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DT Plans T-Service Unit

BONN, Germany -- Deutsche Telekom will make its service more customer-oriented and more efficient in future. 45,000 employees are to be brought together in new customer service units. This gives a concrete form to the subject of customer service as part of the Telekom 2010 program. Against this background, the Board of Management of Deutsche Telekom AG has today held in-depth discussions about possibilities to increase the competitiveness of the company in the long term while at the same time safeguarding jobs in the Group and in Germany.

Deutsche Telekom will be hiring around 4,000 additional people in the field of customer service, such as in call centers and T-Punkt outlets to increase the quality of service. In the coming year, around 35,000 employees will then be spun off from T-Com to a new unit, T-Service, which will be responsible for the technical infrastructure and customer service. The 10,000 jobs currently in T-Com's call center unit are also to be spun off to create an independent unit next year. With these spin-offs, Deutsche Telekom is putting the focus on the quality of its service within competitive framework conditions.

"We expect the unions to work with us," emphasized Heinz Klinkhammer, Chief Human Resources Officer of Deutsche Telekom. Under the current framework conditions, such as the rapid pace of technological change, the expansion of regulation and the disproportionately high costs of labor, it is not economically viable to continue employing the same number of people at the same conditions in Germany in future. In the field of customer service and call centers, for example, market remuneration is between 30 and 50 percent below the salaries Deutsche Telekom pays. "We can only safeguard these jobs in the long term if we succeed in consistently aligning our employment and remuneration structures with the market," said Klinkhammer and appealed to the unions to support the plans.

Productivity - such as the number of weekly working hours - also needs to be increased at the same time in the interests of the customer if the company is to be able to offer affordable service. "We can only give employment a chance within the Group with major contributions from the employees' representatives. The alternative is for these units to be deconsolidated," Klinkhammer continued.

The previously announced cuts of 32,000 jobs by 2008, which Deutsche Telekom is implementing without compulsory redundancies at a cost of more than EUR 3 billion, remain unaffected by these discussions. "These cuts will be implemented as planned. No further staff reduction program is planned beyond 2008," said Klinkhammer.

Deutsche Telekom will initiate detailed negotiations with the unions at the beginning of next year on the foundation of the agreed basic concept.

Deutsche Telekom AG (NYSE: DT)

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