DT Restructures in Germany

BERLIN -- Deutsche Telekom's new structure, with a stronger regional and integrated focus, is taking shape: on Wednesday evening, the Supervisory Board of Deutsche Telekom AG approved the Board of Management's proposals on the restructuring of operations in Germany. Board of Management Chairman René Obermann will present the basic elements of this restructuring at today’s shareholders’ meeting in Cologne. Under these proposals, fixed and mobile communications business in Germany will be combined into just one business. "Mobile and fixed-network services will in the future be planned, built, managed, and marketed from a single mold," said Obermann to shareholders.

Mr. Obermann had positive information to report to the shareholders' meeting concerning the Group's strategic goals, with business in Germany developing well and international business being reinforced as a result of investment in the Greek telecommunications group OTE. Success with mobile Internet services also confirms Group strategy: After the consistent restructuring towards network-centric ICT products, T-Systems is showing an upturn for the first time in years, said Mr. Obermann. "The headwinds are battering us, too," he continued. "However, our company is relatively stable in the face of the worst economic downturn for 80 years."

Through the restructuring of business in Germany, Deutsche Telekom is now continuing the course it established in fall 2006 under Mr. Obermann's initiative, with integrated sales and customer service in Germany. The new structure should – subject to approval by the shareholders and financial authorities – be achieved in two stages:

• T-Mobile International AG is to be merged into Deutsche Telekom AG. T-Mobile Deutschland GmbH will thus become a direct subsidiary of Deutsche Telekom AG.

• Following this, the two units T-Home and T-Mobile Deutschland GmbH are to be combined into one company, which will be a wholly-owned subsidiary of Deutsche Telekom AG.

An extraordinary shareholders’ meeting will be called this year in order to gain the approval of shareholders. The new structure will be subsequently and promptly implemented. The three service companies (Deutsche Telekom Kundenservice GmbH, Deutsche Telekom Technischer Service GmbH, and Deutsche Telekom Netzproduktion GmbH) and Telekom Shop Gesellschaft mbH will then become wholly-owned subsidiaries of the new company controlling German operations. Further details of this restructuring are being developed under the One Company project, headed by Thomas Dannenfeldt as the Board of Management Representative.

"Customers benefit under the new structure as their business will no longer be processed separately in the fixed and mobile areas, but they will in the future receive integrated offers and services from a single source," emphasized Mr. Obermann. The fixed and mobile networks are converging – this can be seen, for instance, in laptops that use both networks for Internet access. The iPhone is another example, which accesses the Internet using the fixed network if WLAN is available. Deutsche Telekom intends to offer its customers in Germany even more integrated services that make connected life and work possible. "This requires efficient man-agement by one unit," Deutsche Telekom's CEO continued.

Deutsche Telekom AG (NYSE: DT)