK) remained at the prior-year level. Other provisions for personnel costs also include provisions for deferred compensation and allowances, as well as for anniversary gifts.
The provisions for restoration obligations remained at the prior-year level. These include the estimated costs for dismantling and removing assets, and restoring the sites on which they are located. The estimated costs are included in the costs of the relevant assets.
Provisions for litigation risks decreased by EUR 0.4 billion compared with the prior year, mainly due to payments to settle the consumer class action in the Federal Court in connection with the cyberattack on T‑Mobile US in August 2021. The provisions for litigation risks primarily relate to possible settlements attributable to pending lawsuits.
For more information on the proceedings against T‑Mobile US as a consequence of the cyberattack on T‑Mobile US in August 2021, please refer to Note 39 “Contingencies.”
Provisions for sales and procurement support also remained at the prior-year level. These provisions are recognized for dealer commissions and market development funds (advertising subsidies, and refunds).
Miscellaneous other provisions also remained at the prior-year level. These include provisions related to onerous executory contracts, the disposal of businesses and site closures, in particular in prior financial years, as well as warranty and environmental damage provisions.
In the measurement of the other provisions, Deutsche Telekom is exposed to interest rate fluctuations, which is why the effect of a possible change in the interest rate on the principal non-current provisions was simulated. The other, non-staff-related provisions are discounted using maturity-related discount rates specific to the respective currency area. To this end, Deutsche Telekom determines discount rates with maturities of up to 30 years. In 2024, the discount rates ranged from 2.52 to 3.78 % (2023: from 2.95 to 4.10 %) in the euro currency area and from 4.81 to 6.09 % (2023: from 5.18 to 6.17 %) in the U.S. dollar currency area. If the discount rate were increased by 50basis points with no other change in the assumptions, the present value of the principal other non-current provisions would decrease by EUR 59 million (December 31, 2023: EUR 62 million). If the discount rate were decreased by 50 basis points with no other change in the assumptions, the present value of the principal other non-current provisions would increase by EUR 60 million (December 31, 2023: EUR 65 million).