The strategic business areas of the Deutsche Telekom Group.

Broadband/Fixed Network
Consistent development of the promising broadband business. The Broadband/Fixed Network strategic business area consists of T-Com and T-Online. It provides consumers and very small business customers with state-of-the art fixed-network infrastructures, broadband Internet access, and up-to-date multimedia services. T-Com was successful in increasing its T-DSL customer base while T-Online succeeded in positioning itself on the market as a full-service DSL provider. The Excellence Program’s Re-Invent initiative pushes innovativeness, promotes service orientation and opens up new dimensions in performance to make the business area fit to face future challenges.

Mobile Communications
On a clear course for success with efficiency in both the national and international arenas. T-Mobile International, Deutsche Telekom’s mobile communications arm, increased its customer base and revenue significantly in the 2005 financial year. Long-term efficiency and growth programs launched as part of the Save for Growth initiative continue to drive the company forwards in a difficult market. Thanks to expansion of the mobile broadband network and improvements in customer service, the company once again improved its customer loyalty rating. In addition, T-Mobile is rigorously pushing evolution of innovative application areas and has set its sights on attaining clear leadership in mobile broadband services.

Business Customers
Strong positioning in highly competitive markets. T-Systems has a successful track record of serving Deutsche Telekom’s business customers, and providing them with customized solutions that combine telecommunications and information technologies. In the 2005 financial year, the company increased its EBIT and stabilized revenue. With Focus on Growth, T-Systems launched its program for profitable growth and thus set itself clear goals in the business customer market. Customer projects for multinational corporations and SMEs make the company fit for future tasks.

Group Headquarters & Shared Services
Facilitating cooperation along the lines of an intelligently integrated group of companies. The various units at Group Headquarters and Shared Services are the drivers of profitability and cost-effectiveness at Deutsche Telekom. The segment performs strategic management functions across the business areas – tasks that are vitally important in an integrated group. The Shared Services unit comprises in particular Vivento, Real Estate Services, and DeTeFleetServices GmbH – the full-service provider of fleet management and mobility services. Its key functions also include managing the Group-wide Excellence Program that brings together all the projects important to the Deutsche Telekom Group.

^a Calculated on the basis of millions for the purpose of greater precision. Changes to percentages expressed as percentage points.
^b Deutsche Telekom defines EBITDA as profit/loss from operations before depreciation, amortization and impairment losses.
^c EBITDA, EBITDA adjusted for special factors, net debt, and free cash flow are non-GAAP figures not governed by the International Financial Reporting Standards (IFRS) or U.S. Generally Accepted Accounting Principles (U.S. GAAP). They should not be viewed in isolation as an alternative to profit or loss from operations, net profit or loss, net cash from operating activities, the debt reported in the consolidated balance sheet, or other Deutsche Telekom key performance indicators presented in accordance with IFRS or U.S. GAAP. For detailed information and calculations, please refer to the “Development of business” section of the Group management report in this Annual Report.
^d Cash outflows for investments in intangible assets (excluding goodwill) and property, plant and equipment (in accordance with the cash flow statement).