Deutsche Telekom Investor Day. Southern & Eastern Europe. March - PowerPoint PPT Presentation

Deutsche Telekom Investor Day. Southern & Eastern Europe. March 18, 2010 Guido Kerkhoff 1

Disclaimer. This presentation 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. You should consider them 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, including those described in the sections “Forward-Looking Statements” and “Risk Factors” of Deutsche Telekom’s Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission. 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 and 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 writedowns 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. 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 income, 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. For further information relevant to the interpretation of these terms, please refer to the chapter “Reconciliation of pro forma figures”, which is posted on Deutsche Telekom’s Investor Relations webpage at www.telekom.com. 2

Impressive footprint in Southern and Eastern Europe. N o 2 1 2 1 N o Slovakia N o 1 1 1 1 The Region Top Market Position N o 3 N o Hungary 1 3 1 Mobile: 6 x N o 1 N o 1 Fixed: 7 x N o 1  9 countries 1 1 1 N o 2 x N o 2 Romania  Population of > 65 mn N o Croatia 1 x N o 3 Serbia Bosnia and Financials 2009 N o 1 2 2 1 1 Herzegovina 1 N o Customer Figures 2009  €9.7 bn revenues N o N o 1 1 1 1 Monte- Bulgaria Kosovo 15% of Group Revenues negro  Fixed Network Access lines: 11.9 mn 1 1 N o  €3.8 bn adj. EBITDA Macedonia  Broadband Access lines: FYR N o 19% of Group EBITDA N o 1 3.8 mn, thereof retail 3.5 mn 1 1 1 Albania  IPTV 425k customers, TV total 1.9 mn High Profitability N o  Mobile: 34.6mn customers: Greece  40% adj. EBITDA Margin More than 50% of SEE population 2009 at > 43% w/o OTE is a DT mobile customer 3 1) By customer numbers. Source: company reports, in Bulgaria DT estimate due to lack of public data.

Strong market position translating into high profitability. Revenue Telco market (organic) SEE core market revenue (organic) EBITDA Telco market (organic) Average DT share 2008 DT market share 2009e 2008 2009e Marketshare by country x% 2009 e x% 40% 38% 41% MOBILE Market 38% Total Telco Market 50% 51% 54% 55% FIXED Market 79% 77% 79% 78% Other SEE all GR HU HR SK RO SEE all SEE all SEE all countries 2 4 1) DT revenues: only core markets (connectivity markets); organic = FX-adjusted; Source: BCG market Data.

Content. SEE Macroeconomics/ SEE’s Strategy Country-by-Country competitive situation Implementation Program overview 5

Macroeconomic Situation. GDP Growth 2005-2009 1 Organic revenues 2007-2009 2 8 Avrg. Growth 10.8 10.9 10.5 2008: +3% 4 +0.6% 2 -3.8% 2 0 2008 2009 2005 2006 2007 8pp -4 2007 2008 2009 Bulgaria Hungary Slovakia Avrg. Growth Greece Romania Croatia 2009: -5%  2008: Stable revenues in times of growth  2009: only 3.8% revenue decline at an average drop of 8pp in GDP growth 1) Source BCG-Analysis 6 2) FX-adjusted on average 2007 F/X rates; OTE proforma estimate incl. January 2009

Challenges through fierce competition in different areas. TV players offering voice and broadband Slovakia Aggressive Aggressive regional 4play offer 3play offers Hungary Romania Croatia Prepay price Bosnia and Herzegovina competition Serbia Bulgaria Monte- negro Kosovo FYR Discount provider Increasing attacks from Macedonia strong competitors Albania Crisis as a chance Greece for No. 3 players Prepay price competition 7

Content. SEE Macroeconomics/ SEE’s Strategy Country-by-Country competitive situation Implementation Program overview 8

SEE’s Fix – Transform – Innovate strategy implementation program. TRANSFORM INNOVATE Build networks and Strategy DTAG Leverage One Company Connected Life across Connected Work with processes for in integrated assets all screens unique ICT solutions the Gigabit Society 1 Customer life time value 5 Optimize access 8 Leverage three screens 11 Business customer strategy segment Channel mix & Defend price premium 2 9 differentiate service Align wholesale Defend price premium 6 9 Measures Grow beyond core 10 approach Customer centric Grow beyond core 3 10 organization Drive cost efficiency 7 Platforms consolidation 4 Drive cost efficency 7 9

SEE’s Fix – Transform – Innovate strategy implementation program. TRANSFORM INNOVATE Build networks and Strategy DTAG Leverage One Company Connected Life across Connected Work with processes for in integrated assets all screens unique ICT solutions the Gigabit Society 1 Customer life time value 5 Optimize access 8 Leverage three screens 11 Business customer strategy segment Channel mix & Defend price premium 2 9 differentiate service Align wholesale Defend price premium 6 9 Measures Grow beyond core 10 approach Customer centric Customer centric Grow beyond core 3 10 organization organization Drive cost efficiency 7 Platforms consolidation 4 Drive cost efficency 7 10

Integration nearly completed in SEE ex OTE subsidiaries. New integrated structure Hungary Fixed Business Mobile Business March 2006 Sales:  Integrated own shop network  Systematic development of an integrated online platform Montenegro May 2009 Customer Service  Operational excellence in customer service, including multi and Self Service: Croatia skilled agents for fixed and mobile Jan. 2010 Value Based  Optimization of sales channel mix (short and long term) steering:  Integrated sales commission system Slovakia July 2010 Bundle Products  Dedicated bundles for specific customer demand FYRO 1 Macedonia and FMC:  Discount offerings Mid 2010 1) Former Yugoslavian Republic of Macedonia 11

SEE’s Fix – Transform – Innovate strategy implementation program. TRANSFORM INNOVATE Build networks and Strategy DTAG Leverage One Company Connected Life across Connected Work with processes for in integrated assets all screens unique ICT solutions the Gigabit Society 1 Customer life time value 5 Optimize access 8 Leverage three screens 11 Business customer strategy segment Channel mix & Defend price premium 2 9 differentiate service Align wholesale Defend price premium 6 9 Measures Grow beyond core 10 approach Customer centric Grow beyond core 3 10 Drive cost efficiency organization Drive cost efficiency 1 7 7 Platforms consolidation 4 Drive cost efficiency Drive cost efficency 1 7 12

Save4Service@SEE: Reduction of SEE cost base by € -0.3 bn. OPEX SEE 2010-2012 Measures (bn €)  Adjusted net savings: €0.3 bn 1 6.4 *  Gross savings volume: €0.5 bn -0.3 1  Bundling of regional efficiency initiatives in 3 overarching program streams  Sales/marketing/channel mix (25%) 6.1  Network/IT/field services (25%) 6.3  End-to-end processes & other (50%)  Reinvest to strengthen competitiveness and realize growth according to local market strategy YE09 2012 * Adjusted for € +0.5 bn M&A effects: mainly OTE Group fully consolidated from Feb. 2009, Zapp (Romania) fully consolidated from Nov. 2009, PosAm fully consolidated from February 2010. 13