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Deutsche Telekom AG - Interim Group report - January 1 to March 31, 2012

7To our shareholders Highlights in the first quarter of 2012. In the first quarter of the year, stock markets around the world recovered well from the slump in 2011. The DAX 30 gained 14 percent. Thanks to capital injec- tions of around one trillion euros from the European Central Bank, the markets were jump-started primarily by the banks that had been weak in the previous year and by economically sensitive securities. In February in particular, share prices on the international equities markets rose, prompted not only by the economic trend toward greater stabilization of economic activity, but also by lessening concerns about Greece following agreement on a EUR 130 billion aid package. Developments at senior management level. On February 22, 2012, the Super- visory Board of Deutsche Telekom appointed Dr. Thomas Kremer as member of the Board of Management responsible for Data Privacy, Legal Affairs and Compliance. He will succeed Dr. Manfred Balz effective June 1, 2012. Corporate transactions. The sale of the stake in Telekom Srbija was com- pleted on January 25, 2012. For more details on this transaction, please refer to the combined management report for the 2011 financial year (2011 Annual Report, page 147). Issuances. We took advantage of the relatively positive capital market environment in the first quarter of 2012 for issuances at very favorable financ- ing conditions. Among other transactions, we issued a U.S. dollar bond (first tranche: USD 1 billion, coupon 2.25 percent, maturity 5 years; second tranche: USD 1 billion, coupon 4.875 percent, maturity 30 years) on March 6, 2012. With this transaction, we achieved better conditions than were available for bonds on the euro market with comparable maturities. Partnerships.WehavesignedanetworkpartnershipwithTelefónicaGermany for the shared use of parts of the Deutsche Telekom network infrastructure. In order to accelerate growth in the area of mobile location-based services, we concluded a strategic partnership with Groupon. By increasing our equity investment in the IT service provider HMM Deutschland, we are further ex- panding our healthcare business area, for example, driving forward the digital data flow between health insurance companies, pharmacies, and medical supply stores. Investments in networks and new spectrum. In Germany, we have already met the LTE roll-out obligations in 11 of the 16 federal states. In Hungary and Croatia, we are the first company to provide mobile Internet services based on 4G/LTE mobile communications technology. We also purchased spectrum in the 0.9 GHz frequency range in Hungary. In February 2012, T-Mobile USA an- nounced it will invest USD 4 billion in total over time into network moderni­zation and LTE deployment to strengthen its 4G network. Re-using the existing spec- trum (re-farming), combined with the AWS spectrum T-Mobile USA received in April 2012 from AT&T, will allow the deployment of LTE service in 2013. Over the next two years, this represents approximately USD 1.4 billion in incremental network investment. Litigation. Two court cases developed in our favor during this quarter. (“Claim for compensation against the Federal Republic of Germany and Kreditanstalt für Wiederaufbau” as well as “Year-end bonus for civil servants”). For more details, please refer to “Risks and opportunities” (pages 25 and 26). T-Systems signs new contracts. T-Systems has concluded one of the largest cloud deals in its history with the British American Tobacco (BAT) group. Under the contract with a seven-year term, it will migrate the BAT’s business software into the cloud over the next two years. Insurance group Old Mutual and T-Systems signed an outsourcing deal in South Africa under which T-Systems will provide computing power, storage space and workstation support for Old Mutual for the next seven years. Employees. We revised our early retirement arrangements for civil servants and are offering a limited number of our civil servants an early retirement pro- gram up to the end of 2012. Payments will be spread over the next six to seven years.Intheongoing2012collectivewagebargainingforDeutscheTelekom AG, TelekomDeutschlandGmbH,anditsservicecompaniesaswellasforT-Systems, the parties already reached some agreements with the union Verdi in April and May 2012. For further information, please refer to the disclosure under “Events after the reporting period” in the interim consolidated financial statements (page 36).