Deutsche Telekom AG

ots Ad hoc-Service: Deutsche Telekom AG

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    Bonn (ots Ad hoc-Service) -            Deutsche Telekom records net income of almost two billion EUR in the first quarter of the year 2000, including proceeds from sale of Global One - Group revenue increases to EUR 9.4 billion - 1999 financial year a success despite strong competitive pressures

    In the first quarter of the year 2000, Deutsche Telekom was able to maintain its level of income despite the intense competitive pressure and steep drop in rates. Taken on a comparable basis, i.e. excluding One 2 One, max.mobil. and SIRIS, net income has remained the same at EUR 0.5 billion according to preliminary figures. After inclusion of the proceeds from the sale of Global One and after consideration of the changes in the composition of the Deutsche Telekom Group and the accelerated depreciation in area of the telephone network effected to increase our competitiveness, net income was EUR 1.9 billion.

    In comparison with 1998, Deutsche Telekom increased revenues by EUR 1.1 billion to EUR 9.4 billion. Of this increase, the first full consolidation of shareholdings in the British mobile communications operator One 2 One, the Austrian mobile communications company max.mobil. and the French fixed-network company SIRIS accounts for EUR 0.8 billion; EUR 0.3 billion is attributed to the growth drivers and our core businesses. Debt increased to EUR 45.2 billion as at the end of March 2000, compared with EUR 39 billion at the end of the first quarter of 1999. This was mainly attributable to the purchase of MediaOne activities in Poland and Hungary, T-Online capital increase and changes in the composition of the Deutsche Telekom Group.

    Revenues rose slightly in the 1999 financial year, increasing one percent from EUR 35.1 billion to EUR 35.5 billion. This was achieved even though Deutsche Telekom's customers saved more than EUR 3 billion in the wake of price reductions. Market-share losses were clearly contained. It was possible to compensate for the decline in revenues in the traditional network communications segment with sustained growth achieved in the other growth drivers - most notably, mobile communications - and revenues from international business activities. The shareholding in max.mobil. was increased and One 2 One was fully consolidated for the first time in the fourth quarter.

    The proportion of network communications revenues fell to 47.2% of total Group revenues in 1999, as compared with 58.4% in 1998. Domestic and international long-distance call charges now account for only 12% of revenues compared with 24% in 1998. This demonstrates that our reliance on these revenues is diminishing as Deutsche Telekom evolves from a classic telecommunications company to a modern full-service telematics provider.

    Net income totaled EUR 1.3 billion, almost EUR 1 billion down on the previous year's level. The drastic decline in margins in network communications could not be offset, unlike in the case of revenues. Another aspect was goodwill depreciation and startup losses in our strategic shareholdings max.mobil and One 2 One - which totaled EUR 0.5 billion. The costs of the capital increase - over EUR 0.2 billion - must also be considered. Furthermore, there were not yet any partial sales of the broadband cable network during the year under review - and hence no profit contribution either.

    Deutsche Telekom intends to propose at the Annual Shareholders' Meeting an unchanged dividend of EUR 0.62 per share.

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