DEUTSCHe telekom Company Presentation

DEUTSCHe telekom Company Presentation

DEUTSCHE TELEKOM PROFILE Customers & Markets Facts & Figures Customers 156 m mobile customers 29 m fixed-network customers/ 18 m broadband customers Approx. 6.6 m TV customers Some 1.6 m managed workplace systems Markets Present in 50 countries Germany, Europe and the USA: with own infrastructure T-Systems: global presence & alliances via partners Telekom in figures, 2015 Revenue 69.2 bn Adjusted EBITDA 19.9 bn Free Cash-Flow 4.5 bn Employees & responsibility Employees worldwide: 225,000 8,600 trainees and cooperative degree students in Germany Pioneer of social issues (climate protection, data privacy, diversity, etc.) Source: DT 2015 annual report/tmus annual report to shareholders 2015 2

GERMANY 40 million mobile customers Biggest (V) DSL provider in Germany 12.6 million broadband lines 2.7 million IPTV customers incl. satellite 22.4 billion revenue 8.8 billion EBITDA 68,638 employees 110,354 employees in Germany overall Financial figures taken from DT's 2015 annual report 3

Europe & United states T-Mobile US: 63.3 million mobile customers USD 32.07 million revenue USD 7.36 million EBITDA 44,229 employees Financial figures taken from DT's 2014 annual report/tmus' annual report to shareholders 2014 Europe: Present in 13 countries 52.2 million mobile customers 5 million broadband lines 3.9 million IPTV, satellite, cable customers iphone in all European markets 12.7 billion revenue 4.3 billion EBITDA 49,638 employees Direct shareholdings 4

T-SYSTEMS Information technology and telecommunications services in all industries: automotive, finance, transport, retail & public sector Pioneer in cloud computing Corporate customers, multinational corporations & public sector 8.6 billion revenue 0.8 billion EBITDA 46,000 employees Financial figures taken from DT's 2015 annual report 5

Changing industry s paradigms internet of things convergence self-service sharing mix and match individualization simplicity convenience apps synchronity digitization open platforms Industry 4.0 interoperability data is the resource two-sided business model OTT data analytics virtualization bandwidth All-IP coverage modularization softwarization stability reliability hybrid networks LTE connected data platforms ecosystem data analytics network effects freemium 6

Technology trends convergence & virtualization SOFTWARIZATION VIRTUALIZATION CONVERGENCE DATA ANALYTICS Software defined networks Network function virtualization Hybrid Modern in-memory platform Service Programming Control & Automation Service A Control & Automation Service B Cloud Infrastructure Fixed net for base load and stability + mobile net for additional bandwidth Transact & analyze data in real-time Low-cost open source platform Batch process/archive infinite amounts of data Common IP Layer Commodity Hardware Replacing consumer hardware Faster Time-to-Market Heterogeneous networks SAP HANA HADOOP Higher elasticity Instant Results Infinite Storage Higher redundancy esim virtual set-top box Independence from hardware micro cell macro cell pico cell Real time business results from big data 7

Business model trends OTT disruption TELCO BUSINESS MODEL Usage-based monetization Transport and protection of user data 5 Asset-heavy network invest Open 4 platforms 1 3 Interoperable standards Regulated market 2 PREMIUM SERVICE Scale for utilization DISRUPTION OTT BUSINESS MODEL Asset-light portfolio extension FREEMIUM SERVICE Scale for Reach 5 Closed 1 platforms 4 2 De-facto standards Unregulated market 3 Ad-based monetization Exploitation of user data 8

Our strategy LEADING EUROPEAN TELCO INTEGRATED IP NETWORKS BEST CUSTOMER EXPERIENCE WIN WITH PARTNERS LEAD IN BUSINESS TRANSFORM PORTFOLIO EVOLVE FINANCIAL TARGETS & EFFICIENCY ENCOURAGE LEADERSHIP & PERFORMANCE DEVELOPMENT 9

INTEGRATED IP NETWORKS All-IP Transformation Pan-European Network Integrated network strategy 1 LTE rollout 2 Fiber 3 Vectoring PAN NET 4 Hybrid Access Device Hybrid LTE DSL Shift to IP-Platform until 2018 DT Technology leader European production model on IP-Basis Build out of modern infrastructures: LTE, Fiber/Vectoring etc. 10

INTEGRATED NETWORK STRATEGY Infrastructure 1 LTE Roll-Out + 2 OPTICAL FIBER + 3 Vectoring + 4 Hybrid Access LTE Roll-Out D: 95% LTE PoP-coverage 1 in 2018 with up to 300 MBit/s EU: 75 95% 2 LTE-PoP-coverage in 2018 with up to 300 MBit/s Vectoring D: Introduction of super vectoring with more than 250 Mbps in cable footprint Optical Fiber D: Glass Fiber household footprint of 80% in 2018 with at least 50 MBit/s depending on regulatory adjustments EU: 50% of households 3 with at least 100 MBit/s in 2018, 12% of households 3 with up to 500 MBit/s 4 in 2018 HyBrid Access D: Download speed of up to 550 Mbps via hybrid in cable footprint Device Hybrid LTE DSL Hybrid Router 1) Outdoor coverage 2) Depending on country 3) In integrated footprint 4) FTTH, FTTB, FTTC, cable/ed3 (cable, esp. in Hungary with Euro-DOCSIS) 11

Our seamless high performing network TECHNOLOGY LEADERSHIP Target picture: Integrated Mobile only SUPERIOR SPEED AND COVERAGE SEAMLESS ACCESS We push a highly competitive fiber based infrastructure and at the same time stick to our capex envelope! 95% LTE pop-coverage 1 in 2018 with up to 300 Mbps Fiber household footprint of 80% in 2018 with at least 50 Mbps depending on regulatory adjustments Introduction of super vectoring with more than 250 Mbps in cable footprint Download speed of up to 550 Mbps via hybrid in cable footprint 264,000 hotspots and 2,000 small cells in 2018 to boost mobile capacity & indoor coverage 75 95% 2 LTE pop-coverage in 2018 with up to 300 Mbps 50% of households 3 with at least 100 Mbps in 2018 12% of households 3 with up to 500 Mbps 4 in 2018 1.6 mn hotspots in 2018 5 1) Outdoor coverage 2) Depending on country 3) In integrated footprint 4) FTTH, FTTB, FTTC, cable/ed3 (cable, esp. in Hungary with Euro-DOCSIS) 5) Including FON 12

PARTNER SERVICES & PLATFORMS Platforms & partnerships for innovative services 4 1 3 2 Media distribution Partner services for infrastructure Connected home Internet and product partnerships Machine-to-machine communication BusinessMarketplace Access/voice services/ network service Partner for business customers 14

Partnering strengthens our customer proposition WIN-WIN-WIN THROUGH PARTNERING ACHIEVEMENTS AND AMBITION OF PARTNERING 6 CUSTOMERS One-stop shopping Integrated proposition Best digital products Subscriber (mn.) 2.3 2014 2018 300 Revenue ( mn.) 100 2014 2018 PARTNER Product reach Technical enablement Additional revenues DT Platform scale Loyalty boost Additional revenues Partner vs. make Subscriber (mn.) 1.7 6 2014 2018 15

Innovation drives future differentiation INTEGRATED IP NETWORKS BEST CUSTOMER EXPERIENCE WIN WITH PARTNERS LEAD IN BUSINESS INNOVATION @ DT...... is leading edge: e.g. Hybrid, Super-Vectoring, Qivicon... happens on all levels: networks, processes, platforms, tariffs and products... considers today s and anticipates future customer demands... is efficient and effective: focused make vs. partner decisions PAN-Net/NG-/All-IP QoS Hybrid/WiFi 5G Virtualization (SDN/NFV) Super-Vectoring G.fast Carrier Aggregation/ MIMO 300 Mbit/s Communication Security Wearables etransformation MagentaEINS/ FMC Plus/ FMCC Smart Home/Qivicon NGTV Payment Ecosystem Management esim Steckerleiste Strategic Partners M2M Cloud Verticals Advanced Data Analytics Open and interoperable platforms Accentuated: Innovation in adjacent businesses 16

FOCUS ON INNOVATION NEW IDEAS COME FROM IN-HOUSE DEVELOPMENTS & PARTNERS innovation: VITAL TO SUCCESS! In-house developments Partnerships & cooperation Start-up backing & shareholdings DeutschlandLAN MyPhonebook IPTV Programm Manager HomeTalk app Railne HotSpot-finder Customer Center App Entertain Photo share app Inflight Digital Business Unit T-Labs T-Systems Innovation Center T-Venture Hubraum 17

WHAT ABD IS SCOUTING FOR Complementing Trend Setters Game Changers Co-opetitors Disruptors 18

Research Axes and priorities OBJECTIVE KEY CRITERIA / COMPANY PROFILE TECHNOLOGY DOMAINS (exemplary only) Identify new actors from the ICT and Network Technology area with the ability to help Deutsche Telekom address existing and future technology challenges through innovative solutions Innovative and/or disruptive solutions with direct application in DT s networks; excluded are consulting firms or service companies Network technology solutions based on widely accepted industry standards Proven references in the Telecommunication domain through existing or past projects with other operator companies worldwide International presence or expansion plans in DT s footprint, ideally with existing business implementation plan in one or more of the corresponding countries Infrastructure optimisation : cloudification, virtualisation, SDN/NFV innovators,... Traffic management and optimisation : voice, video, data monetisation, broadcast, hotspots, «Internet of Things» : Network connectivity, sensor devices, domotics, car communication, Service orchestration: Real-time OSS, Next-Generation OSS, Network security : cybersecurity, redundancy, encryption, honeypot, 19

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