Highlights in the first quarter of 2022

For further information on these and other events, please refer to our media information.

Guidance raised for the 2022 financial year

In view of the sound business performance in our United States operating segment, we are raising our guidance for adjusted EBITDA AL and free cash flow AL of the Group for the 2022 financial year. Instead of around EUR 36.5 billion, we now expect to post adjusted EBITDA AL of over EUR 36.6 billion. For free cash flow AL, we raise the guidance from previously around EUR 10 billion to now more than EUR 10 billion.

For more information, please refer to the section “Forecast” in the interim Group management report.

Corporate transactions

Sale of T‑Mobile Netherlands. On September 6, 2021, Deutsche Telekom and Tele2 signed an agreement with WP/AP Telecom Holdings IV on the sale of our subsidiary T‑Mobile Netherlands. The transaction was consummated on March 31, 2022 after obtaining the necessary approvals from the authorities and satisfying the other closing conditions. The sale price is based on an enterprise value of EUR 5.1 billion. The cash proceeds amounted to EUR 3.6 billion.

Joint venture GlasfaserPlus with IFM. On November 5, 2021, Deutsche Telekom announced that IFM Global Infrastructure Fund would acquire a stake of 50 % in GlasfaserPlus GmbH, a fiber-optic build-out entity. The transaction was consummated on February 28, 2022, after the EU Commission gave its approval on January 25, 2022 and the other closing conditions had been satisfied. The sale price came to EUR 0.9 billion, half of which was paid upon completion of the transaction and the other half of which will arise in stages upon achieving certain build-out milestones. The resulting joint venture is to build out an additional four million gigabit-capable FTTH lines in rural and development areas by 2028.

For further information on these corporate transactions, please refer to the section “Group organization, strategy, and management” in the interim Group management report and the section “Changes in the composition of the Group and other transactions” in the interim consolidated financial statements.

Investments in networks

Network build-out in Germany. At the end of the first quarter of 2022, our 5G network was available to 91.6 % of households in Germany – in more than 200 cities on the fast frequency of 3.6 GHz.

The total number of households in Germany passed by our fiber-optic network grew again in the first quarter of 2022.

Network build-out in the United States. In January 2022, in the United States, the Federal Communications Commission announced the results of the 3,450 MHz auction for mobile licenses. T‑Mobile US was awarded 199 mobile licenses in mid-band spectrum from 3,450 to 3,550 MHz for a purchase price of USD 2.9 billion (EUR 2.6 billion). T‑Mobile US’ Ultra Capacity 5G network in the fast 2.5 GHz and millimeter-wave (mmWave) bands covered 225 million people across the United States as of the end of the first quarter of 2022. Our U.S. subsidiary already reaches 315 million people in the United States with its 600 MHz spectrum. T‑Mobile US commenced the planned decommissioning of its 3G CDMA network on March 31, 2022.

Extension of agreement between T‑Mobile US and Crown Castle. In January 2022, T‑Mobile US and Crown Castle agreed a modification of existing arrangements, mainly concerning the lease of Crown Castle’s cell sites. This agreement includes a modification of the monthly lease payments for existing cell sites and an extension of the non-cancelable lease term until December 31, 2033 (with additional extension options). The modification of the arrangements results in a USD 7.3 billion (EUR 6.6 billion) increase in right-of-use assets and a USD 0.9 billion (EUR 0.8 billion) increase in property, plant and equipment. Net debt increases accordingly. The extension will give T‑Mobile US increased planning reliability and greater flexibility for building out the network as well as integrating and merging the existing mobile networks.

Network build-out in Europe. As of the end of the first quarter of 2022, our national companies covered 31.1 % of the population in our European footprint with 5G. One new addition is Makedonski Telekom, for example, which in February 2022 launched the first commercial 5G network in 15 cities of North Macedonia including the capital Skopje. In the first quarter of 2022, OTE in Greece participated successfully in the awarding of spectrum in the 430 MHz band.

At the end of the first quarter of 2022, a total of around 7.2 million households had the option to subscribe to a direct connection to our high-speed fiber-optic network with speeds reaching up to 1 Gbit/s.

Cooperations, partnerships, and major deals

Germany-wide fiber-optic cooperations. Our aim is for all households and commercial entities in Germany to have access to a fiber-optic line by 2030. If this aim is to be achieved, our competitors will also have to play their part. Hence, fiber-optic cooperations for shared use of networks based on open access are a cornerstone of our strategy. After reaching an agreement with 1&1 last year on the use of our VDSL and fiber-optic network, the first FTTH product agreement was signed in February 2022. This was the precondition for 1&1 to be able to offer its own fiber-optic products and services over our network. In March 2022, we also reached an agreement with the regional telecommunications provider wilhelm.tel, which primarily operates in Hamburg, on the general conditions for a long-term cooperation and signed a letter of intent. The plan is that customers with a fiber-optic line provided by wilhelm.tel will also be able to subscribe to our products from the end of 2022. In addition, the housing sector is increasingly switching to optical fiber: more and more private and public housing companies, home owners, and property managers have Telekom fiber-optic lines installed in their properties.

Our European subsidiaries are also engaging in collaborations to drive forward the fiber-optic build-out. In the Czech Republic, for example, T‑Mobile Czech Republic and Vodafone Czech Republic agreed in March 2022 to build out almost one million new fiber-optic internet lines together. The agreement also includes mutual network access to part of the existing infrastructure in a number of cities, including Prague and Brno.

Partnership with Google expanded. At the end of January 2022, we announced an expanded partnership with Google in three key areas: enhanced mobile messaging services for businesses through Telekom RCS Business Messaging powered by Google and Jibe Cloud; the new Sovereign Cloud for Germany will be available to German cloud customers ahead of schedule; and MagentaTV One powered by Android TV OS is now available in Germany and expanding to additional European markets.