Highlights in the third quarter of 2021

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

Business and other transactions

Strategic measures to secure control of T‑Mobile US in the long term. On September 6, 2021, Deutsche Telekom followed up on its announcement from the Capital Markets Day 2021 with strategic action to increase its stake in T‑Mobile US in a move that secures the existing control over the U.S. subsidiary and full consolidation in the long term.

Increase in Deutsche Telekom’s stake in T‑Mobile US in a deal positioning SoftBank as a new shareholder and strategic partner. In the deal signed between Deutsche Telekom and SoftBank on September 6, 2021, Deutsche Telekom acquired a total of around 45.4 million T‑Mobile US shares from SoftBank on September 28, 2021. SoftBank received in return 225 million new shares in Deutsche Telekom AG by way of a capital increase against a non-cash contribution utilizing the 2017 Authorized Capital, making it a shareholder in Deutsche Telekom AG with a stake of around 4.5 %. The transaction increases Deutsche Telekom’s stake in T‑Mobile US by 3.6 percentage points, bringing it to 46.8 % as of September 30, 2021. In a potential further move to increase its shareholding in T‑Mobile US, Deutsche Telekom is weighing plans to purchase around 20 million additional T‑Mobile US shares using a portion of the anticipated proceeds from the agreed sale of T‑Mobile Netherlands. This transaction will raise its stake in T‑Mobile US to around 48.4 %. Deutsche Telekom and SoftBank have also agreed a new strategic partnership that will position Deutsche Telekom as a major European partner in the SoftBank ecosystem.

Agreed sale of T‑Mobile Netherlands. In the second deal also signed on September 6, 2021, Deutsche Telekom and Tele2 agreed to sell our subsidiary T‑Mobile Netherlands to WP/AP Telecom Holdings IV. The sale is expected to generate cash proceeds of around EUR 3.8 billion. The transaction is subject to approval by the authorities as well as other closing conditions.

Acquisition of Shentel. On May 28, 2021, a purchase agreement was signed between T‑Mobile US and Shentel for the acquisition of assets and liabilities directly associated with the wireless telecommunications operation of Shentel. The transaction was consummated on July 1, 2021. A preliminary purchase price has been set of USD 1.9 billion (EUR 1.6 billion).

Sale of Telekom Romania Communications. On November 6, 2020, OTE concluded an agreement with Orange Romania concerning the sale of its 54 % stake in Telekom Romania Communications, which operates the Romanian fixed-network business, to Orange Romania. The transaction was approved by the authorities and then consummated on September 30, 2021. The purchase price is EUR 296 million.

For further information on these business transactions and others, please refer to the section “Group organization, strategy, and management” in the interim Group management report and the sections “Other transactions that had no effect on the composition of the Group” and “Changes in the composition of the Group and other transactions” in the interim consolidated financial statements.

T‑Mobile US

Rating. In August 2021 the big three rating agencies all raised their ratings for our subsidiary, T‑Mobile US. Moody’s upgraded its rating from Ba2 to Ba1, Standard & Poor’s from BB to BB+, and Fitch from BB+ to BBB-.

Cyberattack on T‑Mobile US. In August 2021 T‑Mobile US confirmed that their systems were subject to a criminal cyberattack that compromised data of millions of their customers, former customers, and prospective customers. With the assistance of outside cybersecurity experts, T‑Mobile US located and closed the unauthorized access to their systems and identified customers whose information was impacted and notified them, consistent with state and federal requirements. T‑Mobile US also undertook a number of other measures to demonstrate their continued support and commitment to data privacy and protection. The forensic investigation is now complete and T‑Mobile US believes they now have a full view of the data compromised.

Investments in networks

Network build-out in Germany. In the third quarter of 2021, we upgraded over 1,000 additional sites for 5G. We thus now offer 5G to 87.3 % of German households. 5G is now available in over 90 cities over the 3.6 gigahertz frequency. Furthermore, our LTE network covered 98.9 % of German households at the end of the third quarter of 2021.

A total of around 2.9 million households in Germany had the option of a direct connection to our fiber-optic network (FTTH, FTTB) as of the end of the third quarter of 2021. We connected 435 new development areas, including 44 business parks, with optical fiber in the third quarter of 2021. Following the announcements in March and June 2021 of our FTTH build-out plans for a number of major cities including Berlin, Hamburg, Frankfurt/Main, Düsseldorf, and Munich, in September we revealed our fiber targets for the federal state of Saarland. By the end of 2028 we are set to directly connect over 120,000 households and business locations across the state with fiber to the building.

Network build-out in the United States. T‑Mobile US’ Ultra Capacity 5G network in the 2.5 GHz and millimeter-wave (mmWave) bands covered 190 million people across the United States as of the end of the third quarter of 2021. In parallel, the company is forging ahead with the build-out of 5G via the 600 MHz band, which is already available to some 308 million people nationwide.

Network build-out in Europe. Our national companies in Europe, too, worked systematically to build out their networks throughout the third quarter of 2021. For example, 480,000 households and businesses throughout Greece now have access to 100 % fiber to the home (FTTH) through the country’s largest fiber-optic network. In Slovakia, Slovak Telekom hit a further milestone with its own fiber-optic network now covering more than 800,000 households. At the end of the third quarter of 2021, a total of around 6.7 million households in our national companies had the option to subscribe to a direct connection to our high-speed fiber-optic network with speeds reaching up to 1 Gbit/s. In Croatia, Hrvatski Telekom is spearheading the expansion of 5G networks and services with a total of 600 5G base stations in operation and a 5G network already covering 2 million people. With the purchase of additional spectrum at the August 2021 auction, our Croatian subsidiary has created the necessary conditions to further consolidate its 5G leadership. In September 2021, T‑Mobile Polska put Poland’s 3,000th 5G base station into operation. It also switched off frequencies in the 3G network at the end of September 2021 to free up spectrum for deployment for the faster and better performing LTE/4G and 5G services. As of the end of the third quarter of 2021, we covered 97.9 % of the population in our European countries with LTE, reaching a total of around 109 million people.

Torrential rain and flooding in Germany

In mid-July 2021, an area of very low pressure with heavy rainfall in Germany led to catastrophic flooding. A large number of towns and communities, many of which are located in the federal states of North Rhine-Westphalia and Rhineland-Palatinate, suffered devastating damage to their roads, power cables, telephone lines, central offices, cell sites, and other infrastructure besides. In the days and weeks immediately following the disaster, we concentrated our efforts on restoring the mobile network to safeguard availability for the people on site and the relief workers, and to ensure connectivity while the fixed network is being rebuilt. Deutsche Telekom offered swift support for the residents affected, distributing around 5,000 mobile phones and SIM cards, power banks, quick-start packages, and other products free of charge. We are also working to rebuild the fixed network as quickly as possible. Mobile coverage had already been reinstated to all areas hit by the floods by the end of July, and we have been extending capacities to match needs ever since. Over 90 % of the more than 102,000 fixed-network connections damaged by the floods are now back on the network, and we are serving affected customers with appropriate stop-gap solutions in the interim. Our customer service team is also on the ground to help local residents with any questions related to the restoration of the service. In particularly hard-hit regions, we are rebuilding telecommunications infrastructure from scratch in close cooperation with the municipalities and other utility providers. This new infrastructure comprises an FTTH network that will offer some 35,000 new fiber-optic lines directly into the building.

Cooperations and partnerships

T‑Systems and Google Cloud partner to deliver sovereign cloud for Germany. The two companies plan to build a new cloud solution that allows customers to host their sensitive workloads whilst continuing to leverage the scalability, innovativeness, and reliability of public cloud services. Customers will retain full control over their data and the software used. A number of safeguards, including encryption and identity management, will address the strict compliance requirements applicable to institutions such as those in the public sector. T‑Systems will handle the operation of the cloud and the management of the services. The solution will initially be available to German customers in a wide range of industries including healthcare, automotive, public transport, and the public sector.

For more information, please refer to our media report.

Deutsche Telekom and Messe München implement high-speed communications for IAA MOBILITY 2021. Deutsche Telekom and Messe München expanded their cooperation in the area of mobile and fixed networks to deliver an entirely new visitor experience for this year’s IAA Mobility. With the exhibitor area of IAA extending over large parts of Munich for the first time this year, fiber-optic lines were laid and 29 new 5G sites set up to create a brand-new mobility platform. Deutsche Telekom has already been a strategic network partner of Messe München for mobile and fixed-network communications for several years.

For more information, please refer to our media report.

T‑Systems and Shell agree to advance digital innovation in pursuit of climate goals. T‑Systems and Shell Gas & Power Developments have signed a memorandum of understanding to advance digital innovation as both companies accelerate their transitions to net-zero emissions. Under the terms of the agreement, the two companies will collaborate on innovations and services to accelerate Shell’s digital transformation, and work together to identify opportunities to co-invest and participate in new business models focused on the decarbonization of society. Shell will supply renewable energy to our subsidiary T‑Mobile US and in turn T‑Systems will install more than 10,000 electric vehicle charging stations in Germany for Shell over the next three years. Both companies will also explore new areas of innovation in pursuit of greater sustainability, including hybrid and edge computing, 5G connectivity, and cooling technology for data centers.

For further information, please refer to our media report.

Products, rate plans, and services

Deutsche Telekom presents new smart solutions for inner-city mobility. We showcased innovative mobility concepts at ITS World Congress 2021 in Hamburg to demonstrate how technologies such as 5G, edge computing, sensor technology, cloud computing, and artificial intelligence can contribute to greater sustainability and safety – from cars that can quickly find a free parking space, to better quality, more reliable public transport, collision warning technology designed to keep cyclists safer on the roads, to reduced emissions through the networking of vehicles in and around the Port of Hamburg, and the introduction of intelligent urban tolling.

For more information, please refer to our media report.

E-governance via the smart city app. Telekom Deutschland’s Citykey app is the new digital companion for daily city life. Citizens can access digital government services, entertainment and events calendars, and tourism services all via the app. It’s an easier way to book appointments with the city, fill out official forms, see the latest news and information, report faulty infrastructure, and much more besides. Towns, cities, and municipalities can use the app to quickly and cost-effectively digitalize their services and actively involve users in configuring content.

Digital X 2021. On September 7/8, 2021 we hosted the Digital X 2021 world expo on all things digital in the heart of Cologne. In a packed program covering five stages and over 100 popular Cologne locations, including restaurants, bars, hotels, and co-working spaces, the city showcased the topics of digital transformation and sustainability for business and society. Talks and workshops presented digital solutions in areas ranging from artificial intelligence and 5G, to the Internet of Things, virtual reality/augmented reality, and cloud computing. The overriding goal: to create excitement and enthusiasm for digitalization. More than 300 enterprises presented solutions for the digital transformation. The event attracted several high-profile and international speakers and over 20,000 visitors.

For more information, please refer to our media report.

Deutsche Telekom builds 5G campus network for industrial developments in Berlin. We are building a 5G campus network at the Werner-von-Siemens Centre for Industry and Science in Berlin to enable applications for autonomous production logistics to be researched and tested. The goal is to quickly transfer solutions based on 5G and edge computing into the production technology practice of companies.

For more information, please refer to our media report.

Telekom shops launch new B2B concept. Self-employed business customers and small and medium-sized enterprises can now access Deutsche Telekom’s entire solutions portfolio in around 190 Telekom Stores across Germany. These include traditional fixed-network and mobile offerings alongside home working and IT solutions, such as hardware, Microsoft 365, Magenta Business POS, Cloud PBX, and security services. Specially trained customer advisors are now also taking appointments for external site visits in the vicinity of the shops, e.g., on-site visits at the customer’s premises.

Awards

The illustration below shows the main awards received in the third quarter of 2021.