T-Mobile International: strongest quarter in the history of the company

  • T-Mobile with strong customer growth in core countries Germany, United States and UK as well as revenue and EBITDA
  • T-Mobile Deutschland: Successful strategy continues
  • T-Mobile USA: 20 million customer mark surpassed
  • T-Mobile UK: First signs of sustained stabilization

Bonn, 9 November 2005 - The third quarter of 2005 was the strongest quarter so far in the history of
T-Mobile International. As such, the Deutsche Telekom subsidiary recorded an excellent close to the period from July to September.

A particularly pleasing development was the growth in the number of customers to 83.1 million: Around 530,000 new customers in Germany chose T-Mobile in the third quarter of the year, as well as 1,058 million in the United States and 258,000 in the United Kingdom.

The company is also in an excellent position with its financial figures:
Compared to the same quarter last year, T-Mobile's revenue increased by 10.6 percent  to 7.6 billion. EBITDA was raised by 356 million to 2.7 billion..

Details on individual countries
T-Mobile Deutschland
is successfully continuing its strategy of high-value growth. The German market leader increased its number of customers by 530,000 in the past quarter to 28.7 million. Of this customer growth, contract customers account for one third and prepaid customers two thirds; whereas accretion was achieved - in line with the strategy - with lower customer acquisition costs than in the prior year. These costs were reduced by EUR 16 per new customer compared with the third quarter of the prior year. Churn, EBITDA and the EBITDA margin (42.5 percent) were at the same level as in the prior year, despite the intensified competitive environment. Total revenue decreased slightly by 2.2 percent . This was the result of the decrease in low-margin revenues from terminal equipment. Service revenues (ARPU revenues) increased by 3.9 percent quarter-on-quarter, bringing them slightly above the figure for the prior year. A further positive development is that the proportion of customers choosing a card contract without a subsidized handset (SIM card only) is increasing. An example of this is the Relax Eco rates: Customers pay only half the monthly price for these minute-based packages, as they do not receive a handset with the contract. ARPU remained stable at EUR 23.

T-Mobile USA achieved an important milestone by surpassing the 20 million customer mark. By the end of September, T-Mobile USA served 20.3 million customers. Costumer growth therefore increased by approximately 4 million within one year. At the same time, customer acquisition costs were decreased considerably by EUR 28 compared to the same period in the previous year. T-Mobile USA increased its revenue by 26.4 percent year-on-year to EUR 3.1 billion and, at EUR 940 million, EBITDA was at the same level as the traditionally strong T-Mobile Deutschland figure for the first time.  Concurrently, ARPU was boosted to EUR 42 compared to EUR 41 in the previous quarter.

T-Mobile UK is starting to see the first signs of sustained stabilization on the difficult UK market. Following negative net additions in the prior quarter,
T-Mobile UK stabilized its customer base and added around 258,000 customers (incl. Virgin) to bring the total to 16.3 million.

The trend in ARPU-relevant revenue is now clearly on the rise again following the decreases in the first and second quarters of 2005. The decreases, which are the result of a cut in mobile termination charges by the British regulator, have now almost been compensated.

The EBITDA margin of 37 percent includes a positive effect of GBP 27 million of provisions relating to other periods for the so-called "council tax" which proved to be too high and were reversed.

The development of ARPU-relevant revenue in Austria and the Czech Republic was particularly positive, with growth of around 4 and 9 percent, respectively. Overall, the increase in Central and Eastern Europe was even greater, at 10 percent.

The EBITDA margin in Central and Eastern Europe was 46 percent in the third quarter, in Western Europe 38 percent and in the United States
30 percent, bringing the total for T-Mobile to 36 percent. 

Customers (thousands) Q3/04 Q3/05 Delta %
T-Mobile International 75,3955) 83,087 10.2
T-Mobile Deutschland 27,358 28,713 5.0
T-Mobile USA 16,295 20,302 24.6
T-Mobile UK1) 15,207 16,313 7.3
T-Mobile Netherlands 2,253 2,295 1.9
T-Mobile Austria 2,004 2,050 2.3
T-Mobile Czech Republic 4,130 4,553 10.2
T-Mobile Hungary 3,989 4,095 2.6
T-Mobile Slovakia 1,807 1,916 6.0
T-Mobile Croatia 1,428 1,736 21.5
Others (Macedonia/Montenegro) 9265) 1,113 20.6


Revenue (millions of euro)4) Q3/04 Q3/05 Delta %
T-Mobile International 6,914 7,648 10,6
T-Mobile Deutschland 2,261 2,212 -2.2
T-Mobile USA 2,458 3,108 26.4
T-Mobile UK 1,106 1,058 -4.3
T-Mobile Netherlands 270 265 -1.9
T-Mobile Austria 221 230 4.1
T-Mobile Czech Republic 213 239 12.2
T-Mobile Hungary 274 286 4.4
T-Mobile Slovakia 85 97 13.5
T-Mobile Croatia 136 157 15.4
Others (Macedonia/Montenegro) 36 53 47.2


Adjusted EBITDA (millions of euro)2) Q3/04 Q3/05 Delta in abs.
T-Mobile International 2,374 2,111 356
T-Mobile Deutschland 958 940 -18
T-Mobile USA 625 940 315
T-Mobile UK 390 394 4
T-Mobile Netherlands 58 52 -6
T-Mobile Austria 66 64 -2
T-Mobile Czech Republic 102 107 5
T-Mobile Hungary 99 121 22
T-Mobile Slovakia 34 43 9
T-Mobile Croatia 79 79 0
Others (Macedonia/Montenegro) 19 28 9


EBITDA margin adjusted (euro million) in % Q3/04 Q3/05 Delta in abs.
T-Mobile International 34.3 35.7 1.4 pp
T-Mobile Deutschland 42.4 42.5 0.1 pp
T-Mobile USA 25.4 30.2 4.8 pp
T-Mobile UK 35.3 37.2 2.0 pp
T-Mobile Netherlands 21.5 19.6 -1.9 pp
T-Mobile Austria 29.9 27.8 -2.0 pp
T-Mobile Czech Republic 47.9 44.8 -3.1 pp
T-Mobile Hungary 36.1 42.3 6.2 pp
T-Mobile Slovakia 39.8 44.3 4.6 pp
T-Mobile Croatia 58.1 50.3 -7.8 pp
Others (Macedonia/Montenegro) 52.8 52.8 0.0 pp


ARPU (euro)3) Q3/04 Q3/05 Delta %
T-Mobile Deutschland 24 23 -4.2
T-Mobile USA 43 42 -2.3
T-Mobile UK 30 29 -3.3
T-Mobile Netherlands 37 37 -0.2
T-Mobile Austria 34 35 2.9
T-Mobile Czech Republic 16 16 0.0
T-Mobile Hungary 20 22 10.00
T-Mobile Slovakia 15 16 6.7
T-Mobile Croatia 31 29 -6.5


SACs per gross add (euro) Q3/04 Q3/05 Delta %
T-Mobile Deutschland 112 96 -14.3
T-Mobile USA 149 121 -18.8
T-Mobile UK 107 115 7.5
T-Mobile Netherlands 114 145 27.2
T-Mobile Austria 102 132 29.4
T-Mobile Czech Republic 32 26 -18.8
T-Mobile Hungary 48 31 -35.4
T-Mobile Slovakia 35 31 -11.4
T-Mobile Croatia 51 38 -25.5


Blended monthly churn (in %) Q3/04 Q3/05 Delta in % pts.
T-Mobile Deutschland 1.5 1.6 0.1
T-Mobile USA 3.0 2.9 -0.1
T-Mobile UK 2.5 3.1 0.6
T-Mobile Netherlands 2.3 2.9 0.6
T-Mobile Austria 1.7 1.8 0.1
T-Mobile Czech Republic 1.0 0.9 -0.1
T-Mobile Hungary 1.7 1.7 0.0
T-Mobile Slovakia 1.4 1.9 0.5
T-Mobile Croatia 0.8 0.8 0.0

Notes:
1) Including Virgin Mobile
2) EBITDA: Results from ordinary business activities before net financial income/expense including income related to subsidiaries, associated and related companies, amortization and depreciation, and before other taxes, adjusted for special factors.
3) ARPU contains monthly service fee, as well as voice, non-voice, visitor and roaming revenues.
4) These amounts relate to the companies' respective unconsolidated financial statements (single-entity financial statements adjusted for uniform group accounting policies and reporting currency) without taking into consideration consolidation effects.
5)Customer figures are pro forma, as Monet is included

Disclaimer
This release contains forward-looking statements and forward-looking pro forma metrics ("expected EBITDA") 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 submitted to the U.S. Securities and Exchange Commission. 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 IFRS, 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 IFS. For a definition of these pro forma figures, please refer to the explanations under "Reconciliation to pro forma figures" on Deutsche Telekom's Investor Relations website at www.deutschetelekom.com.

This release contains financial information that has been prepared in accordance with International Financial Reporting Standards, or "IFRS", and on the basis of the new strategic business areas. The IFRS financial information contained in this report was prepared on the basis of the assumption that, with the exceptions of IAS 39 "Financial Instruments: Recognition and Measurement" and IFRIC 3 "Emission Rights", all existing standards and interpretations that have been issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) will be fully endorsed by the EU. The accounting policy for financial instruments takes into account the proposed EU revisions to IAS 39 and complies with the amended IAS 39. IFRIC 3 is not relevant for Deutsche Telekom. Subject to EU endorsement of outstanding standards and no further changes from the IASB, the information presented here is expected to form the basis for reporting Deutsche Telekom's financial results for 2005, and for subsequent reporting periods. However, Deutsche Telekom cannot assure you that there will not be material changes in IFRS between the date of this Interim Report and the first date on which Deutsche Telekom is required to publish financial statements for 2005, 2004 or 2003 under IFRS.


 
About the Company

T-Mobile Czech Republic, a member of the international telecommunications group Deutsche Telekom, has almost 6.2 million customers, the number-one operator in the Czech market. T-Mobile is an integrated operator: in addition to telecommunications services, it offers comprehensive ICT solutions not only for companies, but also for other organizations and individuals. It provides outstanding services in the high-speed network, which was proved repeatedly by benchmark testing performed by umlaut (former P3) with Best-in-Test seal.

T-Mobile Czech Republic places emphasis on taking a responsible approach to the environment and society. It adheres to fair business practices, helps beneficial applications and services to see the light of day, supports non-profit organizations, small businesses and individuals, and lends a helping hand whenever crisis situations arise. The company’s employees serve as volunteers in many places across the entire Czech Republic.

More information about the company is available at www.t-mobile.cz, www.t-press.cz (the portal for journalists) and www.t-mobile.cz/pomahame (information on the company’s CSR activities).

Contact details of the press unit: press@t-press.cz.