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Deutsche Telekom AG - Interim Group report - January 1 to March 31, 2011

37Interim Group management report Development of operations. Q1 2011 millions of € Q1 2010 millions of € Change millions of € Change % FY 2010 millions of € Total revenue 3,770 3,814 (44) (1.2) 16,087 Profit from operations (EBIT) 401 544 (143) (26.3) 2,092 EBIT margin % 10.6 14.3 13.0 Depreciation, amortization and impairment losses (463) (464) 1 0.2 (2,064) EBITDA 864 1,008 (144) (14.3) 4,156 Special factors affecting EBITDA (7) - (7) n.a. - EBITDA (adjusted for special factors) 871 1,008 (137) (13.6) 4,156 EBITDA margin (adjusted for special factors) % 23.1 26.4 25.8 Cash capex (546) (481) (65) (13.5) (2,121) Average number of employees 36,237 38,663 (2,426) (6.3) 37,795 Total revenue. Total revenue at the United States operating segment (T-Mobile USA) of EUR 3.8 billion for the first quarter of 2011 was comparable to EUR 3.8 billion for the first quarter of 2010. In U.S. dollars, revenues of T-Mobile USA declined by 2.1 percent year-on-year, due primarily to a decrease in equipment revenues and T-Mobile USA branded customers resulting in voice revenue declines. However, service revenues increased by 0.4 percent year-on-year due to strong growth in data revenues from customers using smartphones with mobile broad- band data plans. The number of customers using 3G and 4G smartphones (which include UMTS/HSPA/HSPA+ enabled smartphones) was 9.1 million at the end of the first quarter of 2011, significantly higher than the 5.2 million at the end of the first quarter of 2010. Additionally, T-Mobile USA’s first quarter of 2011 total and service revenues benefitted from the launch of T-Mobile USA’s hand- set protection insurance program in the fourth quarter of 2010. EBITDA, adjusted EBITDA. EBITDA decreased year-on-year in the first quarter of 2011 by 14.3 percent to EUR 0.9 billion compared to EUR 1.0 billion in the first quarter of 2010. In U.S. dollars, EBITDA fell due to the decrease in revenues, as discussed above, com- bined with an increase in operating expenses. Operating expenses were higher year-on-year due primarily to increased retention expenses related to T-Mobile USA’s focus on building branded customer loyalty, and an increase in operating costs associated with the build out of the 4G HSPA+ network. Marketing and employee-related expenses were also higher year-on-year. Adjusted EBITDA of EUR 871 million excludes special factors of EUR 7 million in employee-related expenses associated with the pending AT&T acquisition.