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T-Mobile: Record financial results Increasing scale, momentum and profitability

Bonn/London 10 March 2004   

T-Mobile Group: exceeding expectations

  • Customers up 13% to 61 million
  • Revenues up 15.4% to €22.8bn.
  • EBITDA up 32.4% to €6.7bn. EBITDA margin up 3.8% points to 29.3%
  • First positive operating income.€831m
  • 3G strategy integrates 2G, 3G and WiFi networks, tariffs, customer service

T-Mobile UK: record results

  • Customers up 9.6% to 13.6 million
  • Revenues up 18.5% to £3bn
  • EBITDA up 38% to £733m. EBITDA margin up 3.5% points to 24.6%
  • monthly ARPU up 15% from £18 to £21
    - contract £44, up 5%; pre-pay £13, up 12%
    - Non-Voice % of ARPU reaches 16%

As part of Deutsche Telekom's publication of its financial results for the year ended December 31, 2003, T-Mobile International today announced a year of record financial results.

Rene Obermann, Chief Executive of T-Mobile Group, said:

" T-Mobile has exceeded expectations in terms of customers, revenues, EBITDA and operating income.  At the heart of this is our constant focus on customer service,  innovation, value and the synergies we are gaining from operating as one company - sharing one vision, one brand and one strategy.  Coupled with improving efficiency, this translates into strong returns for customers and investors alike. 
 
" This year sees T-Mobile launch 3G, and we are confident of the returns we will achieve, again for customers and investors alike.  Our approach is distinctive — integrating 2G, 3G and WiFi networks, launching simple and seamless services, tariffs and customer service.  Our aim is simple, seamless communications."

Brian McBride, Managing Director T-Mobile UK, said:

" T-Mobile is the UK's fastest growing network.  We increased customers, including Virgin Mobile customers, by almost 10% to over 13.6 million.  We also strongly built our financials with total revenues up 18.5%, our average customer revenue increasing to  £21 a month and EBITDA up 38%.

" We are reaping the rewards of the innovation, services and service improvements, and substantial network investment made in the UK since we became part of the T-Mobile group at the end of 1999.  T-Mobile is now one of the UK's leading mobile operators and we intend to build on our momentum."

Attached are summary details on T-Mobile UK and T-Mobile Group.

Enquiries:  
   
Anthony Carlisle  Tel:                00 44 (0) 20 7638 9571
  T-Mobile:        00 44 (0) 7973 611 88
Elaine Devereux Tel:                00 44 (0) 20 8762 5046
  T-Mobile:        00 44 (0) 7950 396 249
T-Mobile Press Office    Tel :               00 44 (0) 7017 150 150
   
T-Mobile Group  
Philipp Schindera  Tel:                00 49 (0) 228 936 31717
DT Investor Relations Tel:                00 49 (0) 228 181 8880
   

T-Mobile Group

T-Mobile International produced strong growth with customers up 13% to 61 million in its owned and controlled operations.  Revenues grew faster, by 15.4% to €22.8 billion, reflecting growth in voice and non-voice services and increasing average customer revenue.  EBITDA was strongly up, by 32.4% to €6.7 billion, with the EBITDA margin up 3.8 percentage points to 29.3%.  Operating income was a positive €831 million.

At the CEBIT telecoms fair next week, T-Mobile will be announcing further details of its 3G strategy and launches, integrating 2G, 3G and WiFi networks, tariffs and customer service. 

T-Mobile UK

T-Mobile UK had a record year, with customers including Virgin Mobile up almost 10% to 13.6m and revenues up 18.5% to almost £3 billion, the fastest growth of all the major UK networks. EBITDA  was up 38% to over £733 million, also the most rapid growth of the UK networks, with the EBITDA margin up 3.5 percentage points to 24.6%. 

Growth was driven by a rising customer base and rising average customer spend (ARPU).

T-Mobile's UK customer base grew 9.6% to 13.636 million, despite a significant exercise in the first half to remove inactive prepay customers from reported numbers.  In the fourth quarter, T-Mobile was the fastest growing network adding some 1.25 million net new customers

T-Mobile UK's customer base remains largely pre-pay, split 2.684 million contract and 10.952 million prepay.  Net contract additions were the second highest in the industry at 436,000 for the full year and 161,000 in the fourth quarter. In pre-pay, T-Mobile was the clear growth leader with over 750,000 net additions.

ARPU grew significantly with contract ARPU up 5% to £44 a month and pre-pay ARPU up12% to £13 a month, significantly the highest pre-pay ARPU of the major operators in the UK.

Within this, non-voice revenues climbed strongly reaching some16% of ARPU, driven by growing adoption of multi-media services and strong SMS growth.  On an un-audited basis, T-Mobile UK has some1 million unique active data users a month; globally over 5.5million a month across the T-Mobile Group.

T-Mobile also leads the mobile industry in Wireless LAN (WiFi), with over 4,500 HotSpots across the group, and plans aggressively to expand this number as part of     T-Mobile's strategy to deliver integrated 3G and WiFi networks.

Wholesale is a key supporting element of T-Mobile  UK's strategy, helping leverage the network investment it has made since the end of 1999 and extend its customer reach.  T-Mobile has agreed a new long-term network supply agreement with Virgin Mobile and, last September, announced a network supply agreement to support BT's launch into mobile services for the residential market. 

T-Mobile International: Year ended December 31

€  million

  2001 2002 2003 % change 2003 / 02
Total revenue 14,637 19,735 22,778 15.4%
Net revenue 13,101 18,339 21,572 17,6%
Adj. EBITDA 3,137 5,038 6,671 32.4%
Adj. EBITDA margin 21.4% 25.5% 29.3% +3.8% points
Operating income -5,623 -23,574 +831  
         
Customers (Millions) 45.5 53.8 61.1 +13.2%
Employees ('000) 38.0 41.6 43.4 +4.3%

T-Mobile UK: Year ended December 31. 

£ million

  2001 2002 2003            % change '03 / 02
Total revenue 2.040 2.512 2.977 18.5%
EBITDA 334 531 733 38.0%
EBITDA margin 16,4% 21,1% 24,6% +3.5%
         
Customers * (Million) 10.422 12.446 13.636 +9.6%
ARPU-  contract                            -  pre-pay n.a. n.a.
n.a.
18 42
12
21 44
13
+16.66%
Employees ('000) 6.4 6.5 5.9 -9%

* Includes Virgin customer base

This press release contains forward-looking statements that reflect the current views of the Deutsche Telekom management with respect to future events. Forward-looking statements are based on current plans, estimates and projections, and therefore too much reliance should not be placed on them. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom's control, including those described in the sections " Forward-Looking Statements" and " Risk Factors" of the Form 20-F/A submitted to the U.S. Securities and Exchange Commission on June 27, 2003. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, Deutsche Telekom's actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom does not assume any obligation to update forward-looking statements to take new information or future events into account.

In addition to the figures shown in accordance with German GAAP, Deutsche Telekom also shows so-called pro forma figures, e.g., EBITDA, adjusted EBITDA, net debt, and free cash flow. These pro forma financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with German GAAP. For a definition of these pro forma figures, please refer to the explanations under " Reconciliation to pro forma figures" in the Group Report on the third quarter of 2003 and Deutsche Telekom's Investor Relations website at https://www.telekom.de.

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