40 Lessor relationships

Finance leases. Deutsche Telekom is a lessor in connection with finance leases. Essentially, these relate to the leasing of routers and other hardware, which Deutsche Telekom provides to its customers for data and telephone network solutions.

The following table shows how the amount of the net investment in a finance lease is determined:

The following table presents the gross investment amounts and the present value of payable lease payments:

Operating leases. Deutsche Telekom is a lessor in connection with operating leases. The underlying leases mainly relate to cell sites, building and co-location space, and unbundled local loop lines in the Germany operating segment, at Group Headquarters & Group Services, and in the Europe and United States operating segments.

Contracts on the provision of the latest generation of modems/routers to consumers in the fixed-network mass-market do not satisfy the definition of a lease, where modem and router features are incorporated in one device.

The leasing of local loop lines and space to wholesale fixed-network customers (e.g., co-location space) is also classified as a lease. The regulator requires Deutsche Telekom to make co-location space and unbundled local loop lines available to competitors. In contrast to unregulated products, the residual value risk for these assets is rather low because competitors are economically dependent on the use of these assets. In the unlikely event that co-location space and unbundled local loop lines are not leased, Deutsche Telekom will try to find new tenants for the vacant space or unleased lines. In the case of its own cell sites in the Europe operating segment, Deutsche Telekom will also strive to continue leasing – where possible – all of the free space that it does not itself occupy. The aim here is to reduce the vacancy rate of unused space as far as possible by re-letting and to spread the cost.

Operating leases exist for the following items of property, plant and equipment:

The maturity analysis of the lease payments arising from operating leases is as follows: