Germany

Customer development

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

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.