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

4 To our shareholders. Developments in the Group. Net revenue including revenues from discontinued operations (United States). (billions of €) Q1 2010 Q1 2011 12.0 0.8 T-Mobile UK 3.8 10.8 3.8 14.6 15.8 n Net revenue from continuing operations decreased by 9.8 percent compared with the first quarter of 2010. Excluding T-Mobile UK, net revenue decreased by EUR 0.4 billion or 3.7 percent. n Operations were positively impacted by the development of mobile data revenue and the increase in revenue from Systems Solutions as a result of new deals. n Operations were negatively impacted by line losses in the fixed network, price changes imposed by regulation, the difficult overall economic situation in some countries, and price cuts in response to intense competitive pressure. Proportion of net revenue generated internationally. (%) including United Statesexcluding United States 60.7 39.3 45.055.0 n The proportion of net revenue from continuing operations generated outside Germany fell to 39.3 percent. n Domestic net revenue amounted to EUR 6.6 billion, EUR 0.2 billion less than in the first quarter of 2010. International net revenue decreased by 19.2 percent or EUR 1.0 billion year-on-year. n The decline in international net revenue is primarily attributable to the establish- ment of the Everything Everywhere joint venture in the United Kingdom. T-Mobile UK has no longer been fully consolidated since April 1, 2010. Adjusted EBITDA including adjusted EBITDA from discontinued operations (United States). (billions of €) 0.2 T-Mobile UK Q1 2010 Q1 2011 3.9 1.0 3.6 0.9 4.5 4.9 n Adjusted EBITDA decreased by EUR 0.3 billion compared with the first quarter of the prior year. Excluding T-Mobile UK, adjusted EBITDA decreased by EUR 0.1 billion or 2.7 percent. n Fixed-network lines lost to competitors, price changes imposed by regulation, and newly imposed or raised special taxes on telecommunications services had a negative impact on adjusted EBITDA. n Cost management and the Save for Service program only partly offset these effects. Free cash flow (before dividend payments, spectrum investment and PTC transaction). (billions of €) Q1 2010 Q1 2011 1.4 1.1 n Free cash flow decreased by EUR 0.4 billion to EUR 1.1 billion. n Cash inflows from dividends received were offset by the lower year-on-year level of receivables sold (factoring) and higher interest payments. Domestic International USA Continuing operations USA Continuing operations