Development of business at
Deutsche Telekom AG

Deutsche Telekom AG prepares its annual financial statements in accordance with the principles of German GAAP, as specified in the German Commercial Code (Handelsgesetzbuch – HGB) and the German Stock Corporation Act (Aktiengesetz – AktG).

As the Headquarters of the Deutsche Telekom Group, we perform strategic and cross-segment management functions and provide services for other Group companies. The profits and losses of our subsidiaries and Group financing measures have a material effect on our financial position and results of operations. In our home market, there was a slight upward trend in revenue. This was partly due to a rise in mobile revenues and, in particular, in non-contract handset business. Increased IT and broadband revenues also had a positive impact on fixed-network revenue, although it was not sufficient to offset the overall decline in revenue in the fixed-network business. In our Systems Solutions operating segment, business was negatively affected by the continued decrease in revenues from the traditional IT business, characterized by a general downward trend in prices in the market as well as a decline in order entry. A positive revenue trend in our growth areas and an increase in terminal equipment revenue, but also lower roaming charges and ongoing intense competition impacted on the Europe operating segment in 2017.

Deutsche Telekom AG reported income after taxes for the 2017 financial year of EUR 4.9 billion. In addition to the operating business, the development of business in the reporting year was influenced by a number of very different factors, including the intragroup restructuring within the DFMG group, the reversal of a write-down (indirect stake held in T-Mobile US, Inc., Bellevue) as well as a write-down at T-Mobile Global Zwischenholding GmbH, Bonn (indirect stake held in the BT Group plc, London), and a write-down of the carrying amount for the investment in T-Systems International GmbH, Frankfurt/Main, arising from both the company’s own business and from income related to subsidiaries, associated and related companies.