The economic environment

This section provides important additional information and explains recent changes in the economic environment compared to those described in the 2024 combined management report (2024 Annual Report), focusing on macroeconomic developments, the overall economic outlook including the currently prevailing economic risks, and the regulatory environment in the first half of 2025.

Macroeconomic development

Current indicators suggest that the global economy developed robustly overall in the first half of 2025. However, the change in political direction in the United States has led to increased volatility in the financial markets and given rise to a palpable increase in uncertainty amongst both companies and private households.

The inflation rate in the United States was at 2.7 % in June 2025, and 2.0 % in the eurozone. While the European Central Bank cut the key interest rate four times in the first half of 2025, the U.S. Federal Reserve (Fed) held its benchmark interest rate steady.

According to the Bitkom-ifo-Digitalindex, the business climate in Germany’s digital economy brightened in the first half of 2025. Business expectations improved significantly in June 2025 against the prior-month level, with the Bitkom-ifo-Digitalindex increasing by 4.1 points to -1.0 points. The digital economy remains more optimistic than the economy as a whole.

Overall economic outlook

The new U.S. administration’s realigned tariff policy has led to a substantial shift in the global macroeconomic conditions. Spurred by the trade tariffs and growing political uncertainty, the global growth forecasts have been significantly revised. In July 2025, the International Monetary Fund (IMF) reduced its outlook for global economic growth to 3.0 %, down from 3.3 % at the start of the year. The growth forecast for the United States was downgraded from 2.7 % to 1.9 % for 2025, and for Germany from 0.3 % to 0.1 %. Despite a small upward revision compared to the April 2025 growth forecasts, downside risks from potential tariff increases, rising uncertainty, and geopolitical tensions continue to weigh on the situation.

In light of current developments, it cannot be ruled out that the U.S. and other economies could show signs of economic downturn as the year progresses. Global inflation is expected to fall, while U.S. inflation is predicted to hold steady above target.

The telecommunications industry is not directly affected by trade tariffs and, thus far, has proven to be relatively resilient in the face of economic fluctuations.

Regulation

Review of the approval under merger control law for the joint venture Glasfaser NordWest. Following the Düsseldorf Higher Regional Court’s decision to annul the approval issued by the Bundeskartellamt, the Federal Court of Justice overturned this decision on February 25, 2025 and referred the matter back to the Düsseldorf Higher Regional Court. The Düsseldorf Higher Regional Court will now reach a new decision in consideration of the Federal Court of Justice’s legal position. Until a final substantive decision is reached on the legality of the Bundeskartellamt’s approval, these proceedings have no direct implications for the existence of the joint venture Glasfaser NordWest or for the local fiber build-out.

Telecommunications Act reform in Germany. In July 2025, the Federal Government adopted an amendment to the German Telecommunications Act (TKG) officially recognizing the build-out of telecommunications infrastructure as being of “overriding public interest.” The new legal status for infrastructure aims to remove barriers to planning and approval and significantly speed up build-out.

Awarding of spectrum

In Poland, the auction of frequencies in the 700 MHz and 800 MHz bands ended on March 25, 2025. T‑Mobile Polska secured one spectrum block in each band for a total of around EUR 185 million (PLN 781 million). In Slovakia, the auction for the bands expiring in 2025, 2026, and 2028 ended on July 10, 2025. Slovak Telekom secured 2x 10 MHz in each of the 800 and 900 MHz bands, 1x 20 MHz in the 1,500 MHz band, 2x 20 MHz in each of the 2,100 and 2,600 MHz bands, as well as 1x 40 MHz in the 2,600 MHz Time Division Duplex (TDD) band, for a total of approximately EUR 165 million.

In Germany, the Bundesnetzagentur extended the usage rights for the 800, 1,800, and 2,600 MHz spectrum bands on June 13, 2025. The extension is for five years. The one-time extension fee for Telekom Deutschland is EUR 200 million. In addition, usage right holders are required to fulfill extensive build-out obligations, which include providing coverage for 99.5 % of Germany’s surface area. The negotiation requirement with service providers and MVNOs was also specified in more detail.

The award rules of the 2019 auction were declared unlawful by the Cologne Administrative Court on August 26, 2024. This ruling initially has no direct impact on our spectrum usage rights in the 2.1 GHz and 3.6 GHz bands awarded in those proceedings, and the spectrum allocations will remain in effect until further notice. The ruling of the Cologne Administrative Court requires the Bundesnetzagentur to reach a new decision regarding the motions submitted by Freenet and EWE Tel in 2018 with respect to the imposition of a service provider obligation (instead of a negotiation obligation). On January 9, 2025, the Bundesnetzagentur filed a complaint against the non-allowance of appeal. If the ruling becomes final and legally binding, the Bundesnetzagentur will have to reach a new decision on the award and auction rules (Decisions III and IV).

Proceedings to re-award spectrum in the 2,600 MHz band expiring at the end of 2026 and spectrum in the 2,300 MHz band are starting in Austria. In Poland, preparations are under way to extend the 900 MHz licenses in the second half of 2025. If necessary, the procedure to award the 26 GHz band could also begin.

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 September 10, 2024, T‑Mobile US and N77 License (N77) had entered into an agreement on the sale of spectrum licenses, pursuant to which N77 had the option to purchase all or a portion of T‑Mobile US’ remaining 3.45 GHz licenses for a range of cash consideration. The number of licenses to be sold was determined based upon the amount of committed financing. On April 30, 2025, T‑Mobile US sold a portion of the licenses to N77 for USD 2.0 billion (EUR 1.8 billion) following regulatory approvals by the U.S. Federal Communications Commission (FCC).

On August 8, 2022, T‑Mobile US had entered into agreements with Channel 51 License and LB License (Channel 51) for the acquisition of spectrum licenses in the 600 MHz band in exchange for total cash consideration of USD 3.5 billion (EUR 3.2 billion). On March 30, 2023, the contractual parties had further agreed that the transaction be divided into two separate tranches. The first tranche of licenses, along with certain additional licenses from the second tranche, was transferred in the 2024 financial year. The transaction for the remaining licenses from the second tranche was closed on June 2, 2025 with the purchase price payment of USD 0.6 billion (EUR 0.5 billion), following regulatory approvals by the U.S. Federal Communications Commission (FCC).

On May 30, 2025, T‑Mobile US entered into an agreement on the sale of 800 MHz spectrum licenses to 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. As of June 30, 2025, the licenses concerned were reported as held for sale with a carrying amount of EUR 3.1 billion. The transaction is subject to regulatory approvals by the FCC and certain other customary closing conditions, and is currently expected to close in the fourth quarter of 2025 or the first quarter of 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. The transaction is expected to be closed in the first half of 2028. 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 2.9 billion).