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Deutsche Telekom steps up investment in growth in 2014 and adjusts dividend planning to 50 euro cents

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Ad hoc notification from Deutsche Telekom in accordance with § 15 of the Securities Trading Act (WpHG)

The Board of Management of Deutsche Telekom today approved the financial planning for the Group for the years 2013 through 2015. The relevant committees of the Supervisory Board, the General and Finance Committees, then addressed the plans and formulated a recommendation for the Supervisory Board to approve them at its next meeting.

The plans are for the Group to increase its capital expenditure considerably over the next three years (including expenditure following the closing of the business combination of MetroPCS with T-Mobile USA, which is expected in the first half of 2013). Capital expenditure (excluding spectrum investment) of EUR 9.8 billion is scheduled for 2013 compared with an expected total of EUR 8.3 billion in the current year. The increased level of capital expenditure is intended to generate year-on-year growth both in revenue and adjusted EBITDA as soon as 2014. To create a basis for comparison, MetroPCS is assumed to be included for the full 2013 financial year based on a pro forma calculation.

The dividend for the 2013 and 2014 financial years is to be adjusted to these plans, with a payment of 50 euro cents per dividend-bearing share planned for both years. The plans for dividend payments are subject to approval by the relevant bodies and the fulfillment of other legal requirements.

The higher investment volume is to be used to roll out the broadband infrastructure in Germany and the United States in particular. In the mobile communications network, this will be done using the state-of-the-art technology LTE. Around EUR 6 billion is earmarked for rolling out the broadband infrastructure in the German fixed network with optical fiber and vectoring between 2013 and 2020. In addition, T-Mobile USA has entered into an agreement with Apple to bring products to market together in 2013.

Expected development of revenue in the operating segments and the Group.

Deutsche Telekom expects its revenues in the Germany segment to stabilize in 2014. The Europe segment is expected to record organic growth again in 2014, i.e., without the impact of regulatory decisions, exchange rate effects and exceptional state measures such as the imposition of additional taxes. The U.S. business is to return to growth in the planning period. The activities of the Digital Business Unit are expected to generate double-digit growth rates until 2015. Deutsche Telekom expects T-Systems to generate profitable revenue growth in its business with customers outside the Deutsche Telekom Group.

Deutsche Telekom therefore expects the Group to generate additional revenue in 2014 compared with the prior year (including MetroPCS on a comparable basis).

Expected development of adjusted EBITDA in the Group for 2013 and 2014.

The forecast for the Group in its current structure is for adjusted EBITDA of around EUR 17.4 billion in 2013 (forecast for 2012: around EUR 18 billion). Based on a pro forma calculation that assumes inclusion of MetroPCS for the entire financial year 2013, adjusted EBITDA would amount to around EUR 18.4 billion. Deutsche Telekom is planning a year-on-year increase in adjusted EBITDA in 2014 (including MetroPCS on a comparable basis).

Expected development of free cash flow in the Group for 2013 through 2015.

The Group's free cash flow is expected to decrease to around EUR 5 billion in 2013 (scheduled figure for 2012: around EUR 6 billion), primarily as a result of the increased capital expenditure and the systematic implementation of the Challenger strategy in the U.S. market, including the agreement with Apple. The Group's free cash flow is expected to be around EUR 6 billion in 2015 (including MetroPCS).

Dividend planning for 2013 and 2014.

Subject to approval by the relevant bodies and the fulfillment of other legal requirements, a dividend of 50 euro cents per dividend-bearing share is to be paid for each of the financial years 2013 and 2014. The Company also plans to offer shareholders the option of receiving payment in the form of shares (dividend in kind). Both forms of payment are tax-free for domestic shareholders.

Planning for key financial indicators.

The ratio of net debt to adjusted EBITDA from 2013 through 2015 is to remain within the range of 2.0 to 2.5 as in the previous three years. The equity ratio is also scheduled to remain in the same range as for the previous period of 25 to 35 percent.

Deutsche Telekom continues to manage its liquidity reserve such that at least capital market maturities for the forthcoming 24 months are covered at any given time. Closely linked to this is the approach of a balanced maturities profile.

Disclaimer This ad hoc notification contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. These forward-looking statements include statements with regard to the expected development of revenue, earnings, profits from operations, depreciation and amortization, cash flows and personnel-related measures. They should therefore be considered with caution. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom's control. Among the factors that might influence our ability to achieve our objectives are the progress of our workforce reduction initiative and other cost-saving measures, and the impact of other significant strategic, labor or business initiatives, including acquisitions, dispositions, business combinations, and our network upgrade and expansion initiatives. In addition, stronger than expected competition, technological change, legal proceedings and regulatory developments, among other factors, may have a material adverse effect on our costs and revenue development. Further, the economic downturn in our markets, and changes in interest and currency exchange rates, may also have an impact on our business development and the availability of financing on favorable conditions. Changes to our expectations concerning future cash flows may lead to impairment write downs of assets carried at historical cost, which may materially affect our results at the group and operating segment levels. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, our actual performance may materially differ from the performance expressed or implied by forward-looking statements. We can offer no assurance that our estimates or expectations will be achieved. Without prejudice to existing obligations under capital market law, we do not assume any obligation to update forward-looking statements to take new information or future events into account or otherwise.

In addition to figures prepared in accordance with IFRS, Deutsche Telekom also presents non-GAAP financial performance measures, including, among others, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted EBIT, adjusted net profit, free cash flow, gross debt and net debt. These non-GAAP measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Non-GAAP financial performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways.

Safe Harbor Statement

Additional information and where to find it This document also relates to a proposed transaction between MetroPCS Communications, Inc. (“MetroPCS”) and Deutsche Telekom AG (“Deutsche Telekom”) in connection with T-Mobile USA, Inc. (“T-Mobile”). The proposed transaction will become the subject of a proxy statement to be filed by MetroPCS with the Securities and Exchange Commission (the “SEC”). This document is not a substitute for the proxy statement or any other document that MetroPCS may file with the SEC or send to its stockholders in connection with the proposed transaction. MetroPCS’ investors and security holders are urged to read the proxy statement (including all amendments and supplements thereto) and all other relevant documents regarding the proposed transaction filed with the SEC or sent to MetroPCS’ stockholders as they become available because they will contain important information about the proposed transaction. All documents, when filed, will be available free of charge at the SEC’s website ( You may also obtain these documents by contacting MetroPCS’ Investor Relations department at +1 (214) 570-4641, or via e-mail at This communication does not constitute a solicitation of any vote or approval.

Participants in the solicitation MetroPCS and its directors and executive officers will be deemed to be participants in any solicitation of proxies in connection with the proposed transaction, and Deutsche Telekom and its directors and executive officers may be deemed to be participants in such solicitation. Information about MetroPCS’ directors and executive officers is available in MetroPCS’ proxy statement dated April 16, 2012 for its 2012 Annual Meeting of Stockholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC regarding the proposed transaction when they become available. Investors should read the proxy statement carefully when it becomes available before making any voting or investment decisions.

Cautionary statement regarding forward-looking statements This document includes “forward-looking statements” for the purpose of the “safe harbor” provisions within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Any statements made in this document that are not statements of historical fact, including statements about our beliefs, opinions, projections, and expectations, are forward-looking statements and should be evaluated as such. These forward-looking statements often include words such as “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “views,” “projects,” “should,” “would,” “could,” “may,” “become,” “forecast,” and other similar expressions.

All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of MetroPCS, Deutsche Telekom and T-Mobile and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to, the possibility that the proposed transaction is delayed or does not close, including due to the failure to receive the required MetroPCS stockholder approvals or required regulatory approvals, the taking of governmental action (including the passage of legislation) to block the transaction, the failure to satisfy other closing conditions, the possibility that the expected synergies will not be realized, or will not be realized within the expected time period, the significant capital commitments of MetroPCS and T-Mobile, global economic conditions, disruptions to the credit and financial markets, fluctuations in exchange rates, competitive actions taken by other companies, natural disasters, difficulties in integrating the two companies, disruption from the transaction making it more difficult to maintain business and operational relationships, possible disruptions or intrusions of MetroPCS’ or T-Mobile’s network, billing, operational support and customer care systems which may limit or disrupt their ability to provide service, actions taken or conditions imposed by governmental or other regulatory authorities and the exposure to litigation. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the MetroPCS’ 2011 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and other filings with the SEC available at the SEC’s website (

The forward-looking statements speak only as to the date made, are based on current assumptions and expectations, and are subject to the factors above, among others, and involve risks, uncertainties and assumptions, many of which are beyond our ability to control or ability to predict. Neither MetroPCS’ investors and security holders nor any other person should place undue reliance on these forward-looking statements. Neither MetroPCS, Deutsche Telekom nor any other party undertake any duty to update any forward-looking statement to reflect events after the date of this document, except as required by law.

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