Highlights in the second 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, we are again raising our guidance for adjusted EBITDA AL of the Group for the 2022 financial year. Instead of more than EUR 36.6 billion, we now expect to post adjusted EBITDA AL of around EUR 37 billion. We expect the Group’s free cash flow AL (before dividend payments and spectrum investment) to come in at the recently raised guidance of over EUR 10 billion, upping the guidance for business outside of the United States from previously EUR 3.7 billion to EUR 3.8 billion.
For more information, please refer to the section “Forecast” in the interim Group management report.
Developments at senior management level
At the 2022 shareholders’ meeting, held on April 7, 2022, our shareholders elected Dr. Frank Appel as a member of Deutsche Telekom AG’s Supervisory Board. The Supervisory Board then elected Dr. Appel as the new Chairman of the Supervisory Board, as successor to Prof. Ulrich Lehner, who left the Supervisory Board with effect from the end of the shareholders’ meeting.
For further information, please refer to our media report.
Transactions
On April 12, 2022, Deutsche Telekom exercised a further portion of its stock options to acquire a total of around 21.2 million shares in T‑Mobile US from SoftBank for a purchase price of USD 2.4 billion (EUR 2.2 billion). Upon its completion, the transaction increased Deutsche Telekom’s stake in T‑Mobile US by 1.7 percentage points to 48.4 %.
For further information on corporate and other 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.
Rating
On April 22, 2022, the rating agency Standard & Poor’s raised its rating outlook for Deutsche Telekom AG from “stable” to “positive” and also confirmed its long-term rating of BBB. Standard & Poor’s considers an improvement in our long-term rating within the next two years to be possible.
Investments in networks
Network build-out in Germany. At the end of the first half of 2022, our 5G network was available to 92.6 % of households in Germany – in more than 460 cities on the fast frequency of 3.6 GHz. We began using the new 700 MHz spectrum for 5G in June 2022, with over 3,000 antennas now transmitting on this frequency. The resulting improvements in mobile coverage mainly benefit rural areas.
The total number of households in Germany passed by our fiber-optic network grew again as of June 30, 2022. In May and June of this year, we announced additional projects to further drive forward the fiber-optic build-out in regions that include Nuremberg, Bochum, and the Stuttgart Region.
Network build-out in the United States. T‑Mobile US’ Ultra Capacity 5G network in the fast 2.5 GHz and millimeter-wave (mmWave) bands covered 235 million people across the United States as of the end of the first half of 2022. Our U.S. subsidiary already reaches 320 million people in the United States with its 600 MHz spectrum. T‑Mobile US completed the decommissioning of its 3G CDMA network on June 30, 2022 as planned, and also began retiring the former Sprint’s 4G LTE network in the second quarter of 2022 as scheduled.
Network build-out in Europe. As of the end of the first half of 2022, our national companies covered 36.5 % of the population in our European footprint with 5G. In the second quarter of 2022, Slovak Telekom successfully acquired spectrum in the 3.x GHz band at auction. As of June 30, 2022, Magyar Telekom in Hungary shut down its 3G network to refarm the released spectrum for the better performing 4G and 5G services.
As of June 30, 2022, a total of around 7.4 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.
Corporate responsibility
Corporate digital responsibility. Since 2017, Deutsche Telekom has been taking a close look at the topic of responsible digitalization from different perspectives. In early June 2022, we presented our newly drafted definition of digital responsibility: Corporate Digital Responsibility@Deutsche Telekom offers guidance on how to actively deal with the various impacts of digitalization and tackle the challenges they pose.
For further information, please refer to our media report.
GreenTech Festival. “Rethink. Reuse. Repeat.” was our motto at the world’s largest sustainability festival, held in Berlin from June 22 to 24, 2022, where we showcased how we combine ecological sustainability and smart concepts. Designed around a holistic approach to sustainability, our trade fair booth presented products such as the refurbished phone for consumers and business customers. Buying discarded smartphones at a fair price, refurbishing them, and recycling the components is in line with our vision of a circular economy.
For further information, please refer to our media report.
T‑Systems goes all-electric. T‑Systems is switching its global company car fleet to electric cars from 2022. Over the coming years, the company’s share of electric-powered company cars will rise to almost 100 %. This will reduce T‑Systems’ CO2 emissions by around 1,000 tons per year. This annual saving corresponds to 10 % of the current remaining emissions at T‑Systems from self-generated or purchased energy.
For further information, please refer to our media report.
Employees
Deutsche Telekom and the ver.di trade union successfully concluded a collective agreement on May 12, 2022. The agreement applies to around 55,000 employees covered by collective agreements, apprentices, and dual students employed at the Group Headquarters, Telekom Deutschland, and Deutsche Telekom IT in Germany. It primarily consists of a two-stage salary increase for those employees covered by the collective agreement: by between 2.7 % and 3.1 % effective August 1, 2022 (pay group-dependent), and by a further 2.1 % effective June 1, 2023.
For further information, please refer to our media report.
Cooperations, partnerships, and major deals
Fiber-optic cooperations in Germany. In June 2022, we announced a long-term cooperation with GLASFASER RUHR. The common goal is to bring full fiber-optic coverage to Bochum, one of the Ruhr region’s largest cities, with over 134,000 direct FTTH lines to be laid by 2032. As cooperation partners, we will jointly build and operate the new gigabit infrastructure. The build-out is expected to begin in early 2023. After reaching an agreement with Vodafone at the end of 2020 on the use of our VDSL and fiber-optic network, the next FTTH product agreement was signed in June 2022. This strategic fixed-network partnership safeguards the utilization of our networks and accelerates the fiber-optic build-out in Germany.
T‑Mobile US and DISH extend partnership. On June 21, 2022, our U.S. subsidiary and the mobile provider DISH signed an amendment to the 2020 Master Network Service Agreement. The 2020 Master Agreement gives customers of DISH, including prepaid customers, access to T‑Mobile US’ national 5G network. Among other changes, the amendment incorporates modified pricing and enhanced roaming solutions for DISH’s 5G customers.
BARMER commissions T‑Systems and Verimi. In late June 2022, the companies announced that T‑Systems will provide and manage digital identities for members of the BARMER health insurance provider via ID services. T‑Systems delivers this solution using the Verimi ID Wallet, which has already been approved as a secure digital procedure by the Federal Office for Information Security. T‑Systems operates the service in its Open Telekom Cloud. Four data centers ensure the security and availability of the ID service, which is being developed in accordance with gematik specifications.
For further information, please refer to our media report.
Products, rate plans, and services
Hannover Messe 2022. We have transformed Hannover Messe into a 5G innovation campus. The trade fair, which took place this year from May 30 to June 2, offers a private campus network available exclusively to the trade fair company and exhibitors for their applications, while visitors to Hannover Messe can use the public 5G network on the grounds. The campus network is a 5G testing ground in which technology leaders from different sectors can operate and showcase industry solutions, such as autonomous forklift trucks, live for visitors.
For further information, please refer to our media report.
Voice over 5G for Portland and Salt Lake City. T‑Mobile US launched Voice over 5G (Voice over New Radio, VoNR) in the two U.S. cities in June 2022. VoNR services are routed via a standalone 5G network not anchored to LTE, which means it will be capable of delivering a new level of performance with fast speeds, real-time responsiveness, and full connectivity. Now that standalone 5G is beginning to carry voice traffic, devices can stay always connected to 5G, supporting future applications that require a seamless 5G connection.
Extension of dial around and preselection. Consumers in Germany can continue to make use of dial around access codes and carrier preselect services offering lower-cost call rates. Telekom Deutschland and VATM, an association representing telecommunications and multimedia companies active in the German market, have agreed to continue enabling these services through the end of 2024. The partners have extended the existing voluntary agreement for a further two years.
Awards
The illustration below shows the main awards received in the second quarter of 2022.
