Deutsche Telekom requests approval for the merger of T-Home and T-Mobile in Germany

T-Home and T-Mobile in Germany are to be merged to create a single company in order to increase their competitiveness. Deutsche Telekom has therefore invited its shareholders to an extraordinary shareholders' meeting in Hanover on November 19 to ask for their approval for the restructuring of its business in Germany.

"Now is the right time to merge our mobile and fixed-network business. Two healthy, competitive business areas will become even stronger by joining forces," said Chairman of the Board of Management René Obermann. This is the Group's response to the challenges facing the industry. This will put Deutsche Telekom in a better position to offer integrated solutions and services for fixed network and mobile communications from a single source. The Group is also continuing to focus on efficient planning and the simplification of systems and wholesale products.

Deutsche Telekom has been working with a more regionally and functionally oriented focus with its new management structure since July of this year. The aim of the restructuring is to bring together the Group's domestic fixed- network business and its domestic mobile business within a new Germany company. There is an enormous potential, said Mr. Obermann. On the one hand, customers with fixed-network and mobile contracts with Deutsche Telekom are considerably more loyal. On the other hand, he said, "just one in five of our 29 million customer households currently has a fixed-network and a mobile contract with Deutsche Telekom. If we were to persuade just one percent of the remaining customers to sign up for a second contract, our revenue could increase by up to EUR 100 million per year."

The planned merger will make Deutsche Telekom more competitive in its domestic business compared to other globally structured telecommunications companies that offer integrated fixed-network and mobile solutions. Within the Deutsche Telekom Group the Hungarian company Magyar Telekom, for example, is already very successful as an integrated provider.

All restructuring steps have been drawn up in agreement with the employees' representatives to make sure that they are implemented in a spirit of partnership. "This step is all about customers," Obermann emphasized. The goals of the new Germany company were to offer customers improved services, to generate competitive advantages, and to increase the ability to innovate. Overall, the company expects the spin-off to generate a medium-term boost up to earnings of EUR 0.6 billion.

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