Q1 results: T-Mobile Group with strong growth

• T-Mobile Group posts strong growth in revenue in first quarter of 2006
• T-Mobile Deutschland now has 30 million customers - market leadership defended despite difficult market climate - T-Mobile@home successful:  already over 515,000 customers
• T-Mobile UK records highest rate of growth in contract customers company history
• T-Mobile USA: over a million new customers, plus 50 percent increase in EBITDA

Bonn, May 11, 2006 - The T-Mobile Group increased its revenue by around 12 percent, or EUR 0.8 billion in the first quarter. With revenue up 29 percent, T-Mobile USA was the main growth driver. T-Mobile International`s earnings before interest, taxes, depreciation and amortization (EBITDA) were also on track, increasing by 0.2 billion to 2.3 billion EUR (increase of 8 percent). The Group's EBITDA margin was 30.1 percent.

The number of customers in the T-Mobile companies rose by 1.1 million from 86.6 million to 87.7 million by the end of the first quarter. A substantial proportion of customer growth was generated by T-Mobile USA with more than one million new customers, T-Mobile UK with 400,000 customers and T-Mobile Deutschland with around 300,000 new customers.

Details on individual national companies:

Germany
T-Mobile Deutschland continued to hold its own against increasingly tough competition despite the difficult market climate and its customer base exceeded the 30 million mark in the first quarter of 2006 (up 9.7 percent compared to the year-ago period). In addition to 284,000 new customers, this figure also included 440,000 so-called "machine-to-machine" cards, which are used for automatic data communication, for example, between machines and their control unit. The decline in ARPU (average revenue per user) to EUR 20 is mainly due to the consistently fierce price competition in Germany and the cut in termination charges last December. To counteract these market developments, T-Mobile Deutschland has introduced a number of new products. These have already shown initial success beyond original expectations.

The T-Mobile@home calling plan introduced in January 2006 was particularly popular. By the end of the reporting period, over 515,000 customers had subscribed to the service, which allows customers to make calls from four cents per minute within their defined zone

Customer acquisition costs decreased by 15 percent from 107 to 91 EUR compared to the previous year.

USA
T-Mobile USA again acquired the most new customers in the past quarter. With 22.7 million customers, the US subsidiary's customer base was up by one million on the previous quarter. For the first time, EBITDA was higher at T-Mobile USA than T-Mobile Deutschland (EUR 0.9 billion compared with EUR 0.8 billion). In the previous quarter EBIDTA was still around 600 EUR.

Great Britain
T-Mobile UK secured 379,000 new customers in the quarter under review. The Flext calling plan introduced at the beginning of March was especially popular, resulting in particular in the high percentage of contract customers in new customer business: 266,000 new customers is a new high in the number of contract customers acquired in one quarter. With the Flext tariff, T-Mobile UK was able to establish 18-month contracts instead of the usual 12-month contracts. The reported decline in customers of 0.8 million is attributable to the change in the recognition of Virgin Mobile customers. Whereas previously all customers who used their cell phone in the past 365 days were included, a stricter regulation - according to which T-Mobile UK has always reported - now also applies for Virgin Mobile customers from the first quarter of 2006: Only those using their phone during the past 180 days are counted as customers. This effect more than compensated for the large increase in customers on the market. The recognition of key accounts, which were previously recorded uniformly as fixed-term contract customers, also changed. From the first quarter of 2006, these customers were broken down according to the nature of their contract into fixed-term contract customers and prepay customers.  The entire wholesale customer base was therefore reviewed as at January 1, 2006 and 458,000 customers from the fixed-term contract customer base assigned to the prepay customer base. T-Mobile UK stabilized its ARPU at EUR 26 compared with the previous quarter.

Other T-Mobile countries (Croatia, Netherlands, Austria, Slovak Republic, Czech Republic, Hungary)
Revenue development was particularly positive at the national companies in Croatia, the Czech Republic and the Slovak Republic with a double-digit increase. ARPU-related revenue rose or was maintained in all national companies.  New customer growth as much as doubled quarter-on-quarter in some parts of Eastern Europe. 
 

Key figures for the T-Mobile Group (incl. fully consolidated subsidiaries)
(Financial figures of T-Mobile including consolidation effect, unaudited

Customers(thousands)	Q1/05	Q4/05	Q1/06	Delta% Q1/06 vs. Q1/05	Delta% Q1/06 vs. Q4/05
T-Mobile International1,2	79,043	86,616	87,675	10.9	1.2
T-Mobile Deutschland (GER)2	27,560	29,523	30,246	9.7	2.4
T-Mobile USA	18,271	21,690	22,725	24.4	4.8
T-Mobile UK1	16,117	17,158	16,361	1.5	-4.6
T-Mobile Netherlands	2,222	2,317	2,329	4.8	0.5
T-Mobile Austria	2,041	2,090	2,095	2.6	0.2
T-Mobile CZ (Czech Republic)	4,390	4,634	4,648	5.9	0.3
T-Mobile Hungary	4,052	4,194	4,222	4.2	0.7
T-Mobile Slovensko (Slovakia)	1,885	2,022	2,010	6.6	-0.6
T-Mobile Hrvatska (Croatia)	1,550	1,903	1,957	26.3	2.8
Others (Macedonia/Montenegro)	955	1,085	1,080	13.1	-0.5

 

Total Revenues (millions of EUR)	Q1/05	Q4/05	Q1/06	Delta% Q1/06 vs. Q1/05	Delta% Q1/06 vs. Q4/05
T-Mobile Deutschland (GER)	2,074	2,207	2,004	-3.4	-9.2
T-Mobile USA	2,598	3,323	3,354	29.1	0.9
T-Mobile UK	988	1,094	1,032	4.5	-5.7
T-Mobile Netherlands	256	277	271	5.9	-2.2
T-Mobile Austria	222	220	217	-2.3	-1.4
T-Mobile CZ (Czech Republic)	217	253	240	10.6	-5.1
T-Mobile Hungary	256	274	257	0.4	-6.2
T-Mobile Slovensko (Slovakia)	86	102	100	16.3	-2.0
T-Mobile Hrvatska (Croatia)	101	125	116	14.9	-7.2
Others (Macedonia/Montenegro)	31	45	42	35.5	-6.7

 

ARPU Revenues(millions of EUR)	Q1/05	Q4/05	Q1/06	Delta% Q1/06 vs. Q1/05	Delta% Q1/06 vs. Q4/05
T-Mobile International	5,771	6,640	6,538	13.3	-1.5
T-Mobile Deutschland (GER)2	1,861	1,969	1,804	-3.1	-8.4
T-Mobile USA	2,086	2,642	2,741	31.4	3.7
T-Mobile UK	820	901	881	7.4	-2.2
T-Mobile Netherlands	233	257	255	9.4	-0.8
T-Mobile Austria	210	207	209	-0.5	1.0
T-Mobile CZ (Czech Republic)	206	225	228	10.7	1.3
T-Mobile Hungary	234	241	236	0.9	-2.1
T-Mobile Slovensko (Slovakia)	79	92	94	19.0	2.2
T-Mobile Hrvatska (Croatia)	94	113	106	12.8	-6.2
Others (Macedonia/Montenegro)	29	43	40	37.9	-7.0

 

Adjusted EBITDA(millions of EUR)	Q1/05	Q4/05	Q1/06	Delta% Q1/06 vs. Q1/05	Delta% Q1/06 vs. Q4/05
T-Mobile International	2,111	2,488	2,280	8.0	-8.4
T-Mobile Deutschland (GER)	825	934	790	-4.2	-15.4
T-Mobile USA	603	929	917	52.1	-1.3
T-Mobile UK	277	305	166	-40.1	-45.6
T-Mobile Netherlands	26	62	21	-19.2	-66.1
T-Mobile Austria	62	46	59	-4.8	28.3
T-Mobile CZ (Czech Republic)	108	88	108	0.0	22.7
T-Mobile Hungary	99	101	103	4.0	2.0
T-Mobile Slovensko (Slovakia)	40	33	51	27.5	54.5
T-Mobile Hrvatska (Croatia)	51	50	47	-7.8	-6.0
Others (Macedonia/Montenegro)	16	19	22	37.5	15.8

 

EBITDA margin adjusted3 (in %)	Q1/05	Q4/05	Q1/06	Delta Q1/06 vs. Q1/05	Delta Q1/06 vs. Q4/05
T-Mobile International	31.3%	31.6%	30.1%	-1.2%p	-1.5%p
T-Mobile Deutschland (GER)	39.8%	42.3%	39.4%	-0.4%p	-2.9%p
T-Mobile USA	23.2%	28.0%	27.3%	4.1%p	-0.7%p
T-Mobile UK	28.0%	27.9%	16.1%	-11.9%p	-11.8%p
T-Mobile Netherlands	10.3%	22.4%	7.7%	-2.6%p	-14.7%p
T-Mobile Austria	27.8%	20.9%	27.2%	-0.6%p	6.3%p
T-Mobile CZ (Czech Republic)	50.0%	34.8%	45.0%	-5.0%p	10.2%p
T-Mobile Hungary	38.5%	36.9%	40.1%	1.6%p	3.2%p
T-Mobile Slovensko (Slovakia)	47.0%	32.4%	51.0%	4.0%p	18.6%p
T-Mobile Hrvatska (Croatia)	50.3%	40.0%	40.5%	-9.8%p	0.5%p

 

ARPU4 (EUR/month)	Q1/05	Q4/05	Q1/06	Delta% Q1/06 vs. Q1/05	Delta% Q1/06 vs. Q4/05
T-Mobile International	26	28	27	3.8	-3.6
T-Mobile Deutschland (GER)2	23	23	20	-13.0	-13.0
T-Mobile USA	39	42	41	5.1	-2.4
T-Mobile UK	26	28	26	0.0	-7.1
T-Mobile Netherlands	35	37	37	5.7	0.0
T-Mobile Austria	34	34	33	-2.9	-2.9
T-Mobile CZ (Czech Republic)	16	16	16	0.0	0.0
T-Mobile Hungary	19	20	19	0.0	-5.0
T-Mobile Slovensko (Slovakia)	14	15	16	14.3	6.7
T-Mobile Hrvatska (Croatia)	20	21	18	-10.0	-14.3

 

SACs per gross add (in EUR)	Q1/05	Q4/05	Q1/06	Delta% Q1/06 vs. Q1/05	Delta% Q1/06 vs. Q4/05
T-Mobile International	130	95	115	-11.5	21.1
T-Mobile Deutschland (GER)	107	81	91	-15.0	12.3
T-Mobile USA	149	118	124	-16.8	5.1
T-Mobile UK	157	95	148	-5.7	55.8
T-Mobile Netherlands	194	129	225	16.0	74.4
T-Mobile Austria	133	154	127	-4.5	-17.5
T-Mobile CZ (Czech Republic)	26	38	31	19.2	-18.4
T-Mobile Hungary	35	30	26	-25.7	-13.3
T-Mobile Slovensko (Slovakia)	37	35	26	-29.7	-25.7
T-Mobile Hrvatska (Croatia)	61	81	53	-13.1	-34.6

 

Blended monthly churn (in %)	Q1/05	Q4/05	Q1/06	Delta Q1/06 vs. Q1/05	Delta Q1/06 vs. Q4/05
T-Mobile International	2.0%	2.1%	2.1%	0.1%p	0.0%p
T-Mobile Deutschland (GER)	1.4%	1.6%	1.5%	0.1%p	-0.1%p
T-Mobile USA	2.8%	2.9%	2.7%	-0.1%p	-0.2%p
T-Mobile UK	2.6%	2.8%	3.2%	0.6%p	0.4%p
T-Mobile Netherlands	3.7%	3.0%	2.9%	-0.8%p	-0.1%p
T-Mobile Austria	1.9%	1.7%	1.9%	0.0%p	0.2%p
T-Mobile CZ (Czech Republic)	1.2%	1.3%	1.6%	0.4%p	0.3%p
T-Mobile Hungary	1.3%	1.7%	1.3%	0.0%p	-0.4%p
T-Mobile Slovensko (Slovakia)	2.3%	1.7%	2.1%	-0.2%p	0.4%p
T-Mobile Hrvatska (Croatia)	1.1%	1.1%	1.0%	-0.1%p	-0.1%p

Note:
- 1 As of Q1/06 we have changed the way of including Virgin Mobile customers. Before, we had included Virgin Mobile customers on a 365 day churn basis. We have changed this as of the beginning of the year to a 180 day churn basis to be in line with the churn of our own customers.
- 2 As of Q1/06 TMD customers incl. 440k m2m.
- 3 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. EBITDA adjusted for special factors.
- 4. ARPU: (average revenue per user) consists of the monthly charge plus voice, non-voice and roaming revenues. Unlike the reporting of some competitors, visitor revenues are not included.

This press release contains forward-looking statements that reflect the current views of the Deutsche Telekom management with respect to future events. This includes statements on market potential and the planned merger of T-Online, as well as the "Outlook for 2006" at the end of this press release. Forward-looking statements are based on current plans, estimates and projections, and therefore too much reliance should not be placed on them. Forward-looking 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" on Form 20-F contained in the Annual Report submitted to the U.S. Securities and Exchange Commission. These factors include the progress of Deutsche Telekom's workforce reduction program and the impact of other strategic decisions or significant initiatives, such as acquisitions, dispositions and business combinations. In addition, stronger than expected competition, technological change, litigation and regulatory developments, among other factors, may have a material adverse effect on costs and revenue development. 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 can offer no assurance that its expectations or targets will be achieved. Deutsche Telekom does not assume any obligation to update forward-looking statements to take new information or future events into account or otherwise.

In addition to the figures shown in accordance with IAS/IFRS, Deutsche Telekom also shows so-called pro forma figures, e.g. EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted EBT, adjusted net income, special factors, free cash flow, free cash flow (before the acquisition of network infrastructure and spectrum in the United States), leverage, net financial liabilities, net financial liabilities/adj. EBITDA and the adjusted figures on the page entitled "FY 2005 - consolidated net profit". These pro forma financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IAS/IFRS. Pro forma figures are not subject to IAS/IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways. For a definition of some of these terms, please refer to the explanations under "Reconciliation to pro forma figures" on Deutsche Telekom's Investor Relations website (www.telekom3.de) under "Publications".

T-Mobile Czech Republic, a member of the international telecommunications group Deutsche Telekom, has almost 6.2 million customers, the number-one operator in the Czech market. T-Mobile is an integrated operator: in addition to telecommunications services, it offers comprehensive ICT solutions not only for companies, but also for other organizations and individuals. It provides outstanding services in the high-speed network, which was proved repeatedly by benchmark testing performed by umlaut (former P3) with Best-in-Test seal.

T-Mobile Czech Republic places emphasis on taking a responsible approach to the environment and society. It adheres to fair business practices, helps beneficial applications and services to see the light of day, supports non-profit organizations, small businesses and individuals, and lends a helping hand whenever crisis situations arise. The company’s employees serve as volunteers in many places across the entire Czech Republic.

More information about the company is available at www.t-mobile.cz, www.t-press.cz (the portal for journalists) and www.t-mobile.cz/pomahame (information on the company’s CSR activities).

Contact details of the press unit: press@t-press.cz.