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

15Interim Group management report Results of operations of the Group. Net revenue. In the first nine months of the 2011 financial year, we generated net revenue from continuing operations of EUR 32.8 billion, a decrease of EUR 2.0 billion or 5.8 percent compared with the first nine months of 2010. The change in the composition of the Group described above resulting from the deconsolidation of T-Mobile UK had a negative effect of EUR 0.8 billion on this development. Exchange rate effects did not have any significant impact on net revenue from continuing operations. Excluding these effects, net revenue from continuing operations decreased by EUR 1.3 billion or 3.8 percent. The Systems Solutions operating segment increased its revenue, whereas all others recorded decreases. Revenue in the operating segments developed as follows: Revenue in our Germany operating segment was down 3.8 percent compared with the first nine months of 2010 at EUR 18.0 billion. This was mainly due to declining revenues from voice telephony in both mobile communications and the fixed network. Adjusted for the price effects of regulatory decisions, the discontinuation of trade with mobile prepaid cards of other carriers, which was stopped as part of the measures for value-driven growth, we reduced the year-on-year decline in our revenue to 2.3 percent. The decline in revenue was partially offset by growing demand for complete packages with mobile data and TV rate plans, and the positive trend in smartphone revenue. In the first nine months of 2011, the Europe operating segment generated revenue of EUR 11.4 billion, a decrease of 12.2 percent compared with the prior-year period. Half of this decline was attributable to the deconsolidation of T-Mobile UK effective April 1, 2010. In addition, the special tax introduced in Hungary had an adverse effect on segment revenue. Excluding the afore- mentioned effects and adjusted for the slightly positive exchange rate effects, revenue decreased by only 6.3 percent. This decline was primarily caused by the price erosion in almost all European countries. Price reductions were firstly the result of lower mobile termination rates imposed by regulation, and secondly highly intense competition had a negative impact on revenue. The difficult macroeconomic situation in the countries of Southern and Eastern Europe in particular had a considerable impact on total revenue. The negative effects were in part offset by encouraging revenue growth in the fixed-network business, primarily in broadband/TV, and wholesale. In addition, strong mobile data revenue growth had a positive impact. At EUR 11.0 billion, revenue in our United States operating segment was down 9.7 percent compared with the first three quarters of 2010. Exchange rate effects from the translation from U.S. dollars in particular had a negative effect on the revenue trend on euro basis. On a U.S. dollar basis, revenue declined by 3.3 percent, due primarily to a decrease in equipment revenues and due to fewer T-Mobile USA branded customers, which resulted in service revenue declines. The decrease in service revenues from voice services was partially offset by continued strong growth in data revenue with customers using smartphones with mobile broadband data plans. Additionally, T-Mobile USA’s first nine months of 2011 total revenues were impacted by lower equipment revenues from decreased volumes and only partially offset by T-Mobile USA benefiting from the launch of its handset protection insurance program in the fourth quarter of 2010. Revenue in our Systems Solutions operating segment stood at EUR 6.8 billion in the first three quarters of 2011, an increase of EUR 0.2 billion or 3.3 percent compared with the prior-year period. This increase is partly attributable to deals secured with E.ON and Deutsche Post DHL in the prior year as well as contracts signed with companies such as Everything Everywhere, Magna and TOTAL in 2011. The new deals offset the general negative price trend in IT and communi- cations.