Expenditure and investment in research and development

Research and development (R&D) expenditure includes pre-production research and development, such as the search for alternative products, processes, systems, and services. By contrast, we do not class as research and development expenditure the costs of developing system and user software which is designed to improve productivity and make our business processes more effective. R&D expenditure in the Deutsche Telekom Group amounted to EUR 84.1 million in 2016. As the parent company, Deutsche Telekom AG bears part of the Group’s research and development expenditure, the amount in this case being EUR 58 million (2015: EUR 86 million). However, this figure may not be viewed independently of the three-pronged innovation strategy referred to above – of in-house developments, innovations from outside the company and start-up funding and investments.

Our Group’s investments in internally generated intangible assets to be capitalized were also up year-on-year at EUR 129.5 million compared with EUR 101.3 million for the previous year. These investments predominantly relate to internally developed software, mainly in our Systems Solutions operating segment. About 2,900 employees worked in the Group’s R&D areas in 2016 (2015: approx. 2,800).

Expenditure and investment in research and development          
millions of €
  2016 2015 2014 2013 2012
Research and development expenditure 84.1 108.1 95.6 97.0 65.9
Investments in internally generated intangible assets to be capitalized 129.5 101.3 93.2 112.0 78.0