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Deutsche Telekom AG - Interim Group report - January 1 to September 30, 2015

18 Interim Group management report Deutsche Telekom. Interim Group Report 9M 2015. Total In Germany, we defended our position as market leader in the fixed network and in mobile communications in terms of service revenues. This success is attributable to our high-performance networks. We offer best customer experience with multi-award-winning network quality – in the fixed network as in mobile communications – and with a broad product portfolio. In September 2014, we launched MagentaEINS – our first integrated product comprising fixed-network and mobile components, for which we have won 1.6 million customers so far. With our “network of the future,” we provide state-of-the-art connection technology. By 2018, we want to convert our entire network to IP technology. To date, we have migrated 8.6 million retail and wholesale lines to IP, which corresponds to a migration rate of 37 percent. Inmobilecommunications,wewonanother1,060thousandcontractcustomers in the first three quarters of 2015. There was a positive development in the contract customer base in the consumer and also in the business customer segment, thanks to demand for integrated mobile rate plans with data volumes. We continued to record strong demand for our fiber-optic products: For example, the number of these lines rose by 1,318 thousand in the first three quarters of 2015 to a total of 3.8 million. With the progress in fiber-optic roll- out and innovative vectoring technology, we will drive forward the marketing of substantially higher bandwidths. With our contingent model and its future refinement, we are creating incentives for the migration from traditional whole- sale products – such as bundled wholesale lines or unbundled local loop lines (ULLs) – to higher-quality fiber-optic wholesale lines. Our partnerships in the housing sector were also successful: Around 136 thousand apartments were connected to our network in total, 17 thousand of them in the first nine months of 2015. Mobile communications Mobile telephony and data services. Our excellent network quality and the new product portfolio for high-value contract customers and new customers provide fresh impetus. Since the end of 2014, we have won a total of 1,060 thousand new contract customers. We recorded 459 thousand branded contract customer additions under the Telekom and “congstar” brands. At the end of the third quarter of 2015, Telekom Deutschland Multibrand GmbH, which was established on January 15, 2015 and entails the marketing partnership for the use of the Turkcell brand in Germany, reported 339 thousand mobile customers. The reseller business (service providers) recorded just 262 thousand net additions, as Turkcell customers had been transferred to Telekom Deutschland Multibrand GmbH in the first quarter of 2015. This entailed a transfer of Turkcell customers from the prepay to the contract customer segment. The number of prepay customers decreased by 156 thousand since the end of 2014, though the growth in business customers partly compensated for the significant loss in the number of consumers. With 903 thousand mobile customer net additions in the first three quarters of 2015, growth in contract customers more than offset the decline in prepay customers. A total of 270 thousand customers used a mobile broadband connection. Smartphones accounted for 81.5 percent of mobile devices. They were primarily Android and iOS devices (iPhones) – with high-priced devices in particular demand. Fixed network Telephony, Internet, and television. Due to the persistently challenging development in the fixed-network market, primarily owing to aggressive pricing offers of competitors, we are pursuing new paths in marketing with integrated offers and a focus on television and fiber-optic lines. The success bears us out: The number of broadband lines increased by 235 thousand compared with the end of 2014. In total, 20.9 percent of our broadband customers are television customers, an increase of 1.1 percentage points compared with December 31, 2014. In the traditional fixed network, the number of lines decreased by 332 thousand. In terms of line losses per quarter, the overall trend is positive. We have been marketing the MagentaZuhause rate plans, our new product portfolio for the fixed network based on IP technology and rate plan- specific bandwidths, since October 2014. A total of 109 thousand customers, the majority of whom live in rural areas, have already sub­- scribed to MagentaZuhause Hybrid, our new product launched in Germany in March 2015 which combines fixed-network and mobile technology in a single router.

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