Highlights in the third quarter of 2022

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

Guidance raised and dividend proposal 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 around EUR 37 billion, we now expect to post adjusted EBITDA AL of more than EUR 37 billion. We are also raising our guidance for adjusted earnings per share, which we now expect to surpass EUR 1.50. Against the background of the results of the first nine months of 2022 and subject to the approval of the Supervisory Board, the Board of Management plans to propose to the shareholders’ meeting, which will resolve on the appropriation of net income for the 2022 financial year, to pay out a dividend of EUR 0.70 per share for the 2022 financial year.

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

Transactions

Agreement with DigitalBridge and Brookfield on GD Towers. On July 13, 2022, Deutsche Telekom agreed to sell a 51.0 % stake in GD Towers, comprising its tower assets in Germany and Austria, currently assigned to the Group Development operating segment, to DigitalBridge and Brookfield. Deutsche Telekom will retain a 49.0 % stake, benefiting from future value upside at GD Towers. The transaction is subject to approval by the regulatory authorities and is expected to be completed by the start of 2023.

New limited partners admitted to infrastructure fund DIV II. In August and September 2022, Digital Transformation Capital Partners admitted new investors to the investment company Digital Infrastructure Vehicle II (DIV II). As a result, Deutsche Telekom’s share in DIV II decreased from 66.67 % to 41.25 % and the entity was deconsolidated in the third quarter of 2022.

Agreement with Cogent to sell the U.S. wireline business. On September 6, 2022, T‑Mobile US reached an agreement with Cogent Infrastructure (Cogent) on the sale of the fiber-optic-based wireline business of the former Sprint. The transaction is subject to approval by the authorities as well as other closing conditions. The transaction is expected to be completed in the second half of 2023.

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.

T‑Mobile US

Share buy-back program. On September 8, 2022, T‑Mobile US announced that its Board of Directors has authorized a share buy-back program for up to USD 14.0 billion of the company’s common stock through September 30, 2023. Repurchases are expected to be made from available cash on hand and proceeds of one or more debt issuances or other borrowings, based on the company’s evaluation of market conditions and other factors. By September 30, 2022, T‑Mobile US had bought back around 4.9 million shares with a total volume of USD 0.7 billion (EUR 0.7 billion) under this program. On September 15, 2022, T‑Mobile US issued senior notes with a total volume of USD 3.0 billion (EUR 3.0 billion) and intends to use the cash proceeds for general business purposes, which may include, among other things, the financing of the share buy-back program and the early repayment of higher-interest bonds.

Rating upgrade. In July 2022, the rating agency Moody’s upgraded the rating for our subsidiary T‑Mobile US from Ba2 to Baa3 with a stable outlook. Standard & Poor’s (S&P) raised their rating for T‑Mobile US in August 2022, from BB+ to BBB- with a positive outlook. Together with the existing BBB- rating with a positive outlook from Fitch, our U.S. subsidiary has now secured its first-ever full investment grade rating at all three major rating agencies.

Investments in networks

Network build-out in Germany. At the end of the third quarter of 2022, our 5G network was available to 93.5 % of households in Germany – in more than 540 cities and towns on the fast frequency of 3.6 GHz.

A total of around 4.5 million households in Germany thus had the option of a direct connection to our fiber-optic network as of September 30, 2022.

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 250 million people across the United States as of the end of the third quarter of 2022. Our U.S. subsidiary already reaches 97 % of the population of the United States with its 600 MHz spectrum. Leveraging its extensive 5G network, in July 2022, T‑Mobile US improved access to its high-speed internet service (5G Home Internet) in 32 cities and towns across California. A further 81 cities and towns were hooked up across Colorado, Iowa, Kansas, Missouri, and Oklahoma. In September 2022, our U.S. subsidiary expanded its footprint of 5G Home Internet across six more states in the Northeast. By the end of the third quarter of 2022, a total of more than 40 million households across the United States were eligible for T‑Mobile US’ 5G Home Internet.

The bidding phase of the Federal Communications Commission’s latest spectrum auction – FCC Auction 108 – in the United States closed on August 29, 2022, whereupon T‑Mobile US was awarded a further 7,000 2.5 GHz licenses, for which it paid a total of around USD 0.3 billion (EUR 0.3 billion). These new spectrum licenses will allow T‑Mobile US to reach some 81 million people in predominantly rural areas. Our U.S. subsidiary plans to bring Ultra Capacity 5G to further towns across the United States, as well as to significantly increase the bandwidths in many places that are already covered with Ultra Capacity 5G. On August 8, 2022, T‑Mobile US reached agreements with Channel 51 License and LB License on the acquisition of licenses in the 600 MHz spectrum for an aggregate purchase price of USD 3.5 billion (EUR 3.4 billion). The licenses are to be acquired without any associated network assets. T‑Mobile US currently utilizes these licenses under an existing arrangement covering fixed-term spectrum leases. The transactions are expected to be completed between mid and late 2023.

Network build-out in Europe. As of the end of the third quarter of 2022, our national companies covered 40.7 % of the population in our European footprint with 5G.

As of September 30, 2022, a total of around 7.7 million households in our European footprint had the option to subscribe to a direct connection to our fiber-optic network with speeds reaching up to 1 Gbit/s.

Cooperations, partnerships, and major deals

World exhibition of digitalization: Digital X 2022. On September 13 and 14, 2022, the Digital X exhibition took place in Cologne. Together with more than 300 partners, over 200 brand houses, and around 60 start-ups, Europe’s leading digitalization initiative presented trends and technical innovations covering topics from 5G, IoT, and autonomous driving, to the metaverse and robotics. Around 70,000 visitors experienced the megatrends around mobility, security, new work, urbanization, and sustainability live and up close on dedicated routes through Cologne.