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Deutsche Telekom AG - Interim Group report - January 1 to September 30, 2011

11Interim Group management report Build networks and processes for the gigabit society. We are forecasting a rapid increase in global data volumes in the coming years. Our goal is therefore to continue to transform operations by becoming more efficient, but also by supplying the greater bandwidth required. For this reason, we are focusing on: −− rolling out the fiber-optic networks and enhancing the mobile communications networks by pushing HSPA+ and LTE −− systematically implementing the all-IP concept −− increasing the speed and flexibility of the IT factory −− systematically expanding key enabling skills. We have already started out on the path to achieving these goals. We pur- chased additional mobile frequency spectrum in several countries, including Germany, the Netherlands, Austria, and Albania. We have made further prog- ress with our network upgrade and put a large number of additional UMTS sites into operation in Germany. In many other countries, we are also continuing to upgrade our UMTS network with high-speed HSPA+ technology. On top of this, we have started to roll out the LTE network in several countries. All in all, we have upgraded around 800 base stations in Germany with LTE technology since 2010. We are also expanding our networks on the fixed-network side. Our billion-euro investments ensure that more and more households will be covered by fast broadband lines. Put into figures: We have marketed more than 12 million broad- band lines in Germany, which makes us market leader. On top of this, more than 520,000 customers have opted for a VDSL line from Deutsche Telekom. Connected life across all screens. One strategic goal is the provision of innovative, non-device-specific and con- vergent services. In our view, the greatest opportunities for growth lie in making data services mobile, particularly on the mobile Internet. We are developing and marketing our own key solutions for connected life, such as innovative communication services centered around the personalized, network-based address book that we have successfully launched on the market in six countries (e.g., myPhonebook in Germany). Needless to say, we also place a great deal of emphasis on ensuring that our customers have attractive handsets. Sales of smartphones have remained strong. Sixty-one percent of all handsets sold in Germany in the first nine months of 2011 were smartphones. Deutsche Telekom is also positioning itself as a pioneer for digital content, by linking and distributing personalized media content. We have made selected acquisitions (e.g., ClickandBuy and STRATO), all of which are valuable addi- tions to Deutsche Telekom’s portfolio in the high-growth Internet business. Our prominent position in the European TV market is yet another success factor. In 2011, the number of Entertain customers in Germany increased to 1.4 million, a plus of 16.7 percent since the end of 2010. Our TV customer base in Southern and Eastern European markets has increased to 2.6 million. Connected work with unique ICT solutions. Deutsche Telekom provides customized ICT solutions for business customers and draws on the services of T-Systems in the ongoing standardization of its internal IT solutions. In pursuit of this task, T-Systems will continue to be re- structured and its profitability raised to industry level. T-Systems succeeded in increasing its external revenue from IT services in the first three quarters of 2011. We have developed intelligent, innovative offerings centering around secure cloud services that our business customers like to use. We are positioning T-Systems as an open partner, also for other sectors, with the aim of leveraging growth opportunities for ICT solutions in sectors that are undergoing major changes. As part of this initiative, we have created four new business areas for developing intelligent network solutions: energy, healthcare, media distribution, and the connected car. These also got off to a good start. In the energy business area we additionally entered into a deal with the meter operator VOLTARIS for the recording, transmission, and processing of energy data as well as the trialing of sales of smart electricity meters and green power rates from E.ON in more than 50 Telekom shops. In the business area of connected cars, we joined forces with Continental to develop an open, flexible, and future-proof infotainment concept for connected vehicles.