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

33Interim Group management report Deutsche Telekom. Interim Group Report 9M 2015. RISKS AND OPPORTUNITIES This section provides important additional information and explains recent changes in the risks and opportunities as described in the combined manage- ment report for the 2014 financial year (2014 Annual Report, page 146 et seq.). Readers are also referred to the Disclaimer at the end of this report. ECONOMIC RISKS, EUROPE The political situation in Greece has stabilized following the fundamental agreement between the European institutions and the Greek government. A Greek exit from the eurozone was avoided. Furthermore, the stability of the Greek government increased following new elections in September 2015. However, the adopted reform implementation program still poses an economic risk, for example from the increase in VAT and the corporate and real estate tax rates, since these go hand in hand with a reduction in disposable or investable income. LITIGATION Toll Collect arbitration proceedings. In the Toll Collect arbitration pro­ ceedings, a further hearing took place in June 2015, which will continue in January 2016. Deutsche Telekom has recognized appropriate provisions for risks in the statement of financial position since 2014. Claims for damages concerning the provision of subscriber data. The Federal Court of Justice rejected Dr. Harischʼs complaint against non- allowance of appeal in a ruling dated April 14, 2015. The claim of approxi- mately EUR 612 million plus interest has therefore been dismissed with final and binding effect. In the appeal proceedings brought by telegate AG in relation to its claim for damages of approximately EUR 86 million plus interest, the Düsseldorf Higher Regional Court dismissed telegate AGʼs appeal in a ruling dated April 22, 2015 and disallowed a further appeal. telegate AG filed a complaint against the non-allowance of appeal with the Federal Court of Justice in May 2015. Claims by partnering publishers of telephone directories. In February and March 2015, the Frankfurt/Main Regional Court dismissed another 20 claims by partnering publishers of telephone directories. This brings the number of claims dismissed in the first instance to 22 out of 81. Two of these rulings have in the meantime become final and legally binding. The complainants have filed appeals against the other rulings with the Frankfurt Higher Regional Court. The remaining amount in dispute now totals approximately EUR 467 million plus interest. Deutsche Telekom AG, DeTeMedien GmbH and the majority of the partnering publishers of telephone directories concluded an agreement tosettletheirdisputesonOctober22,2015.DeutscheTelekomhasrecognized appropriateprovisionsforrisksinthestatementoffinancialpositionsince2014. Claims for damages due to price squeeze. In the proceedings brought by EWE Tel GmbH against Telekom Deutschland GmbH, the Düsseldorf Higher Regional Court, in its ruling dated January 29, 2014, overturned the first-instance ruling of the Cologne Regional Court dated January 17, 2013, especially with regard to the extent of the claims barred under the statute of limitations, and referred the case back to the Cologne Regional Court disallowing any appeal due to the amount of the damages. In a ruling dated June 16, 2015, the Federal Court of Justice rejected the complaints lodged by the parties against the non-allowance of appeal. In October 2015, the parties concluded an agreement to settle the dispute. Auction of LTE frequencies. In 2010, the Federal Network Agency auctioned off additional frequencies in the 0.8 GHz, 1.8 GHz, 2.0 GHz and 2.6 GHz ranges, with all four German mobile network operators participating in the auction. Several companies appealed against the rulings of the Federal Network Agency with regard to the auction. The decision of the Cologne Administrative Court on September 3, 2014 to dismiss the recently pending action brought by a telecommunications company, is now final and legally binding. Reduction of the Companyʼs contribution to the civil service pension of the former Deutsche Bundespost. In the ruling dated October 2, 2015, the competent administrative court dismissed the claim of Deutsche Telekom AG for a reduction in the payment obligation and allowed for appeal. PROCEEDINGS CONCLUDED IN 2015 Claim for compensation against Slovak Telekom. In March 2015, the parties agreed on a settlement of the dispute. The settled dispute concerned the lawsuit filed against Slovak Telekom based on the accusation that the legal predecessor of Slovak Telekom had ceased broadcast of an international radio program contrary to the underlying contract. The settlement was confirmed by the responsible court in Bratislava in May 2015; the proceedings are therefore terminated with final and binding effect. In July 2015, Deutsche Telekom was able to realize its contractual claims to a refund of the amount paid by Slovak Telekom for the settlement, in accordance with the amount of its shareholding in Slovak Telekom at the time. ANTI-TRUST PROCEEDINGS Claims for damages against Slovak Telekom following the European Commissionʼs decision to impose fines. Following the European Commis- sionʼs decision of October 15, 2014 to impose fines, both Orange Slovensko and SWAN filed action against Slovak Telekom with the civil court in Bratislava in August 2015, claiming compensation for damages of EUR 232 million and EUR 50 million respectively, plus interest. These claims seek compensation for damages alleged to have been incurred through Slovak Telekomʼs abuse of its dominant market position, as determined by the EU Commission. Both Slovak Telekom and Deutsche Telekom appealed against the decision before theCourtoftheEuropeanUnioninDecember2014.SlovakTelekomiscurrently examining the merits of the claims. It is currently not possible to estimate the potential financial impact with sufficient certainty. REGULATION As part of a strategy for the digital single market, the European Commission announced its upcoming European regulation initiatives in early May 2015. These include, for example, a complete reworking of the applicable EU legal framework for telecommunications, introduced in fall of this year with a public consultation. The process comprises a review of the current ex-ante regulation for network access, a reform of service regulation whose aims include more equal treatment of telecommunications services and Internet- based (communications) services, as well as a renewed initiative to create a more harmonized framework for the awarding of mobile spectrum. Further- more, the Commission announced a review of the role of Internet platforms in the digital economy with a view to potential legislative measures. The review is set to begin at the end of 2015. All these initiatives offer the opportunity to achieve more balanced competitive conditions between telecommunications and Internet companies in the area of regulation. It is not possible at present to conclusively assess the specific opportunities and risks arising from these initiatives.

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