Investor Relations

Strategy for long-term success

With a large majority, Deutsche Telekom's shareholders have accepted the proposals made to the Shareholders' Meeting by the Board of Management and the Supervisory Board. They voted for a dividend of 0.78 euros, elected new members to the Supervisory Board and approved the actions of management.

These decisions were substantiated by CEO René Obermann who previously told the meeting Deutsche Telekom aims to become one of the global market leaders for products and services pertaining to connected life and work.

He told the 5800 shareholders present in Cologne that we were experiencing the biggest revolution the telecommunications industry has seen since the invention of the telephone. "The driving forces are digitization, the mobilization of access and the personalization of content". The development of the Internet in recent years was groundbreaking and was still opening up a whole range of new opportunities. "Yet many people are still finding it difficult to keep pace with the development. This is why they are looking for one reliable partner. And we want to be that partner – with products that are easy to use, reliable and efficient."

The CEO sees developing innovations for networking as one of DT’s main tasks. "Modernizing our existing business is another. This is precisely how we create the strength to invest in new networks and services."

Obermann sees the past year in a positive light: "We energetically tackled and measurably improved the issue of service in Germany. Without doubt though, we are still a long way from achieving our aims and must avoid the temptation of pretending things are better than they are. But the facts speak for themselves: our service has improved. Even Germany's Technical Control Board, the TÜV, confirmed this, as did the readers of several specialist magazines – not to mention our own DSL customers, less and less of whom are moving to the competition." For example, availability of customer service has increased to over 80 percent.

Obermann said the Group's "Focus, fix and grow" strategy is increasingly proving itself. Only one day before the meeting, the Deutsche Telekom Supervisory Board approved plans to acquire a stake in the Greek company OTE, as did the government in Athens. This represents a further important step in Deutsche Telekom's growth outside Germany. "We have thus found a strong partner in South-Eastern Europe," added the CEO.

He also told shareholders that DT had not only reached, but exceeded its goals for 2007. In the light of strong free cash flow, the favorable development of operating income and solid balance sheet ratios, the Supervisory Board and Board of Management proposed to increase the dividend by eight percent to 0.78 euros.

2008 has also got off to a good start, as the results for the first quarter show. EBITDA amounted to 4.7 billion euros, while free cash flow and net profit also rose appreciably.

‘Daily life becomes digital’ Turning to the long-term perspective through 2015, Obermann told shareholders that "we want to help shape change." Future activities would therefore focus on four core competencies:

  • Networks and lines: DT is building the most powerful access networks for its customers – at home and on the move. "Always best connected – providing the best connection automatically and at all times – that is our goal. We are investing billions of euros to achieve this goal.”
  • Internet-based communication services: Along with the mobile Internet in the form of web'n'walk, DT is currently adding innovative highlights with so-called community products like MyFaves and with Internet-based TV.
  • Intelligent content management: DT wants to ensure that people can share everything that is important to them with friends, family and colleagues – regardless of time and place.
  • The fourth component is first-class customer service. “We are investing, for example, in customer service training – also and especially for our managers – in better IT systems and modernizing sites.”

Obermann added that success largely depended on innovation- friendly and investment-friendly conditions. "What we urgently need in the future is greater planning and investment reliability. This is because the impact of regulation on our German business remains extremely negative." For this reason, the CEO said, "We need to become even less dependent on the German market in future."

Shareholders' representatives were generally positive in their assessment of management's performance in a tough competitive environment. Some speakers questioned the proposed raising of the dividend, while most welcomed the decision to acquire a stake in OTE.

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