The economic environment

This section provides important additional information and explains recent changes in the economic environment compared to those described in the 2025 combined management report (2025 Annual Report), focusing on macroeconomic developments, the overall economic outlook including the currently prevailing economic risks, and the regulatory environment in the first three months of 2026.

Macroeconomic development

The global economy initially demonstrated robust growth in the first quarter of 2026, buoyed by upticks in industry and trade volumes and in investments in technology prior to the escalation of the conflict in the Middle East. The intensification of the Iran conflict has had a detrimental impact on the macroeconomic conditions. Rising oil and gas prices, more volatile commodity and financial markets, and expectations of further inflation have left their mark on the economic outlook. The risks are likewise mounting for global supply chains.

Germany’s overall economic development lost momentum at the start of 2026. While isolated sentiment indicators suggested initial signs of stabilization, these did not fully reflect the effects of the emerging conflict in the Middle East. Inflation rose to 2.7 % in March 2026 and is expected to remain elevated at least for the time being due to the increase in oil and gas prices. In addition, in March 2026 the IWH Bankruptcy Update reported a rise in corporate insolvencies in Germany. By contrast, the United States economy started the year relatively strongly, with consumer spending and investments in technology proving the major drivers. At the same time, the first signs of a slowdown in consumer sentiment began to appear. Inflation in the United States was at 3.3 % in March 2026.

The eurozone experienced inconsistent economic development. While momentum remained restrained overall, the recent MSCI decision to reclassify the MSCI Greek Indexes to Developed Market status in May 2027 marked a major milestone in Greece’s economic recovery. This reclassification is expected to strengthen global visibility of the capital market, as well as the investor base and the liquidity of the Athens market, which could ultimately also prove beneficial for Deutsche Telekom’s subsidiary OTE as an Athens Stock Exchange listed company.

Overall economic outlook

The global economic outlook has deteriorated as a result of the Iran conflict. The International Monetary Fund (IMF) cut its growth forecasts in the April 2026 outlook, with global growth in 2026 now expected to fall to 3.1 %, eurozone growth to 1.1 %, and U.S. growth to 2.3 %, while inflation in 2026 is anticipated to be higher than previously expected. These forecasts are based on the assumption that the current disruptions to the energy markets will gradually fade over the course of the year. However, the risks posed by geopolitical uncertainty, possible further energy price surges, sustained disruptions to global supply chains, and further pressure on the financial markets remain elevated. Irrespective of this, the telecommunications industry has so far proven to be resilient in the face of economic fluctuations.

Regulation

Telecommunications Act reform in Germany. On March 2, 2026, the Federal Ministry for Digital Transformation and Government Modernisation (BMDS) advanced a draft bill for an act amending the Telecommunications Act (TKG). We welcome the approaches presented in the draft, which aim to accelerate fiber-optic and mobile network build-out and reduce red tape. The planned simplification of permit procedures and access to properties to fully build-out with optical fiber, as well as the open access obligation, are positive steps. At the same time, we feel there is room for improvement. The draft not only contains numerous exceptions to the open access obligation, but also rules which have the potential to delay or even block the fiber build-out. Yet other proposed rules would lead to sensitive network infrastructure data essentially being stored in the public domain.

The legislative process is expected to conclude by the end of the year and could still entail extensive changes to the draft as it currently stands. We will continue to closely monitor developments and strive to both avert risks for Deutsche Telekom and leverage further opportunities.

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. These charges were valid until December 31, 2025 and will be redefined in the second quarter of 2026 with retroactive effect from January 1, 2026. In the parallel Bundesnetzagentur regulatory procedure concerning the related standard offer, the first partial decision was issued on November 14, 2024 and the draft of the second partial decision was published on March 25, 2026. The procedure is expected to reach its final conclusion in the third quarter of 2026. Our standard offer for the FTTB/H wholesale products with Ethernet handoff also continues to be under review by the Bundesnetzagentur. In May 2025, the first partial decision was issued, requiring us to make changes to the wholesale agreement. These changes are currently being made to the procedure and agreement before our related standard offer is also terminated by the issue of the second partial decision in the first half of 2026.

Awarding of spectrum

In Hungary, Magyar Telekom spectrum allocations for 2x10 MHz in the 2,100 MHz band were renewed through 2042 at a cost of EUR 30.5 million (HUF 11 billion) on March 24, 2026. In Austria, the auction for the reallocation of spectrum in the 2,600 MHz band expiring at the end of 2026 as well as new spectrum in the 2,300 MHz band ended on April 10, 2026. T‑Mobile Austria secured 60 MHz in the 2,300 MHz band and 2x20 MHz in the 2,600 MHz band for around EUR 13 million.

In Germany, the award rules of the 2019 auction were declared unlawful by the Cologne Administrative Court on August 26, 2024. The Bundesnetzagentur consulted the market on how to proceed regarding the new decision until January 12, 2026. It considers possible options to be either a confirmation of its previous decision, with amended reasons, which would leave the 2019 auction unaffected, or a reallocation of the spectrum in a new award procedure. In both scenarios, we expect Deutsche Telekom to still have sufficient spectrum usage rights in the 2.1 GHz and 3.6 GHz bands to ensure the best possible coverage for its customers.

In the United States, the Federal Communications Commission (FCC) began the procedure to re-auction 200 licenses in the AWS‑3 bands (Auction 113). The FCC has scheduled the auction to begin on June 2, 2026. Furthermore, on November 20, 2025, the FCC started the procedure for the auction of spectrum in the 3.98 to 4.2 GHz range. This auction of at least 100 MHz to 180 MHz of spectrum must be completed by July 2027. No definitive auction date has yet been set. In Greece, the regulator began the procedure to re-award the spectrum allocations that will expire in mid-2027 in the 900 MHz and 1,800 MHz bands. In Poland, the procedure to award the 26 GHz band could also begin, if necessary. In the Czech Republic, the national regulator began the consultation process on the 26 GHz band; no award is expected in the near future. In Hungary, the regulator has started preparations for an extension of the licenses expiring in mid-2029 in the 800 MHz, 1,800 MHz, and 2,600 MHz bands.

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 May 30, 2025, T‑Mobile US entered into an agreement on the sale of 800 MHz spectrum licenses to affiliates of Grain Management (Grain) in exchange for cash consideration of USD 2.9 billion (EUR 2.5 billion) and the receipt of Grain’s 600 MHz spectrum licenses. It has been further agreed that T‑Mobile US may additionally receive a share of future proceeds from transactions entered into by Grain that monetize the 800 MHz spectrum licenses, subject to certain terms and conditions. Since May 30, 2025, the licenses concerned have been reported as held for sale with a carrying amount of EUR 3.1 billion. The transaction is subject to FCC approvals and certain other customary closing conditions, and is expected to be concluded in 2026.

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 1.0 billion and EUR 2.8 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. 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 amendment, the total cash consideration amounts to between USD 1.2 billion and USD 3.4 billion (EUR 1.0 billion and EUR 3.0 billion). The acquisition of a portion of the spectrum licenses with a value of approximately USD 45 million (EUR 39 million) is expected in 2026. The acquisition of the remaining licenses is then expected to close in the first half of 2028.