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Germany

Customer development

thousands

 

 

 

 

 

 

 

 

Sept. 30,
2023

June 30, 
2023

Change
Sept. 30, 2023/
June 30, 2023 
%

Dec. 31,
2022

Change
Sept. 30, 2023/
Dec. 31, 2022 
%

Sept. 30,
2022

Change
Sept. 30, 2023/
Sept. 30, 2022 
%

Mobile customers

59,778

57,695

3.6

54,249

10.2

52,991

12.8

Contract customers

24,811

24,391

1.7

23,791

4.3

23,544

5.4

Prepaid customersa

34,967

33,304

5.0

30,458

14.8

29,447

18.7

Fixed-network lines

17,352

17,332

0.1

17,363

(0.1)

17,396

(0.3)

Retail broadband lines

14,952

14,856

0.6

14,715

1.6

14,641

2.1

Of which: optical fiberb

12,620

12,486

1.1

12,112

4.2

11,740

7.5

Television (IPTV, satellite)

4,259

4,208

1.2

4,122

3.3

4,071

4.6

Unbundled local loop lines (ULLs)

2,690

2,877

(6.5)

3,136

(14.2)

3,231

(16.7)

Wholesale broadband lines

8,218

8,137

1.0

8,045

2.2

8,033

2.3

Of which: optical fiber

7,211

7,103

1.5

6,970

3.5

6,929

4.1

a

Due to a network switchover, a portion of our prepaid customers had been migrated to another provider by the end of the third quarter of 2022.

b

From June 1, 2022 until December 31, 2022, we migrated customers to fiber-optic lines under our “Turn customers into fans” (Kunden zu Fans machen) initiative. Around 1 million lines in total were upgraded as part of this initiative.

Total

In Germany we continue to be market leader both in terms of fixed-network and mobile revenues. This success is attributable to our high-performance networks, a broad product portfolio, and good service. We want to offer our customers a seamless and technology-neutral telecommunications experience. We regularly adapt our product portfolio to address the needs of our customers.

The fixed-network broadband market hosts a large number of players with differing infrastructures – from national through to regional providers. In order to consolidate our position on the market as Germany’s leading telecommunications provider, we continue to add new offerings to our portfolio.

Mobile communications

The number of high-value mobile contract customers under the Telekom and congstar brands grew by 943 thousand customers overall. Sustained high demand for mobile rate plans with data volumes continues to drive this trend. The number of prepaid customers grew by 4.5 million against the start of the year, primarily due to M2M SIM cards used in the automotive industry.

Fixed network

Demand remained high for our fiber-optic-based lines, with the total number increasing to 19.8 million since the end of 2022. Two key factors are driving this strong growth: demand for higher bandwidths, and the technical migration of customer lines to optical fiber under our “Turn customers into fans” (Kunden zu Fans machen) initiative, which concluded at the end of 2022.

The number of retail broadband lines remained at a high level, increasing by 237 thousand in the first nine months of 2023 to 15.0 million. 45 % of the customers have subscribed to a rate plan with speeds of 100 Mbit/s or higher. We recorded an increase of 137 thousand in the number of TV customers compared with year-end 2022. The number of fixed-network lines stood at 17.4 million.

Wholesale

As of September 30, 2023, fiber-optic-based lines accounted for 66.1 % of all lines – 3.8 percentage points more than at the end of 2022. This growth is a result of the demand for our commitment agreements. Ongoing demand among retail customers for higher-bandwidth lines also contributed to the increase. The number of unbundled local loop lines decreased by 446 thousand compared with the end of the prior year, partly as a result of the shift to higher-value fiber-optic-based lines and partly from consumers switching to other providers. In addition, our wholesale customers are migrating their retail customers to their own fiber-optic-based lines. The total number of wholesale lines at the end of September 2023 was 10.9 million.

Development of operations

millions of €

 

 

 

 

 

 

 

 

 

 

 

 

Q1-Q3 2023

Q1-Q3 2022

Change
%

Q1 2023

Q2 2023

Q3 2023

Q3 2022

Change
%

FY 2022

Revenue

 

18,598

18,145

2.5

6,141

6,150

6,308

6,144

2.7

24,505

Consumers

 

9,310

9,217

1.0

3,077

3,055

3,178

3,120

1.9

12,370

Business Customers

 

6,784

6,640

2.2

2,269

2,245

2,270

2,241

1.3

9,040

Wholesale

 

2,028

2,017

0.5

672

682

673

664

1.4

2,676

Other

 

476

271

75.6

123

167

186

119

56.3

419

Service revenue

 

16,440

16,020

2.6

5,417

5,484

5,539

5,375

3.1

21,533

EBITDA

 

7,679

8,655

(11.3)

2,483

2,509

2,687

2,413

11.4

11,025

Special factors affecting EBITDA

 

(376)

1,276

n.a.

(104)

(167)

(105)

(130)

19.2

1,162

EBITDA (adjusted for special factors)

 

8,055

7,379

9.2

2,587

2,676

2,792

2,543

9.8

9,864

EBITDA AL

 

7,278

8,634

(15.7)

2,385

2,360

2,533

2,405

5.3

10,998

Special factors affecting EBITDA AL

 

(376)

1,276

n.a.

(104)

(167)

(105)

(130)

19.2

1,162

EBITDA AL (adjusted for special factors)

 

7,655

7,358

4.0

2,489

2,528

2,638

2,535

4.1

9,837

EBITDA AL margin (adjusted for special factors)

%

41.1

40.6

 

40.5

41.1

41.8

41.3

 

40.1

Depreciation, amortization and impairment losses

 

(3,155)

(2,993)

(5.4)

(1,036)

(1,054)

(1,065)

(1,001)

(6.4)

(4,019)

Profit (loss) from operations (EBIT)

 

4,525

5,662

(20.1)

1,447

1,455

1,623

1,412

14.9

7,006

EBIT margin

%

24.3

31.2

 

23.6

23.7

25.7

23.0

 

28.6

Cash capex

 

(3,443)

(2,906)

(18.5)

(1,187)

(1,113)

(1,143)

(1,128)

(1.3)

(4,399)

Cash capex (before spectrum investment)

 

(3,443)

(2,906)

(18.5)

(1,187)

(1,113)

(1,143)

(1,128)

(1.3)

(4,399)

Revenue, service revenue

In the first nine months of 2023, we generated revenue of EUR 18.6 billion, which was up by 2.5 % year-on-year. This was mainly attributable to growth in service revenues of 2.6 %, due to increased revenue in the fixed-network core business, largely broadband-driven, and to higher mobile service revenues. Another revenue driver was the partnership business. In organic terms, revenue increased by 1.8 % year-on-year and service revenue by 1.9 %.

Revenue from Consumers increased by 1.0 % compared with the prior year. Revenue from broadband business continued to grow, due in part to the positive effects from customer appreciation for reliable networks and high bandwidths. Volume-driven declines in revenue from voice components continued to impact on traditional fixed-network business. Mobile business declined on account of terminal equipment business. Mobile service revenues increased year-on-year.

Revenue from Business Customers was up by 2.2 % year-on-year. IT business and mobile business, the latter driven by sustained growth in the customer base, contributed to this uptrend. In organic terms, revenue increased by 0.7 % year-on-year.

Wholesale revenue was up slightly at the end of September 2023 by 0.5 % year-on-year.

Adjusted EBITDA AL, EBITDA AL

Adjusted EBITDA AL increased by EUR 0.3 billion or 4.0 % year-on-year to EUR 7.7 billion. In organic terms, adjusted EBITDA AL grew by 3.1 % year-on-year. Our adjusted EBITDA AL margin increased to 41.1 %. The main reasons for this increase are a sound operational development, driven by high-value revenue growth, and enhanced cost efficiency. Organic factors also included the lower headcount and ongoing implementation of efficiency enhancement and digitalization measures.

EBITDA AL decreased by EUR 1.4 billion to EUR 7.3 billion. In the prior-year period, special factors included the gain on deconsolidation of GlasfaserPlus (EUR 1.7 billion) and payments on account received from insurance companies in connection with damage sustained in the catastrophic flooding in July 2021 (EUR 0.1 billion).

Profit/loss from operations (EBIT)

Profit from operations amounted to EUR 4.5 billion, a decrease of 20.1 % year-on-year. This decline is primarily attributable to the gain recognized in the prior year on the deconsolidation of GlasfaserPlus. Depreciation, amortization and impairment losses were up against the prior-year level, mainly as a result of the sale and leaseback of passive network infrastructure in Germany in connection with the sale of GD Towers.

For further information on the sale of GD Towers, please refer to the section “Group organization, strategy, and management.”

Cash capex (before spectrum investment), cash capex

Cash capex increased by EUR 537 million or 18.5 % compared with the prior-year period, primarily due to different seasonal effects. Capital expenditure totaled around EUR 3.4 billion in the first nine months of 2023, in particular for the fiber-optic build-out. The number of households passed by our fiber-optic network had increased to around 6.9 million by the end of September 2023. In mobile communications, 95.4 % of German households can already use 5G.

5G
Refers to the mobile communications standard launched in 2020, which offers data rates in the gigabit range, mainly over the 3.6 GHz and 2.1 GHz bands, converges fixed-network and mobile communications, and supports the Internet of Things.
Glossary
AL – After Leases
Since the start of the 2019 financial year, we have taken the effects of the first-time application of IFRS 16 “Leases” into account when determining our financial performance indicators. “EBITDA after leases” (EBITDA AL) is calculated by adjusting EBITDA for depreciation of the right-of-use assets and for interest expenses on recognized lease liabilities. When determining “free cash flow after leases” (free cash flow AL), free cash flow is adjusted for the repayment of lease liabilities.
Glossary
Fixed-network lines
Lines in operation excluding internal use and public telecommunications, including IP-based lines. The totals reported in the combined management report were calculated on the basis of precise figures and rounded to millions or thousands. Percentages were calculated on the basis of the figures shown.
Glossary
M2M – Machine to Machine
Communication between machines. The information is automatically sent to the recipient. For example, in an emergency, alarm systems automatically send a signal to security or the police.
Glossary
Optical fiber
Channel for optical data transmission.
Glossary
Prepaid
In contrast to postpaid contracts, prepaid communication services are services for which credit has been purchased in advance with no fixed-term contractual obligations.
Glossary
Retail
The sale of goods and services to end users, as opposed to resale or wholesale.
Glossary
SIM card – Subscriber Identification Module card
Chip card that is inserted into a cell phone to identify it in the mobile network. Deutsche Telekom counts its customers by the number of SIM cards activated and not churned. Customer totals also include the SIM cards with which machines can communicate automatically with one another (M2M cards). The churn rate is determined and reported based on the local markets of the respective countries.
Glossary
ULL – Unbundled Local Loop
Competitors whose own networks do not reach into customers’ premises can rent unbundled local loop lines from Deutsche Telekom. Their networks end at the local exchanges. The ULL bridges the distance between the local exchange and the termination point on the customer’s premises or in their home, so it is also known as the “last mile.”
Glossary
Wholesale
Refers to the business of selling services to third parties who sell them to their own retail customers either directly or after further processing.
Glossary