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

9Interim Group management report This section provides additional information on and explains recent changes in the economic situation described in the combined management report for the 2010 financial year, focusing on global economic development, the outlook, the overall economic risks, and regulation. Global economic development. The global economy continued its upswing in the first three months of 2011, gaining momentum once more. The overall economic trend rallied not only in emerging economies in recent months, but in most industrialized nations, too. The growth pattern in our core countries is still uneven. The German and, since the end of the second half of 2010, U.S. economies are demonstrating strong and accelerating upturns. This contrasts with the countries in our Europe seg- ment, where development remained inconsistent in the first few months of 2011. Both a historical and a relative comparison generates the following pic- ture: Development in Poland and Austria is robust. The Netherlands, the Czech Republic, Hungary and Slovakia are growing moderately. Croatia and Romania are still in a difficult situation, but are showing the first signs of economic recov- ery. Greece is still in recession. Outlook. In their spring report, the institutes of the Joint Economic Forecast Project Group (Projektgruppe Gemeinschaftsdiagnose) revised their forecasts for development in 2011 and 2012. They predict that German GDP will grow by 2.8 percent in 2011 and by 2.0 percent in 2012. In the United States, increases of 3.0 percent and 2.8 percent are anticipated for the same years. For Greece, the Project Group is forecasting a decline of 3.2 percent in 2011 followed by a slight increase of 0.3 percent in 2012. It expects the GDP of countries in Central and Eastern Europe to rise by 3.0 percent in 2011 and by 3.5 percent in 2012. Overall economic risk. In addition to the risks facing the global economy as described in the 2010 Annual Report, the world is currently exposed to possible economic threats and the consequences resulting from the natural disaster and nuclear crisis in Japan, as well as the increase in oil prices precipitated by the political crises in North African and Arab countries. Basedonexperience,theinstitutesoftheJointEconomicForecastProject Group assume that the macroeconomic effects of natural disasters in industrialized countries are not serious. Although this event has far-reaching economic reper- cussions for Japan, the impact on the global economy is likely to be perceptible for a short time only. With regard to the rise in oil prices, the Project Group believes that it is not merely a reflex reaction to the supply bottlenecks caused by the political crises in North African and Arab countries, but that the most recent increase is more likely to be the result of an upturn in the global economy. Regulatory influence on Deutsche Telekom’s business. At the end of March 2011, the Federal Network Agency issued the regulatory order on unbundled local loop lines (ULLs). This essentially confirms the exist- ing obligations for unbundled access to ULLs. The obligation to provide access to the cable duct between the main distribution frame and the multi-functional street cabinet remains in force. The Federal Network Agency has also (re)im- posed an obligation to provide access to dark fiber for the section between the main distribution frame and the multi-functional street cabinet. However, this obligation only applies in the event that no cable duct capacity is available. As a supplementary requirement, the Federal Network Agency includes access to fiber-optic ULL purely in the current regulatory regime, though rates are subject to ex-post control. On March 31, 2011, the Federal Network Agency set the monthly rental for the ULL for the period from April 1, 2011 to June 30, 2013 as part of a provisional rate approval procedure. A charge of EUR 10.08 (previously: EUR 10.20, rate applied for: EUR 12.90) was approved for the most important subscriber line option – the copper wire pair. This constitutes a reduction of 1.18 percent. A rate of EUR 7.17 per month was set for the ULLs to which access is provided at a feeder distribution interface – a decrease of 0.55 percent compared with the previous rate of EUR 7.21. The rate applied for was EUR 9.58 a month. Initially, the rates have merely been approved on a provisional basis because the draft resolution has yet to be discussed as part of consultation procedures at both national and EU level and changes may arise in the course of this process. A final decision is currently expected to be reached by the end of June 2011. Interim Group management report. The economic environment.