Deutsche Telekom continues to record profitable growth in difficult market environment

Despite the continued weak economic environment and increased pressure from competitors and regulation, Deutsche Telekom continued its course of profitable growth in the first quarter of 2004, in particular as a result of the positive development of its international business activities. On a like-for-like basis – i.e., excluding in particular the cable business that was still consolidated in the first two months of 2003 – and excluding the effect of exchange rate fluctuations, the net revenue of the Group increased by around 7.5 percent. Measured on the same basis, adjusted Group EBITDA increased by around 6.2 percent. Reported net revenue rose by 2.7 percent. Supported by the continuing measures as part of Agenda 2004 to improve efficiency, both EBITDA and free cash flow increased in line with expectations. Reported adjusted Group EBITDA grew by 2.4 percent.

Net revenue Reported net revenue increased by EUR 0.4 billion, or around 2,7 percent, year-on-year to almost EUR 14.0 billion in the first quarter of 2004. Including revenues of around EUR 250 million from companies that were still consolidated in the first quarter of 2003 and including the negative impact of around EUR 0.4 billion from exchange rate fluctuations, net revenue increased organically by around 7.5 percent year-on-year. T-Mobile was the main driving force behind the increase in reported revenue, recording growth of 11.9 percent. The effects of exchange rate fluctuations with the U.S. dollar and the pound sterling were particularly strong in this area: organic revenue growth in the mobile communications division was more than 19 percent. T-Online also recorded a strong increase of 10.8 percent in reported revenue. This more than offset the reductions in revenue at T-Com of 6.9 percent, or 4.7 percent on an organic basis, mainly as a result of competitive and economic effects, and, at T-Systems, around 3 percent, or plus 0.3 percent on an organic basis, primarily due to changes in the consolidated group and decreases in the telecommunications segment. Revenue generated outside Germany increased by 8.4 percent in the first quarter of 2004. The proportion of revenue generated outside Germany increased by 2.1 percentage points year-on-year to 39.6 percent, mainly driven by the positive development of revenue at T-Mobile USA. EBITDA Reported Group EBITDA increased by 2.4 percent year-on-year from EUR 4.5 billion to EUR 4.6 billion. Whereas adjusted EBITDA in the first quarter of 2003 included the positive effect of around EUR 70 million from companies that have since been deconsolidated, the figure for the first quarter of 2004 includes a negative impact of just over EUR 90 million from exchange rate fluctuations. Excluding these exchange rate fluctuation effects and changes in the consolidated group, adjusted EBITDA increased organically by 6.2 percent. EBITDA increases at T-Mobile, T-Online and T-Systems more than offset the decline at Group Headquarters & Shared Services, while the T-Com division reports stable EBITDA despite a decrease in revenue.. EBITDA including special factors decreased by around 8 percent to EUR 4.6 billion compared with the first quarter of 2003. This is primarily due to the non-recurrence of special factors such as the book gains from the sale of the remaining cable companies and Telecash, both of which made a positive contribution to reported EBITDA in the previous year. Special factors affecting EBITDA in the first quarter of 2004 include expenses of EUR 69 million for personnel restructuring measures (severance payments). Results from ordinary business activities Adjusted results from ordinary business activities, an expression of the development of operating results, increased from EUR 66 million to EUR 415 million. In addition to the improvement in adjusted EBITDA, lower levels of depreciation and amortization resulting from reduced capital expenditures made a major contribution to the strong increase. Net income Adjusted net income doubled from EUR 113 million in the first quarter of 2003 to EUR 227 million, even though the figure for the first quarter of 2004 includes an accrual for contingent losses of around EUR 148 million for potential negative effects from the Toll Collect project . This accrual is a consequence of the revised project plan implemented by the new management in the first quarter of 2004, which led to a change in the project budget. Including special factors, net income in the first quarter of this year amounted to EUR 169 million, compared with EUR 853 million in the same period last year. This decrease is mainly due to the drop in other operating income and the non-recurrence of a positive tax effect resulting from T-Mobile’s change in legal form from a stock corporation to a partnership in 2003. Free cash flow Free cash flow before dividend payments increased considerably by EUR 0.9 billion year-on-year to EUR 2.9 billion in the first quarter of 2004. This growth is attributable in particular to an improvement of around EUR 1.3 billion in cash generated from operations, including a.o. refunded income tax of balanced EUR 0.4 billion. Net debt Net debt decreased further in the first quarter of this year, after debt reduction targets had already been exceeded at the end of 2003. Net debt amounted to EUR 44.6 billion at the end of March 2004. This represents a decrease of around EUR 2.0 billion since the end of 2003 and a reduction of around EUR 11.7 billion compared with the level in the first quarter of 2003. T-Com realizes further improvements in efficiency

1) EBITDA = Results of ordinary business activities before net financial income / expense, including income related to subsidiaries, associated and related companies, amortization and depreciation, and before other taxes; for a detailed explanation of these figures, see Reconciliation of pro forma figures at www.telekom.de 2) For detailed information, see Reconciliation of pro forma figures at www.telekom.de 3) Average number of employees

T-Com was once again the largest contributor to revenue in the Group in the first quarter of 2004 with revenue of just under EUR 7.0 billion. On a like-for-like basis, i.e., excluding pro rata revenue generated by the cable companies that were sold as of March 1, 2003, and excluding the effect of exchange rate fluctuations, T-Com's revenue in the first quarter of 2004 decreased 4.7 percent year-on-year. The comparison of revenue between the first quarter of 2004 and the first quarter of 2003 was largely affected by the deconsolidation of the cable companies in 2003, the introduction of call-by-call in the local network in April 2003 and carrier pre-selection in the local network in July 2003, as well as the reduction of interconnection charges in December 2003 by an average of 9.5 percent. As a result of efficiency-enhancement programs to increase staff productivity and the measures taken to improve quality and streamline operating costs, T-Com has succeeded in realizing further cost reductions and thus increased the adjusted EBITDA margin by 2.2 percentage points year-on-year to 37.9 percent. On a like-for-like basis, i.e., excluding the deconsolidation effects from the sale of cable business activities in the first quarter of 2003, adjusted EBITDA increased by 1.8 percent despite a significant drop in revenue. In total, T-Com reduced the cost base by approximately EUR 0.5 billion. EBITDA including special factors amounted to EUR 2.6 billion; this figure includes around EUR 36 million in severance payments. Revenue development in Germany was mainly affected by the continued weakness of the economy and the introduction of call-by-call and pre-selection in the local network last year, respectively. The decrease in interconnection charges as well as increasing network interconnection by competitors also contributed to the reduction in total revenue. Revenue in the local loop continued to increase in comparison with the previous year, but did not completely offset the decrease in revenue from calls. Revenue from broadband lines increased as a result of the continued migration of customers from basic to more technically advanced lines. Revenue generated in Central and Eastern Europe was 2.6 percent lower than the corresponding figure in the prior-year quarter, mainly as a result of unfavorable currency parities at MATÁV in Hungary and HT in Croatia. Assuming stable exchange rates, revenue in this region increased by 1.2 percent. Foreign subsidiaries generated more than 13 percent of T-Com‘s total revenue. Results from ordinary business activities – excluding expenses for severance payments and bridging allowances of EUR 36 million – increased by 6 percent to EUR 1.3 billion. Accruals for contingent losses of EUR 148 million for Toll Collect also had a negative impact on results from ordinary business activities. The broadband market continued to expand considerably. The number of T-DSL lines in operation in Germany increased by 37.5 percent year-on-year to 4.4 million. Including DSL lines operated by T-Com's majority-owned subsidiaries in Eastern Europe – where the number of DSL lines almost tripled – T-Com had approximately 4.5 million DSL lines in operation by the end of the first quarter of 2004, a year-on-year increase of 424,000. This success is partly attributable to the broadband initiative, which has been pushed further in Germany since April by T-Com's "1,2,3" tariff program. The number of ISDN channels in Germany increased by a further 301,000 compared with the end of 2003 to 21.8 million channels in the first quarter of 2004, almost offsetting the decrease in analog lines. The average workforce was reduced by 13.6 percent to 125,700 employees as a result of successful staff reduction measures. The focus of the T-Com division continues to be on boosting profitability and improving margins. T-Mobile continues to record strong increases in revenue and EBITDA

1) EBITDA = Results of ordinary business activities before net financial income / expense, including income related to subsidiaries, associated and related companies, amortization and depreciation, and before other taxes; for a detailed explanation of these figures, see Reconciliation of pro forma figures at www.telekom.de 2) For detailed information, see Reconciliation of pro forma figures at www.telekom.de 3) Average number of employees

In the first quarter of 2004, reported revenue at T-Mobile increased by around 12 percent year-on-year to EUR 5.9 billion. T-Mobile USA generated the greatest revenue growth with an improvement of EUR 388 million, or more than 23 percent, to just under EUR 2.1 billion. This increase can once again be attributed to strong customer growth, which even surpassed the very high figure recorded for the fourth quarter of 2003. Compared with the first quarter of last year, the strength of the euro, above all in relation to the U.S. dollar and the pound sterling, had a significant negative impact on the total revenue of the T-Mobile group in the first quarter of 2004. Furthermore, the 100-percent shareholding in the Austrian consumer electronics and photographic equipment chain Niedermeyer was sold with retroactive effect from the beginning of 2004. Measured in U.S. dollars, T-Mobile USA recorded revenue growth of approximately 43 percent to a total of USD 2.6 billion. Reported EBITDA of the T-Mobile group rose by EUR 163 million, or just under 11 percent, year-on-year to EUR 1.7 billion, thus also exceeding EBITDA in the fourth quarter of 2003. At 28.2 percent, the EBITDA margin was roughly on a par with the first quarter of 2003 and exceeded the margin in the fourth quarter of 2003. T-Mobile USA made a major contribution to this development, having increased its EBITDA by around 25 percent to EUR 405 million and achieved a margin of 19.6 percent despite setting a new record for new customer acquisition. Measured in U.S. dollars, EBITDA at T-Mobile USA climbed by approximately 46 percent to USD 507 million. T-Mobile Deutschland continued to be the main EBITDA contributor, generating EUR 773 million compared to EUR 814 million a year ago due to a number of non-operating factors. In the first quarter of 2003, T-Mobile recorded positive non-operating factors such as insurance compensation totaling around EUR 30 million. In contrast, the first quarter of 2004 was affected by negative non-operating factors totaling around EUR 60 million, primarily relating to the replenishment of the cash reserve account for the ABS program launched in the fourth quarter of 2003. As a result, the EBITDA margin fell to 36.4 percent compared with 40.8 percent in the first quarter of 2003. Excluding these non-operating factors, stable EBITDA development of slightly more than 39 percent was recorded. EBITDA at T-Mobile UK increased significantly by around 39 percent year-on-year to EUR 385 million. The EBITDA margin was 34 percent. The non-recurrence of liabilities amounting to approximately EUR 31 million in connection with the sale of shares in Virgin Mobile and the altered contractual terms with Virgin Mobile applicable since the first quarter of 2004 had a positive impact on EBITDA. In addition, T-Mobile's subsidiaries in Austria and the Czech Republic generated EBITDA of EUR 55 million and EUR 84 million, respectively. The Austrian market in particular is subject to fierce price competition, which had a negative impact on EBITDA. In the Netherlands, T-Mobile broke even in terms of EBITDA. The number of mobile communications customers at T-Mobile's majority-owned subsidiaries increased by more than 15.1 percent, or 8.3 million, compared with the first quarter of 2003, to 63.4 million. The proportion of fixed-term contract subscribers at T-Mobile group level increased year-on-year from 47 percent to 49 percent. While the number of customers in Europe increased by around 11 percent at the end of March 2004 compared with the first quarter of 2003, T-Mobile USA increased its customer base by almost a third in the past 12 months to 14.3 million. In the first quarter of 2004 alone, T-Mobile USA recorded almost 1.2 million new customers – 93 percent of whom are fixed-term contract subscribers – and recorded the second largest subscriber growth among the six national U.S. mobile communications companies. The proportion of fixed-term contract subscribers at T-Mobile USA rose by slightly more than two percentage points year-on-year to 89.4 percent. In Germany, T-Mobile recorded around 348,000 new customers in the first quarter of 2004, more than half of whom were contract subscribers. The proportion of fixed-term contract subscribers was around 48 percent compared with 47 percent in the same period last year. T-Mobile UK also substantially increased its total number of customers, with over 700,000 new additions, and its churn rate was a low 1.2 percent per month. At T-Mobile CZ, customer numbers increase by 48,000 to a total of 4 million in the first quarter, and at T-Mobile Austria, the customer base remained constant at more than 2 million. At the end of the first quarter of 2004, T-Mobile Netherlands had approximately 2.1 million customers, 123,000 more than at the end of 2003. T-Systems increases earning power

1) EBITDA = Results of ordinary business activities before net financial income / expense, including income related to subsidiaries, associated and related companies, amortization and depreciation, and before other taxes; for a detailed explanation of these figures, see Reconciliation of pro forma figures at www.telekom.de 2) For detailed information, see Reconciliation of pro forma figures at www.telekom.de 3) Average number of employees

T-Systems' total revenue decreased by around 3.3 percent to EUR 2.5 billion in the first quarter of 2004. This reflects the deconsolidation effects resulting from the sale of TELECASH GmbH, Siris S.A.S., MultiLink SA and T-Systems Card Services AG, as well as the continued difficult market environment. Revenue adjusted for deconsolidation effects (approximately EUR 93 million) amounted to EUR 2.467 billion, a year-on-year increase of around 0.3 percent. The IT segment showed positive revenue development, both in national and international business. The growth in net revenue at T-Systems is particularly positive. Unadjusted, it increased by 0.4 percent and, taking deconsolidation effects into consideration, by 6.1 percent. The increase in adjusted EBITDA of over 5 percent, or around EUR 15 million, to EUR 301 million in the first quarter underlines the improvement in T-Systems' operating performance. This is mainly due to the continuous streamlining of cost structures, as well as to constant efficiency gains. The information and communication technology provider reduced both its personnel costs and selling costs in the quarter under review. The adjusted EBITDA margin consequently improved by one percentage point to 12.2 percent. T-Online considerably boosts EBITDA

1) EBITDA = Results of ordinary business activities before net financial income / expense, including income related to subsidiaries, associated and related companies, amortization and depreciation, and before other taxes; for a detailed explanation of these figures, see Reconciliation of pro forma figures at www.telekom.de 2) For detailed information, see Reconciliation of pro forma figures at www.telekom.de 3) Average number of employees 4) The T-Online figures shown here were calculated in line with the provisions of German GAAP, as applied throughout the Deutsche Telekom Group, and do not correspond to the figures published by T-Online International AG in accordance with IFRSs, as T-Online International AG and Deutsche Telekom AG do not apply the same accounting policies

Year-on-year, T-Online increased its revenue by almost EUR 48 million, or just under 11 percent, to EUR 493 million in the first quarter of 2004 (figures in line with German GAAP). This increase was mainly attributable to continued customer growth. In the same period, EBITDA improved by just under 60 percent, from EUR 75 million to EUR 119 million, setting a new record in the history of T-Online. This improvement is mainly due to the lower cost of sales (incl. goods and service purchased) and savings generated through a reduction in sales expenses. In the first quarter of 2004, T-Online increased its number of customers by around 1 million year-on-year to approximately 13.4 million. The key driver behind this growth in subscribers is the wide range of innovative broadband content offerings. Foreign subsidiaries accounted for around 2.4 million of the total number of customers. In the "Germany" segment, the customer base increased to 11.07 million customers. The proportion of broadband subscribers rose considerably from 2.1 million in the first quarter of 2003 to 2.7 million in the first quarter of 2004 – an increase of almost 32 percent. In the interest of greater transparency, T-Online International AG has restructured the presentation of its key performance indicators. The division now reports its subscriber numbers for the whole of Europe, differentiated according to DSL and narrowband rate plans. All necessary information for the reconciliation of historical data is also integrated in the new disclosure format. Group Headquarters & Shared Services

1) EBITDA = Results of ordinary business activities before net financial income / expense, including income related to subsidiaries, associated and related companies, amortization and depreciation, and before other taxes; for a detailed explanation of these figures, see Reconciliation of pro forma figures at www.telekom.de 2) For detailed information, see Reconciliation of pro forma figures at www.telekom.de 3) Average number of employees

At around EUR 1.1 billion, the total revenue generated by Group Headquarters & Shared Services in the first quarter of 2004 is at the same level as in the previous year. The decrease in revenue from the Billing Services segment was largely offset by higher revenues from Vivento's new call center business. At EUR ‑130 million, adjusted EBITDA fell below the previous year's level of EUR ‑10 million, mainly due to the higher expenses incurred by Vivento. EBITDA was EUR ‑163 million – less than the figure recorded in the first quarter of 2003. It should be noted, however, that prior-year EBITDA had been positively affected by income from the sale of investments and the transfer payments made by T-Com for employees transferred to Vivento. The special factors for the first quarter of 2004 include accruals of around EUR 33 million for the newly instituted severance program for Vivento. At March 31, 2004, Vivento, the personnel and business service provider, accounted for around 20,100 employees, of which around 600 were permanent staff, approximately 16,400 transferred employees and about 3,200 employees in the newly created business line. Of the employees for placement, about 4,500 were in temporary positions within the Group at March 2004, and approximately 700 outside the Group. Around 1,700 employees have left Vivento since the beginning of the year. Within the framework of the 2004 collective bargaining round, Deutsche Telekom has agreed an employment alliance with the services union ver.di which will affect 120,000 DTAG employees. Under the terms of the agreement, weekly working hours are to be reduced from 38 to 34 with a partial reduction in salaries, creating capacity for 10,000 jobs. Employees transferred to Vivento are to receive 85 percent of their current annual pay. The agreement not to make any compulsory redundancies is being extended to 2008. Outlook for 2004 Deutsche Telekom expects to achieve its target for adjusted Group EBITDA of at least EUR 19.2 billion for the full 2004 financial year. Of this amount, T-Com is expected to account for EUR 10.7 billion, compared with EUR 10.4 billion in 2003. An increase in adjusted EBITDA from EUR 6.7 billion to EUR 7.8 billion is planned for T-Mobile. T-Systems is scheduled to make an EBITDA contribution of EUR 1.5 billion, compared with EUR 1.4 billion in 2003. T-Online plans a further increase in EBITDA from around EUR 0.3 billion to around EUR 0.4 billion. Group Headquarters & Shared Services is expected to generate negative EBITDA of EUR 0.9 billion. The difference of around EUR 0.3 billion between the total of the individual figures and the planned figure for adjusted EBITDA for the Group as a whole is accounted for by the reconciliation. Forecasts for the development of capital expenditures and free cash flow also remain unchanged. Around EUR 7 billion has been earmarked for capital expenditures, with the possibility of increasing this figure by up to EUR 1.5 billion if potential investments will increase the value of the Group. Free cash flow is scheduled to total at least EUR 6 billion. Numbers of customers

Totals calculated on the basis of precise figures and rounded to millions 1) Telephone channels, including for internal use 2) Subscriber-line figures are recorded including MATÁV’s subsidiary Maktel 3) Including Virgin Mobile 4) Percentages calculated on the basis of figures shown. 5) Mobile subscribers reported including Mobimak for the first time 6) Number of subscribers of T-Mobile’s fully consolidated mobile communications companies, plus majority-owned companies of MATÁV and HT - Hrvatske telekomunikacije Mobimak subscriber figures reported for the first time as of March 31, 2004. prior-year figures have been adjusted

Journalists can access additional information at: http://www.deutschetelekom.com This press release contains forward-looking statements that reflect the current views of the Deutsche Telekom management with respect to future events. Forward-looking statements are based on current plans, estimates and projections, and therefore too much reliance should not be placed on them. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom's control, including those described in the sections "Forward-Looking Statements" and "Risk Factors" of the Form 20-F submitted to the U.S. Securities and Exchange Commission. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, Deutsche Telekom's actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom does not assume any obligation to update forward-looking statements to take new information or future events into account. In addition to the figures shown in accordance with German GAAP, Deutsche Telekom also shows so-called pro forma figures, e.g., EBITDA, adjusted EBITDA, net debt, and free cash flow. These pro forma financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with German GAAP. For a definition of these pro forma figures, please refer to the explanations under "Reconciliation to pro forma figures" on Deutsche Telekom's Investor Relations website at http://www.deutschetelekom.com