DTE Energy Company Price & Performance (DTE)

As you can see with me today is our CEO, Tim Hirtges and our CFO, Christian Elich. As usual, Tim will first go through his highlights of the year followed by Christian, who will talk more about the quarterly performance and the group financials. After this, we have time for Q and A. Before I hand over to Tim, please pay attention to our usual disclaimer, which you find in the presentation. And please also note that this conference will be recorded and uploaded to the Internet. And with that, it's my pleasure to hand over to Tim. Thank you, Hannes, and welcome to the fourth quarter and full year 2024 results call. Look, we can deeply go into the numbers but let me say, we are celebrating our 30 birthday at Deutsche Telekom. I know you're not very romantic, but for us, it's quite a journey of thirty years, Deutsche Telekom. And we had intense discussion this morning with the press around that one, and we're going to celebrate that throughout the year. And the good thing is that we are going to start, let's say, with a record year into this anniversary here. And in some you have seen the numbers, it was a very good overall track record throughout the businesses.

It is the highest EBITDA, the highest free cash flow and the highest adjusted earnings in our company's history, which we are able to present today. We made great progress along the priorities we outlined at our October Capital Markets Day, be it on fiber, being it on the mobile technology leadership, being it on customer service, and customer experience and being on artificial intelligence. But I can tell you one thing. These are just in its infancy. We are just beginning here. And I'm already pushing a lot, so that we should accelerate on these topics. Our financial performance also in the fourth quarter was on track for the targets we outlined at the Capital Markets Day. And on January 29, T Mobile reported already their strong results and provided a very positive outlook for 2025. We are completing this picture today. With our Ex U. S. And our group results, and we provide you with our guidance of the group as a whole. Again, in 2024, our group developed quite nicely, 3.7% organic service revenue growth, we had 6% organic EBITDA growth. 19% growth on free cash flow, and 19% growth in adjusted earnings per share. So I think this is remarkable.

And I know that if you compare us with the European industry, it's anyhow leading. During the year, we announced more than EUR 10,000,000,000 are of M and A investments in The U. S. Be it wireless in advertising or in fiber. It shows the attractive hardness of The U. S. Market at that point in time and even our willingness to grow beyond connectivity businesses here. And we are very happy where we are here. One month ago, our stake in T Mobile U. S. Was back to 51.5%. Also good news for you. We took decisions to evolve our leadership team at the same time, and you have seen the notes while providing stability in our organization, this kind of uncertain times here. And I'm happy to tell you that I extended my contract until 2028. I hope you are happy about it. And so Srini will now join T Mobile U. S. As the Chief Operating Officer. He will bring a lot of expertise in fiber. A lot of expertise in the relation between the motherhoods. And he will as well help us by realizing synergies within the group in an easier way. And as his successor, we have nominated Rodrigo Diehl, as the new Head of Germany.

He's a quite international manager, He was born in Argentina He grew up with McKinsey and with Millicom. He was Head of Panama. He was in our organization in the and the European organization, heading the B2C. Marketing Segment, And He Was In Austria running the business over the last year. So quite experienced guy who is now joining us here in the German environment. Overall, our total shareholder return, as you know, that was 38%. Last year. And our shares recently reached a new twenty four year high. €35 yesterday. So these are good news. I understand today we had some dropbacks on this one and let's understand what the reason for that were. But in principle, we are very optimistic with regard to 2025. And with regard to the guidance and with regard to our Capital Markets Day commitments, so I'm not looking on a day. I'm looking on a long term trajectory, and this trajectory is on the share price very, very good. So again, this was another good year for Deutsche Telekom and its shareholders Deutsche. And there is much more to come, and I will talk about my priorities in a second. As usual, let's take a closer look first on the organic figures.

On Page five. And what you can see here, are the elements of the segments. And obvious to see all segments are growing. The organic group revenue grew by 3.7%, excluding The U. S. The growth would have been 2.9%. Our core EBITDA grew by 6.5% And excluding The U. S, it's a remarkable growth of 6% which we were able to show here as well. T Mobile grew its adjusted core EBITDA by 8.3%. Europe grew by 8.1%. Germany by 2.6% and just our fastest growing segment. And you know that for me, there is always a ranking of everything I'm doing. The best in class from a percentage perspective was T Systems with a growth of 12.3%. EBITDA growth. Now we know that this is on a small basis, but nevertheless, it's another turnaround story within Deutsche Telekom, and I'm very happy what this team has achieved so well done to systems. The systems may not be so important from the value contribution. But for us, they are very relevant when it comes to being a differentiated telco in the B2B space. Because we are running cloud, which is getting more and more relevant in today and so future, And we are running digital service or developing applications for our customers Both are things other telcos don't have.

So this is getting more and more relevant. And in both areas, we're applying a lot of AI and we have a lot of AI expertise, which we can then as well use for the group. So the contribution of the systems getting more and more important over the next years. Moving on to our networks. And you know this is my my favorite topic. The last twelve months, we've passed 3,300,000 additional European homes with fiber to the home. And now we reach over 20,000,000 homes in our European footprint here. In Germany, we have achieved our targets of the 10,000,000 households, including the joint ventures and our corporations. And this despite all the headwinds this German fiber market was facing, So we keep on track. Our mobile networks as well remains leading across the footprint. Existing German network modernization program is well underway. You saw that from Srini and Abdul, the presentation about our leadership in the way we are using spectrum, Project Nemo In The U. S, our network leadership remains uncontested, and we are further extending our technology leadership here as well with the public beta launch of direct to sell satellite communications. Now you would immediately ask why don't you have a Starlink deal for Europe yet?

Look, the answer is very simple because if you have a 98 coverage of five gs services in Germany, you don't have so much uncovered areas. We are going this area is more for FMS solutions. If needed while using satellites. But in The U. S, 400,000 square kilometers uncovered areas as a whole. And therefore, the satellite connectivity makes a lot of sense as an adjacent technology, network of networks. Remember, that was the term which I used a couple of years ago is is coming live. Our customer growth continues. Both in The U. S. And both in our European entities, all of them. You can see in Page 34, by the way, the consistency of our customer growth over many, many years. So there's no reason that we see a slowdown or whatever. You have obviously some seasonal effects. Or some competitive effect. But overall, our growth rate is quite intact Our subscriber growth on postpaid is strong 6,000,000 post paid net adds in The U. S. And 2,000,000 in euros in Europe. So another €8,000,000 postpaid customers gained in 2020 The fourth quarter saw year on year improvements in churn. That is remarkable that we are even further reducing our churn both in Germany and in The U. S. To, I think, an all time low in this area.

In Germany, we consistently delivered near 300,000 new mobile net adds, in the quarter, benefiting from our successful segmentation and our clear leadership. By the way, it's standing on three pillars. There's a B2B area. There is definitely our direct business, which which we have and then there is Konsta as well. So we have different segments here, which we are working on. And this is always good that you have different legs. In The U. S, we issued the highest initial postpaid net adds guidance ever. For this year. We benefit from our leadership both in value and in quality. And we keep on running and continue this development. TV net adds were as well in '24 stronger than the year before. That was mainly driven by the German business. And here, that was the European Championship, which helped us But please be aware, in this 437,000 net adds, there are 300,000 not included This is over the top services that 300,000 customers downloaded our app and using our app. On the different TV screens, even this one is not included in the numbers which you see here. Broadband net adds were slower than last year. And I think this is a little bit, let's say, the black could have been better.

This is mainly driven by Germany. Fiber net adds not shown here, they accelerated. That's a good message. And by the way, almost doubled compared to the previous year But the broadband net adds were slower, and we have to discuss that later on. Because this is definitely an area where we want to improve our delivery. Moving on to ESG for a sec. Look, despite some strong growth in data usage and the demand in our services increased we were able to reduce our energy consumption for the group by 2%. So assume that we have 30% more data usage in our networks and at the same time, we are able to reduce the consumption of energy by 2%. That shows the efficiency ambitions are the activities which we are driving here. We reduced our CEO emissions by a similar percentage This is good. And if some of you know might question what the heck is Tim talking about, nobody cares about ESG anymore. I can tell you, we won't stop on this topic here because for us, it is more than just a kind of hygiene factor. For this, it's a commercial element because the moment where we can reduce our energy costs, the moment we are able to reduce and increase the efficiency of our architecture here, The moment this has a hard commercial impact and therefore there are more elements that being altruistic.

This is really a big commitment throughout the future. And to our P and L at the same time. Our community contribution, by the way, amounted to SEK 1,100,000,000.0 last year, and there were SEK 34,000,000 beneficiaries, including 6,300,000 students which we connected as part of T Mobile's education initiative another great program. The brand has to be an inclusive brand. And this means we are covering from the super to the ones who cannot afford our service, everybody. We embrace people into our brand, but we can declare that that's nice. And maybe people are believing us, but we have to live it and you have to be committed to this is that why these instruments are so important. Coming to the guidance, our 2025 guidance, The bottom line is that we delivered our EBITDA guidance and we outperformed our guidance for free cash flow and earnings per share in all categories for 2024. Note that our adjusted EPS of €1.9 included €0.07 of non recurring earnings The larger single item here was a $0.04 benefit from an improved tax outlook for our GD Tower joint venture. So this is included in the 190 but even the 183, by the way, friends, the 183 is highly above our original guidance for $2,024,000,000 euros which was €175,000,000 So So outperforming on most of the KPIs, which we guided last year.

So we had this fantastic Capital Markets Day in in October and got great feedback from you guys. Thank you for that. It's a big commitment for me and for all of us going forward. And I just wanted to share what we are doing right now and what are we working on in 2025? What is most important? By the way, there are a lot of other activities we are driving around our flywheel here, but thus let me stress a few of them. So starting with fiber. Look, Our ambition is we will keep the pace of the fiber build out in Germany and in Europe, EUR 2,500,000.0 alone in Germany. And we want to even include fiber joint ventures in The U. S. Hopefully, we're expecting that in the second quarter this year, we get the consolidation of our fiber investments after the approval of them. And then we have even commercial benefits from this activities as well. And then we would see what's happening here on the fiber and the convergence side. But this is a big commitment going forward. And for us, it's very important that we are stepping up on monetization. And we made good progress on this one.

You saw that in the fourth quarter. The fiber take up is severe, and Christian will talk about that in a second. But more to come. In Germany, we want to go beyond 20% this year on the utilization of our infrastructure. The extended infrastructure. And in Europe, we are beyond 30% by the way, 34%. So therefore, there is more to come that we monetize fiber. Second topic on the mobile side, our network is clearly leading on both sides of the Atlantic, but we will not won't rest on our laurels here. We expect we want to extend our lead. In The U. S, with our customer driven coverage build, interesting proposition, I love that. And by the way, we will steal with pride all the ideas from The U. S. Into our entities here as well. And develop them further. In Germany, we are improving our network leadership with our radical network modernization program, NEEMO, So two really big initiatives. I'm not worried at all. That we will not have another year where we will all. By the way, all We are expanding our technology leadership with five gs standalone. In Germany and other markets in satellite connectivity in The U. S. And in Open RAN technologies, so this is just three examples of what we are trying to do.

And at the same time, we are driving everything that we gain more ARPA growth out of this infrastructure because if you have a market leading infrastructure, you should be able to monetize that even beyond your competition. Then another third element, which is very important for us and should discuss that, is the momentum in our B2B area. We presented the different entities, Europe, Germany, Entisystems, And we have spoken about the ambitions here. We have laid the foundation on product side last year, and we see a positive momentum. By the way, mobile is super strong everywhere. On the fixed end, we are making progress. Cybersecurity demand is high. Double digit growth. So there are a lot of, let's say, good developments which we see. But we stay hungry here. So let's see where we make progress this year. [indiscernible] very important for us. This is a centerpiece of our strategy. It's a centerpiece of my belief. To be honest, we had a much better start than most of the telcos. I know that because every a lot of telcos are visiting us and want to understand how we are driving the 500 projects within our entity, I see unbelievable efficiency gains in the workflow optimization I see them on the individual services.

We see that already in The U. S. With the the digital use from our customer side, and the way how we are serving them in a better way I see them in the network autonomy I see them as a cyber element. So I they so much which we can improve faster. And more efficient with AI. This is just the beginning. I think we have to double down. I will push this organization this year much harder on AI and the implementation. By the way, I'm flying out from here to Barcelona. Next week, we will talk about on the Mobile World Congress, we will mostly talk about, let's say, our initiatives and how we're improving and how we are using AI service including our partners. Scaled advantages is another big thing. Our leading size and portfolio gives us a unique opportunity among other players in this industries. Always hear that from my competition here, Tim. The only reason why are you good is because you have The U. S. I said, okay, you could have done the same. But you don't have a U. S. But The U. S. And our European entity gives us a super advantage to scale our businesses.

And we have to prove that. And I want to show that to you how we can do that operating models in IT, in NT, in sourcing. So the element of transatlantic collaborations should be do we want to bring to to a next level? And by the way, that Srini is going there that will help a lot. So the next topic is the leadership team and the how we evolve this team. And I as I said, my contract extension hopefully provides stability in this world. It's good to have that in the new European Commission. It's good to have that with the new government in Germany coming in I think it's even good to have that in The U. S. Because there are a lot of, let's say, uncertainties now in this environment. And as well, I think, good for the team here because the stable management is even stability in our strategy going forward with a clear focus. With Rodrigo, we found an excellent successor for Srini, for Germanin. We will bring him to you when he has to say something. And so Srini is brilliant, highly appreciated in the U. S. Team. They know what they get and and this will help us as well.

So this is just the beginning. To be honest, I'm working on a lot of, let's say, ideas around our leadership team on the second level about how we can re innovate, how we can upskill these people how we can get even more international in this regard. So more to come throughout the year 2025. Our guidance for 2025, and I'm going to be quick, It's based on last year's average foreign exchange. Which is, by the way, 108 That is our foreign exchange rate, which we take into consideration. And it is the same it's the sum of the guidance of DT ex U. S. And for T Mobile U. S. Adjusted, by U. S. GAAP IFRS bridge. And I heard this morning was intensive discussion about this bridge, this IFRS bridge. And this €1,000,000,000 which is in between that. T Mobile issued its guidance on January, and we are using the midpoint the midpoint of their guidance. This guidance is based on an IFRS bridge of SEK 1,000,000,000 in 2025, and at a dollar exchange rate of 1.08. For the DTX U. S. Business, we are guiding for 25% and EBITDA of EUR 15,000,000,000, and we are guiding for €25,000,000,000 of free cash flow of €3,600,000,000 By the way, slightly increasing over the years.

For the group, we are guiding around SEK44.9 billion. EBITDA and SEK 19,900,000,000.0 free cash flow. And for the earnings per share, from €1.9 coming to around $2 sorry, euros for the adjusted earnings per share. So another increase of 9% for 2025. Note, please, that we are no longer guiding the core adjusted EBITDA. Because the handset lease revenues in The U. S. Have become immaterial. So that makes our KPIs more easier to understand. And with this, I hand it over to Christian, who would give you even more details on the '24 numbers. Thanks, Tim, and hello from my side. So as usual, as you know, we're going to start with T Mobile. U. S. We're staying on U. S. GAAP. What you see is that the service revenue has increased year over year to 5.5% growth and is very much driven by the postpaid service revenue growth, which you can see on the callout. That is obviously the foundation for a stunning 10.1% core EBITDA growth in the fourth quarter. So a very, very strong financial performance. From taking a look at the commercial figures, you see that the postpaid additions in the fourth quarter was $1,900,000 And if you add everything together over the course of the year, 2024, it was more than €6,000,000 of net adds, of which 50% roughly 50% is post is phone net adds.

And that momentum obviously led to a guidance of €5,500,000 to €6,000,000 postpaid net additions in 2025, which is the highest ever guidance the U. S. Team has given to the market. What you can also see is that we have a very steady performance on high speed Internet, which roughly 400 plus thousand net additions. So we have now a base of 6,400,000 customers, and I think we're tracking well against the 7,000,000 to 8,000,000 high speed Internet customers by the end of twenty twenty five. Moving to Germany, 33 quarters of consecutive EBITDA growth Despite the fact that we have seen the wage increase beginning of the quarter, the Q4 EBITDA was growing by roughly 2.8% and that gets us to a full year 2.6% growth. You remember we had in Q1 only a 1% EBITDA growth. Our guidance for 2025 is €10,800,000 at billion euros EBITDA, which is pretty much at the same growth rate as we have seen it in the fourth quarter. So we're pretty much in line with what we articulated in the October meeting here in Bonn at the CMD. Moving to what you see on the chart on revenues, obviously, that organic revenues slightly decreased over the quarter.

This is very much driven by lower handset revenues. The service revenue was slightly positive, as we can see on the next page. But it was still sequentially lower than we have seen this in the previous quarters. And the reason being for this is that we actually had an higher expectation of IT revenues in the public sector in the fourth quarter, which didn't turn into business. Which sequentially will move into largely into the upcoming quarters especially in Q1. Mobile service revenue, you see that we're growing pretty much at 2%, which is stable relative to the previous quarter. And despite the fact that the mobile market is quite aggressive, price aggressive for quite some time, I think our performance has been very steady and we remain absolutely confident that we're going to meet our two to 2.5% growth expectation on the long run. So let's move to the fixed line trends on the following pages. So what you can see on Page number 17 is that both broadband and wholesale access revenues grew in line with the previous quarter. Despite The steady growth in broadband revenues, our retail fixed revenues was obviously smaller in this given quarter.

And I explained this by the dip in the IT revenue, especially in the public sector. So we expect a better performance in the upcoming quarter. And we expect that part of this business will eventually turn into business in this given quarter. So if we basically exclude the dip in the IT revenues, I think then the growth rate would have been comparable to the previous quarters. So again, expect an improvement in Q1. Move into the next page. You see some fixed line revenues. Our broadband and TV customer growth has slowed, especially broadband moved down to 16%. Let's be clear, we're below our fair share, which is above 40%. And you know that our clear ambition is always to trend above our fair share of 40%. The sequential decline is obviously due to two impacts which we're seeing right now. The market growth is not at the same level as it used to be a year ago. And we see that the Vodafone performance has actually increased, and you've seen that in their numbers, which they have reported out to you a couple of weeks ago. Where their line losses reduced from negative 33% to negative 7%.

So overall, we will obviously work on this performance to improve it again as especially to be at least on fair share in the upcoming quarters. What we also see is that the net on TV have come down because the rental privilege impact is kind of fading out. But overall, and Tim said it beforehand, we actually achieved 600,000 customers roughly fifty-fifty. One is access bound and the other one is obviously OTT led. So we will maintain momentum here, but don't expect [indiscernible] 24 will replicate and 25. So on the broadband market, let's again step on this one. As we've seen that the market is obviously performing is growing at a slower rate, the importance of having richer mixes in our base is obviously an important thing. And I think what you see on the retail customers on the upper right hand side is that we have increased our customer base which is enjoying access lines of at least 100 megabit per second by 700 ks over the course of the year. It's now representing half of the base in our broadband our base. So now moving to fiber, what you can see is we have a very strong performance on fiber.

So first of all, we have achieved 2,500,000 homes passed in 2024. Secondly, what you see is that the customer growth all up increased from 300,000 in '23 to four seventy thousand in '24, which is an increase of 50 another 100 or we gained another 134,000 customers in the given quarter. And you know that obviously fiber is ultimately important for us because the higher our fiber coverage is, the higher our fiber customer base will be, the better our broadband performance will be. So Let's move over to the mobile commercials. And what you see on the mobile commercials we achieved 260,000 branded net adds. And Tim basically explains coming from three sources, B2C, B2B and Kong This is slightly lower, obviously, relative to the previous quarter. Comparable slightly below the previous year. That's slowdown is actually explainable by B2B. But it's nice to see that despite the very promotional market in Germany, our churn has come down from 0.9% to 0.8% on a monthly basis here in Germany. So obviously, we're still benefiting from our strong brand, our network leadership, our effective segmentations, which we are applying and obviously very much based on our attractive family plans.

Moving over to Europe. I think another excellent quarter wrapping up an excellent year. Our organic revenue was plus 4.3%. Organic EBITDA in the fourth quarter was 7.3%, totally in the year 8.1%. Stunning figures. And these figures are obviously based on the next page on a very solid customer growth across all the different categories, being at mobile broadband, FMC and TV. And the good thing in Europe is it's based on a balance of volume growth and value growth. T Systems on the next page. Very solid quarter. I think you see a positive momentum on the order entry with close to 11% growth. Revenues were only up by 1%, but we had a very good performance on EBITDA. Which was 29%. But you see it's very cyclical how the business develops. So I think the 12% growth rate growth rate, which Tim alluded to, is a better comparable to see that we are basically out of the out of the negative territory in T Systems and that we're moving in So that's pretty much with my operational review. Let's move to the group financials. And you see some good growth across the P and L, but also across the cash flow statement.

Adjusted EPS is up 30% this quarter or 19% over the course of the year. And Tim explained in the adjusted EPS, there's $0.07 of tailwind, $0.04 are coming from a tax benefit, which we have in our tower business. Which is a one off euros are coming from the pension fund gain due to interest rate changes and the last cent is coming from derivatives. The free cash flow is down over the quarter, but it's 19% up over the year. So what you see on a Q4 versus Q4 comparison that Q4 is not very representative for the year. Net debt increased on a yearly basis by €5,000,000,000 of which 6,200,000,000.0 is purely driven by ethics So next chart, are basically the bridges Q4 over Q4. As I mentioned, on free cash flow, this is not representing the full year. It's very much driven by a very low CapEx spend, which we had in the previous year in The U. S. And that drove down the higher spend on a year on year basis. Same holds true on the net profit development that was very much supported by one offs, whether it's been the civil servant health insurance or the tax benefit, which we achieved on our tower business, which is not recurring.

But over [indiscernible] over the course of the year. Moving to Page 25. You see that our net debt has increased by €6,800,000,000 of which €4,700,000,000 is driven by ForEx. The 8% $0.08 increase on the dollar obviously hit us in the fourth quarter.

The average dollar was only $1.08 So that is actually having a negative impact on the leverage all up. And you see that the leverage ex leases basically remained at the same level, which is $2.31. We have a slight improvement relative to 23% to 2.78%, but let's be fair, we intend to be at a maximum of €275,000,000 So we have to work against this. I think that completes my review. And I hand it over to, I guess, Hannes, right? [indiscernible] Correct. Thank you. So thank you, Christian. We start with the Q and A part. And if you like to ask a question via Webex, please press the raise hand function. And if you require to cancel your question, raise the press the raise hand function again. If you're calling on the telephone, it's 3. And if you want to cancel 3 again. And I, of course, will announce your name when it's your turn. And as per our good practice, could you please restrict yourself to two questions?

You obviously have to mute and unmute or first unmute and then mute yourself as appropriately. And so we start with Andrew at the Goldman, please. Yes. Thanks, Hannes.

Afternoon, everyone. I hope you can hear me okay.

I had two questions. The first one I guess fairly obviously is on German competition.

You both said that the competitive environment in mobile is quite aggressive at the moment in Germany. And that's something that your competitors have highlighted too.

The question there is just is the competition in mobile or fixed meaningfully worse than you expect when you set your midterm guide? And if so, how? And then the second question is just on satellites. Around that. I think you basically summarized that you don't see satellites as a massively important partner for Europe. Obviously, quite a lot of interest in the Super Bowl product launch in The U. S. If not a partner, can satellites be a threat to your business in Europe? Any thoughts you could give us on how satellites fit into the telecom outlook in Europe would be great.

Thank you.

Let me start first on the on the competitiveness and the situation. Look, since the Vodafone decision to take the Einsen Einsen National Rhonium contract from Tifel Telefonica, we've seen a step up in the competitive intensity in our markets. I was from the beginning clear that this is a bad deal. And stupid. But anyhow, that is what's happening as a consequence. It was clear that this happens. This prompted a number of both in the retail and, by the way, in the wholesale market. Then Vodafone has stepped up in their promotions at the beginning. Of the year, Einstein launched this spear tiered unlimited or so called unlimited proposition, by the way, Look into the detail, it's a fake tariff. Telefonica has recently added another aggressive promotion against that. So these developments and are showing that that is a self a triggered problem for this place. Now our position is that we are not jumping into this into this battle here. That we are trying to stay out of it, remain focused on our leadership and our communications about the undisputed network leadership. It's about customer service orientation. So we are trying to do everything to get out and to keep out of this competitiveness today We have a segmented approach in our markets We have Kongstar to react on the one side.

And by the way, we have even sitting on one third of our base in the business area, and the business area is coming to us. And that is quality driven. So therefore, look, I'm concerned a bit about what's happening there. I will not lose market share. That's for sure. We are very clear on this one, not acceptable for us. But we are not the ones who are triggering any kind of competitiveness here. Beyond what's happening there. Let's see whether it will come to benefits to one or the other. But we're trying to stay as much out of the situation as we can.

On the fixed yes, go ahead. On mobile. Okay.

No, go ahead.

On fixed line, to be honest, if you look to the today's results, If you see this one element which we really we are delivering on all the KPIs or beyond, There's not a single kind of things which you should be worried about. If you go through the today's results, the only thing which I think was worrying is the slowdown of the broadband area. In Germany. This is for me an area to focus on. Because I saw that talking about mixed results, okay, maybe it's mixed result. If only one parameter is not working, the rest is working. So I just want to draw your attention to this one. This is an area we have to look at. Now what's happening in the German fixed line market? And I know that this is an area. We have seen a fair amount of promotional activities in recent quarters. But most of them front book prices, they did not change. So therefore, it is in November, voter returned to discounted one gig offers for its coax product. This is priced at €45 Initial on a five month promotion, This compares to the historical €40 price point. In terms of broader market trends, we are seeing some improvements in competitors' performance in what remains a slowly growing market because that is I think, the most important mark.

The market was slower growing. We than we expected. And our slow performance in Kufino is explained by Vodafone's lower customer losses. So Vodafone has done better job on retaining their customers. So we have gained less from them in that quarter. And Vodafone is spending a lot of money to get there. So let's see how sustainable and how long they are able to to fund this retention programs here. And then what we are trying to do is we are trying to approve from the volume side especially on the fiber side. And on the fiber side, the share of fiber has grown significantly, Andrew. You have seen that. So we are now monetizing our fiber much better. So this is, let's say, the number on the volume side we have to focus on. And at the same time, we are driving ARPA, so upgrading customers. In higher speed tariffs. And by doing this, we will generate more ARPA. So you see it's a mix of picture. So slower market, combination with Vodafone's retention, compensated by higher fiber growth on our side, but and better ARPA but this was not showing the volume, which we expected. And that is an area we will focus on.

And I will do everything that throughout this year we see already an improvement in the numbers because for me, it's unacceptable that we are not having our 40% market share, which we have light out as a guidance to all of you.

So Andrew, to wrap it up, there is no need to change the guidance. Both on mobile as well as on broadband. So we're staying at the 2% to 25% on mobile and the 3% to 4% on broadband. And as you know, there was already a decrease relative to the previous guidance, which was 4%.

On broadband.

Thank you.

And on satellites?

So sorry, satellites. So look, on the satellite side, I said it already. In The U. S, you have 500,000 square kilometers uncovered territory. So that there is a service where you can use your mobile phone for emergency calls or for messages makes totally sense. In Europe or in Germany, we do not have this. We have 98% coverage of five gs services. So the likelihood that we have here uncovered territory where we have to build a satellite communications is at least very limited. Now you can argue that there other markets, for instance, like Greece, where you have more uncovered territory on the islands. And this is true and there are some offers from satellite offers, But in these areas, we are going for terrestrial coverage. So we are going for five gs in these areas. And when it comes to fixed line to secondary houses and the second houses, we are going for FMS services. So it is a commercial question here in the European side. How much we are looking the partners are looking for in the direct to device or the direct to cell connectivity. We do not need it. Because the amount of of traffic we can generate by that one is very limited.

So we cannot make big revenue commitments here to our Sky partners. Nevertheless, we are launching in Europe a service, which is in the end to end testing with Skylo Qualcomm. This is a service on your mobile phone receiving text messages via a geosatellite. And this service was launched in a better version on November 26. And we will see how the take up rates are. As an adjacency, as a network of network services might be an opportunity to create a better image. But I do not see that as a big commercial topic. [indiscernible] No. I think it's a very limited threat, very limited threat.

Thank you. So we had a review with one of the large consulting companies on satellite especially on broadband substitution. And the best case indicated for a maximum market share Europe, I'm just talking about Europe of let's say in the vicinity of 5%, but that was very optimistic So we don't see this as a big substitution threat here in the European segment. [indiscernible] [indiscernible] And with that, we move on to David at Bank of America, who is I think connected via audio. So David, can we have your questions, please?

Yes.

Thank you very much. No video. I'm in The U. S. And my call with Hannes at 1AM today was a delight. So thank you for that. Yes, I guess a couple of questions. First of all, on the EPS guidance. For the year. I just wanted to understand your assumptions underlying that Perhaps, is there some incremental allocation capital that maybe we don't have in our consensus forecast? What are the assumptions there? And then just secondly, Christian, if you could just give us the bridge assumptions for the IFRS EBITDA, just so that we can get that nice and clear in the model? Thank you. [indiscernible] On the EPF guidance is coming from the EBITDA. So we are guiding at a currency rate of 108. I think the consensus is guiding at 106. That would account for roughly €500,000,000 And the second one is coming from The U. S. GAAP IFRS bridge. First, think let I'm not sure whether this is public or not, but The U. S. Has increased the number of employees which will be enjoying share based compensation, they have included the frontline So our expectation is that The U. S. GAAP IFRS guidance will be in the vicinity of of $1,000,000,000 and that pretty much explains the difference because my [indiscernible] me honest on this one.

I think you have a bridge of 500,000,000 But I think we have also a guidance of in the appendix, you see the bridge which is coming largely driven by management based compensation and the derivatives. And I think in the last quarter, it was 9.61%, is that right?

And last Sorry, for the year, it was $9.61, yes. So these are the two big differences. [indiscernible] sorry, any assumptions on the unallocated cash capital at T Mobile U. S. Or even Deutsche Tele Group any of that being put to work this year? Nothing has changed. I think very consistent with what Peter with what Peter said in the call. Obviously, we accounted for the debt of the €10,000,000,000 acquisitions. But the EBITDA effect is not built into the models so far because we don't know when the deals will close. And we expect them to close by latest by mid of the year. And then obviously, we can give you a better guidance. But since we don't know when the deals are closing, the EBITDA impact, for example, is not being built in. Okay, very clear. Thank you, James.

Okay. Thank you. Thank you, David. And with that, we move on to Akhil at JPMorgan.

Yes. Hi, good afternoon. I've got two questions as well, please. Firstly, Tim, you commented in your intro extension of your contract, but also the other sort of management changes you're thinking about or have done? And I guess one of of those is Srini moving to The U. S. I guess this is the first time we've seen some from Europe going to The U. S. And I guess I'd love to understand how we should try and think about the rationale behind that. If we look at the press release, it talked about trying to work closer together. I don't know if there's is something within that that we should be thinking through. More broadly, is it something to do with his experience in fixed line? Could that be valuable in T Mobile? So just if you could maybe help us better understand the logic of him going to U. S. And what you've seen in the ads for DT and for T Mobile? That's the first question.

And then the second question, just around numbers is first question, just on the $1,000,000,000 accounting bridge. Can you give any comments going forward? It's been nudging up slowly over time. So I wondered, should we assume that continues to be true? And at the same time, GHS had quite a big step up in the loss there. So maybe you can comment on that too.

Akhil, look, first, not the first one. Omar Tazi, who was our Chief Innovation Officer at Deutsche Telekom, He is the head behind the development of all the digital service in The U. S. Which we are discussing these days. And he's, by the way, even the mastermind behind the app. So he's already in the SLT in The U. S. And that was a very, I think, successful move for the T Mobile U. S. Team, but you should ask even Mike and the team about that. Now Sreeni is following. In a very prominent role. Now by the way, Sreen is well known. And yesterday, we said goodbye to him. And wherever Srini was and when he left our big kickoff meeting this year, there were minutes of standing ovations for him.

Because he has found respect in every organization where he worked in Europe and the headquarters or in Germany.

And by the way, even in the board. So this is a clear hire from Mike.

Mike wanted Xfinity, and he said that clearly because that he has more time and capacity for the strategic job she has to do in The U. S. And Srini is taking over the operational role. So it was his ass to have. But nevertheless, where is the benefit of Srini? The benefit of Sweeney is this deep tech insight. So for the digitization, he will be a game changer. He's one of these telco leaders who have a technical IT insight and background. Second, he will definitely work as a bridge. He did that already when we moved from Europe to Germany. We suddenly had a lot of, let's say, projects which fell into our hands. And that is something which I'm expecting is then over The U. S. It's not easy to create synergies in a 10,000 kilometer operation away from from Europe here. So that is something which which we can facilitate easier. And nevertheless, Sreeni is coming with all the fiber know how. And this is something on convergence and alike where he will have an impact and will be a new partner in the U. S. Team. So this this is a strong kind of showing the how close T Mobile U. S. And Deutsche Telekom is and is going to be to realize synergies to share thoughts, to develop the strategy going forward.

This is more than just a people decision for me. It is even a strategic and symbolic partnership decision as well.

Okay. So on the on your question, Akhil, on the bridge, look, if you take a look to the elements of the bridge, obviously, the the leasing revenues have become a non event. Given the fact that there are hardly any handset leases in The U. S. Anymore.

Obviously, what I can plan or which we don't plan is what is going to happen to the derivatives in The U. S, especially to the energy REPA derivatives. And I think on the management based compensation, we basically involve almost everyone to benefit from this. So I don't think that we're going to see some negative surprises on this roughly SEK 1,000,000,000. And on GHS, I think we had a couple of one offs in the fourth quarter. One is very much related to the pension fund. We expect that we have to pay out higher pension and I think we took a prudent decision on this one. And there let's say, smaller provisions, which we have taken to not being surprised in the giving year 2025. So all up, I would say, don't expect any negative surprise from DHS I think our assumptions have been very prudent.

Great. Thanks, Christian. And so we move on to OTavio. At Bernstein, please.

Hi, good afternoon. Can The first is for Christian. It's actually very last point you made on your present to go back to 2.75 gearing. Now looks that the U. S. Dollar could remain strong. You also mentioned that you got the €10,000,000,000 plus of cash out for the acquisition to come throughout the years.

It looks that Timos will ramp up the buyback this year compared with last year. So these are all really headwinds towards your targets. So what's the flexibility to go back other than just the growth on EBITDA? Do you have any lever considering that all of this will push your debt higher? The second one is on the fix. Effectively, you said that it's the weakness we had in the first of the last quarter. Was to do with phasing. And it's very likely that we'll see progressions in the first and second quarter. My understanding is that the election could have played a role because the budget or the state spending has been frozen up. And of course, now the government will take some times before being formed. And so therefore, when you like reckon the obvious ability when you say that these revenues will come back, how confident you are that we'll come back in Q1 or we have to wait until or H2 this year?

I think when it comes to our leverage ratio, obviously, this is not around 2.75. So the ambition is to get to two seventy five. On the other hand, Ottavia, if you just take the movement year on year on the net leverage, The currency impact relative vis a vis '23 versus at '24 was €6,000,000,000 in additional net debt because of the increased dollar. So it would have been $0.02 below that, we would have been in that range of $0.275 So this I'm not concerned about $2.78 But I don't want to loosen this kind of ambition because it will loosen it then you start having a discussion, okay, it's $2.07, 8, why don't we have $2.08? Why don't we have $2.82? So this is why I'm saying pretty much stubborn on the $2.75. Obviously, what we could do is always to sell into a share buyback to reduce our net debt. Which we don't do right now, as you know. So this is obviously the easiest lever And then we're going to see how the deals are going to play out. If one deal is not coming, just one deal, right? We don't consume €10,000,000,000 for M and A in The U. S. And then you're again in that corridor.

So you see the the moving parts in the net debt bridge. So I think the biggest one for me is obviously currency, which I can't predict. You know that in Q3, we were two sixty four. Right? And your expectation was going down, and then I was surprised by the movement of the dollar. We'll see how the dollar is moving. But I would give you a more, let's [indiscernible] explaining, but I'm pretty stubborn on the €275,000,000 because our absolute debt is fairly high and therefore should be taken into account as well. So on the on the German fixed, look, we're playing back what we're hearing from the B2B segment. Right? And the B2B segment is confident that at least part of the slip in Q4 will come back in Q1. And it's very much related to IT revenues. And if you compare what has happened to the public sector revenues relative to the private market, you see there's a difference in the momentum. So I'm relying on the feedback which we have gotten. And therefore, we expect a a better movement on the fixed service revenues in Q1.

In Octavio, when Christian says stubborn, this is a little bit of an understatement.

Okay. Yes. So with that, we move on to our next audio participant, which is Robert, who is calling in from The United Kingdom. [indiscernible] Apologies, technical issues at this end. So my questions are, you're not participating in the Tmos buyback at present, so your stake is creeping up as highlighted by Tim and that's good news given the stock price. Is the idea that foreign controlled companies in The U. S. Might be disadvantaged from a tax perspective on your radar? Is that something you have contingency plans for or just not a thing to be worried about? And my second question is on the $0.04 gain in the EPS from GD Towers. What triggered that tax benefit, please? Is this a real cash tax saving in Germany or just accounting stuff? And is there any update on European tariff On the first one, I think there is an easy mitigation You know that the U. S. Administration is opposing Pillar one and Pillar two taxation. And for this year in 2025, they have kind of a safe harbor If we would extend the safe harbor, it wouldn't be threatened by having for example, an increase of paying 30% on taxes on dividend.

So we have been very clear to the [indiscernible] clearly advocate for an extension of the safe harbor, and then there shouldn't be a threat. At least this is the understanding of the tax community across the very large companies here in Germany because we discuss [indiscernible] On the $0.04 it's a tax optimization by moving the head quarter and the value add of the business into a different, let's say, city. And that gives you on the business plan a relief on Versailles Lattentes Torien. [indiscernible] Latent taxes of in total EUR 400,000,000. Obviously, our shares only 50%, so it's 200,000,000 deferred taxes, yes, on deferred taxes. And that gained in the evaluation, so it's accounting stuff. In the evaluation of the GD Tower business plan, You can see that Tim hasn't lost his CFO competency either. And with that, we move on to Polo at Are you still there, Robert? The question was answered, I thought. Okay. Yes.

But hopefully, it was. So Robert, let me know. If not, but with that, we move on to Polo at UBS.

Hi. Thanks for taking the questions. I have two questions. The first one is on use of cash.

You're not participating in the T Mobile U. S. Buyback. And your stake has risen to 51.5%.

So can you talk through the rationale for not participating in the T Mobile U. S. Buyback? At the CMD, indicated you had €15,000,000,000 of balance sheet headroom that you could either use to increase your stake in T Mobile U. S. Or buy back DT stock But given where the T Mobile U. S. Share price is relative to the DT share price, Where is your current thinking on how you're looking to deploy this €15,000,000,000 of headroom medium term? And the second question is really just on the outcome of the German elections Just given the outcome, what impact do you expect this to have on the German telecom sector and on DT?

Thanks.

Polo, on your first question, major purposes on how to use the excess cash. One is obviously buying back shares. On the DT side, we have announced a share buyback program for 2025. Therefore, the €2,000,000,000 are euros are standing and we're executing against this. So I would say the remainder what's been left over is being spent into an increase of T Mobile shares because we don't have any kind of competing in that [indiscernible] [indiscernible] if I'm getting into troubles coming back to Ottavia's question earlier on, we may be forced to sell into into the share buyback in order to relieve debt position. But right now, we don't feel forced to do so, so it's basically €2,000,000,000 and the remainder is running into T Mobile U. S. That may change over time, but right now, this is the current thinking.

Polo, with regard to German elections, following the elections on the weekend intensively, there was a moment where I was quite concerned, where deliveries were not in and one of the left parties were in the parliament and no clear majority anymore for the so called great coalition between the conservative party and the SPD. Now we have a situation where we have a two party government in Germany. To be honest, we know the situation with great collisions. And I have quite some experience in my ten years here with this. I like it. I like it because it is good to have the two parties not in a kind of confrontational element, but in a kind of consensual situation, it is much better to talk about ideas, about investments, about needs for the build out with one parties or with one government and representing the big parties here, then trying to do that with the opposition So therefore, I like the combination. Second, everything what Melts, who is becoming probably our next chancellor here, [indiscernible] economy, is pro industry, is pro deburcatization, It is focusing on the unleashing of power of the companies for a better competition. So look, I take him by his word.

I take him by his word.

And this is definitely for our favor. So I'm optimistic about that. We have good understandings with all the people there. I think this is a good outcome for Deutsche Telekom.

Thank you. Great. With that, we move on to Mathieu at Barclays. [indiscernible] [indiscernible] Yes. Hi, and thank you for the presentation. I had two questions. The first one was on Europe.

So if you look at 2024, obviously, you had a very good performance in a number of markets. I realize that there's been some moves in taxes in different countries. I'm thinking about Hungary. Between 2023 and 2024. I was wondering if there was anything to flag for 2025 in any of the major countries. In terms of regulatory or tax changes. [indiscernible] [indiscernible] And I completely agree that D2C and D2 D2Ds is not a threat, nor that is Stalling for others on residential broadband in Europe. But it seems to me that in The U. S, it could be a much bigger threat, notably since T Mobile is is deploying FWA. And as you all know, Starlink has just announced that its new Gen 3,000 satellites will be 50 times more powerful than the previous one. So seems that they could get a lot more than 5%. I don't know if you want to share any of your thoughts on Thank you. Matthieu, thank you for the question on Europe.

And I'm traveling the countries. I've been to Greece recently. And look, there are a lot of, let's say, smaller changes, but there's nothing which is to a bigger situation negatively impact our operations in looking forward in this year. So So therefore, I would say, the biggest focus lies on Greece. With regard to the fiber build out and the framework for that one and the way how we are able to expand the marketplace there. There are some RFQs going on in this market. I cannot go into all the details here. So this is for us the expansion of our fiber build out in the Greek environment. But Czech is now very stable. The historical things are solved. So Hungary, you know that we had a very positive development there, mainly due to the withdrawal of the Telcothec, which we have faced there. So no, I do not see any kind of big changes coming there, which will negatively impact our businesses So we are quite optimistic that we can keep a high run rate in these markets going forward.

Let me add two things to this one. Obviously, we achieved the 1.8% EBITDA growth in 2024. Which we don't expect in 2025. You know that our guidance is 4% to 5%. And the price effects will moderate out, as Tim said. And the one, there's still a benefit in Hungary in 2025. Which is the so called telecommunications windfall tax. Which is basically being applied to to the revenues and that will basically fade out over the course of the full year. And I think the impact is roughly €90,000,000 which we expect there.

And again, on the satellite side, look, by the way, I'm following this very intensively. And to be honest, having fiber at my house and having five gs even stand alone in my house, I have now installed Starlink to just make the user experience around that services and trying to understand that. The data throughput, which is, by the way, growing on average between 3050% on a yearly basis, it is even with the new satellites, a physical limitation to substitute theoretical service in the in the capitals. It's impossible. Now is this an area where you can substitute in the countryside low data throughput? Yes, you can. And by the way, it's a good service. I have at my house, for instance, 17 megabit per second in a very stable way. So this is a good service. No question about that. And this is maybe even a competitive situation for the rural areas in in Greece or in Croatia.

And we know that. But in this areas, we are building five gs and we want to substitute with fixed wireless access. Than rather going into satellite. On top of that, we are working as well with satellite partners. But look, I think it is a little bit overplayed that Starlink is becoming, let's say, a global telcoservice. I He needs local tierstical partners. If he wants to do this, he needs the capacity and then the same economics of scale or cost which we have here today. Interesting, it's getting better. It is there's definitely markets where no coverage is available, where this is a definitely a good alternative But for our congested, high intense data markets, it's an adjacency. Thanks, Tim. With that, we move on to Steve.

At Redburn, who is joining us in video. But you have to unmute yourself, Steve, sorry.

Good point, Hannes. Yes, sorry about that. Happy birthday, a senior moment of many.

Yes, a couple of questions. First, I want to come back to sort of German broadband and fiber.

I guess there's lots of ways to dice and slice it. You've given us the FTTH numbers and you've given us 100 megabit numbers. But on your KPIs, you give a kind of collective VDSL and fiber number.

And it looks like the trends are kind of weakening across the board there. Your retail, fiber and slowed to 61,000 in the quarter versus February last year. Your wholesale fiber adds were just 33,000 in the fourth quarter, John. So we talked about the broadband. So So is there a concern here? Are you kind of maxing out on the number of broadband subs you can get on the collective VDSELFT ATTH footprint in Germany now? Is that something we should be concerned about? Is this just another part of a kind of abnormally competitive Q4 and you'd expect those numbers to bounce back in '25 and beyond. And then just coming back to Europe and from the previous question from Matteo, sort of to take a little bit deeper. It looks like there's kind of three markets that are pulling their weight on an outsized basis for France. We talked about Hungary. There's also Austria and Czech Deutsche. I think in the fourth quarter, Czech EBITDA grew about 20% despite the fact service revenues didn't grow. Maybe some sort of color on that and what we should expect for 2025. But in Austria, it looks like you've been growing double digits.

I think that's benefited from a wholesale reclassification on prepaid, but I'm not sure Again, if you could sort of help us understand what's driving that and what we should look for in 2025, that would be great.

And maybe one quick final one for Christy. Could you help us on the cash tax outlook for '25? We've T Mobile's obviously guided, but the cash taxes ex T Mobile would be great. Thanks a lot.

Steve, first answer. Look, when it comes to the broadband net adds in the fourth quarter, look, I was very clear already We are not happy with that number. And so therefore, this is not what we expecting, and we have to improve that number throughout the year. And I mentioned as well the market share, which we are which we are aiming for. There are reasons for the slowdown. In last year. The overall There was simply not much customer growth in the whole market. Second, we have seen reduced losses from Vodafone high spendings into their retention programs. And on top of that, we saw that The last quarter, the spend for some promotional expansion and even the Homes Connected from outlets in the rural areas intensify. So this is something. Nevertheless, what we're doing against it first, we are building fiber. And by the way, nobody builds fiber more than us in this market. The infrastructure share of building out fiber higher in 2024 than it was the year before. And that means in the future, the potential to upsell and to gain customers, by the way, even in the upsell and gaining new customers, is is much more likely.

So this is just a development which we have seen now in the fourth quarter. But I'm, with our build out, more positive with regards to the future. And the take up rates of fiber are very encouraging as well because they're almost doubled year over year. So look, I think we have now to watch out what's happening in the next quarters. We will not go into the crazy price moves here or whatever. That is not the way how we are doing it. It's more about going about bandwidth and going about the quality here. I don't believe that Vodafone is able to build the same amount of fiber as we can do today in their footprint. And therefore, I'm very optimistic that we see improved numbers will come throughout the year.

That answer your question?

Yes.

I was also noticing that the wholesale fiber and then adds are also we can I guess there's a sort of concern that the fiber ads are coming from MediaCell more than ADSL customers, and I look at the sort of collective fiber market, ADSL plus fiber, that's not really growing or growing very slowly? I take the point of FTTH, but the numbers you present, which are BDSL plus fiber, there's not a lot of growth in retail or wholesale this quarter. [indiscernible] Look, we see kind of €200,000,000 to 300,000 houses growth 200,000 to 300,000 house growth in the in the German market on an annual basis. So this is coming on top of that. There are more single households here in Germany. Yes, there was a slowdown for the whole market. I mentioned that. Which includes then both retail and wholesale. But let's see how this is improving throughout the year. There's a speculation. We see growth coming. [indiscernible] clarify, are you talking about cash taxes ex U. S? U. S?

What was that?

Well, I mean, the both US is obviously guided to $600 and so group number, which I can then back out So ex U. S. Ex U. S. Is roughly 1.4 in euros, not in dollars, right? So now to the more difficult question. So I talked about the tailwind in Hungary. Right, on the revenue tax. I think in Austria, we're benefiting from the CPI link in the pricing. So this is all linked together. I think this is an automation on check. I have no clue. So we have to come back to be honest.

Yes. Czech is also influenced by one offs In general, Steve, because I know you are particularly interested in the contribution from Hungary, I can assure assure you that in our plan between '24 and '27, which is sort of on a capital markets day plan, but starting off by the end of last year, 2024. We are expecting Hungary to contribute much less of the growth than it has contributed in the recent years, and it's going to be substantially more balanced. Obviously, in 2025, you have the effect from the tax unwind, which is meaningful, but this is otherwise, I think the growth rests on many pillars. [indiscernible] with that, we move on to Josh, I guess, at thanks, Steve, at Exxon. By audio.

Thanks, team, and hope you can hear me as well.

I have two questions on pricing strategy. I'll start with fixed and then go to mobile.

On the German broadband pricing strategy, if I look at your website, today, you're charging about €5 less a month for your entry level fiber products than some of your DSL products. My question is, what's the rationale behind that? Is there an advantage just to moving people to Fiverr now from a cost perspective?

Is the plan that you use this to then upsell into faster speeds in the future? In the past, you've talked about higher investments in fiber, maybe justifying price increases.

From what you said today about this 40% fair share level, it doesn't sound like we should anticipate any price increases in fixed, but perhaps if you could give us an update on your thoughts around how you could monetize those five investments would be helpful. And then the second question on mobile, going back to Tim's initial comments about keeping out of the fray and using Klonstar as a tactical sub brand. How should we square that with the 20% online mobile discounts we're seeing in your online portal at the moment? And that a short term thing? Is it a response to a particular promotion from competitors? Are you trying to test the market in a certain way a bit more of an insight into why you're offering that 20% price promotion Look, I'm not aware about, let's say, this 20% discount on the mobile side, which you are referring to. That is maybe some technical things or some things, but it's not a strategy. Hannes, you want to say something?

Well, this promotion where the team wants to test it as the sensitivity of the online channel which otherwise they felt was actually disadvantaged in terms of the overall promotion [indiscernible] previously. So it was a bit of a rejig. I think it should not be seen as a strategic piece. It was a tactical experiment. That we had planned is not a response to anything. So I let's not overrate this as a as a move. And as I say, it's limited to a channel.

And again, we are not concerned about the development in our mobile side. Not from the pricing, nor from the volume side. This is not the area. I think without superior network quality, we get a fair share in this market and we are on a good track With regard to fixed line, to be honest, the answer is yes and yes. What we're doing here is to upsell speed which is, by the way, working nicely. Christian showed the numbers. About upselling into higher bandwidth. Which we have in our network to reduce churn and as well not being too vulnerable to maybe fiber rollouts, which are taking place in this field. And the second area is about, yes, to attract people into fiber. That is definitely our strategy, which we are focusing on. And by the way, the reason that fiber is now on the left up an illustration of our slide has a reason because I said that's the most important KPI. And I want to even stress that throughout the future presentations here.

Great.

Thank you. And with that, we move to Adam at HSBC. Adam?

Yes. Thank you very much for taking my questions. The first one was actually a little bit of a follow-up on Josh's one. There's a lot of focus on the price of that's on discounts and promotions, but also there's the pricing of family plans where telecoms €10 SIM is very competitive. As you said, the volumes remain strong, but are you confident that that pricing structure is still creating value for DT in the market? Or is it And then the second question is on company culture. At the Capital Markets Day, you said that radical transparency was the theme for '24 So how far did you get with your plans there? And is there a new theme for 2025 that you can share with us So on a person basis, on the mobile pricing, you're right, it's dilutive. But given the volume intake, which we're having, you see in our mobile service revenue increase. So it is an ARPA increase. It is under per SIM card, it's dilutive, but all up, it basically supports our ambition of 2% to 2.5% and historically was higher. With regard to company culture, look, I can easily say yes.

To be honest, I'm thinking about a lot of things. We had just our kickoff. For the top leaders of the company, 1,000 people being here.

And we were very transparent about what going on. I'll give you an example. I believe that we have to work all harder have to be aware of that. Success is a big risk for us. We have to get out of the comfort zone. That means including the home office and other things. So I expect from the team, especially in Germany, that they work more and harder The second one is definitely the discussion around The global situation is not easier very complex. And we need a moral compass and we reiterated our topics so I don't want to go into all the discussion, which you might have in mind with regard to DAA. I with regard to the discussion around our democratic values, which are at risk these days. I was very clear about our values and about how we position ourselves. That we're living in democracies, that we're always accepting policies. But that we have a moral compass and we have a culture which we have to which we have to take as a kind of lighthouse and which we're not questioning. With regard to ESG, with regard to our social things, with regard to our inclusion, with regard to the respective people, in the organization outside.

That was a very important thing for my people in the organization to hear that from from us as its leadership team We talked about the change in our business model. Radical transparency that it means that we will lose jobs in the classical work because the workflow automation will be changed by AI. This will trigger a lot of changes within the organization. We had Masa San in our session talking about, let's say, our partnership. But even beyond what he thinks leaders in the future should should use for and should learn in the way how they thinking and how they get educated. So there are a lot of things happening these days. I'm working on the renovation of this team. And trying to find new leaders I believe strongly in tech leaders these days everywhere. That is a change in our industry because so much changes are taking place. And today, having very good, let's say, year end result even trying to keep as keep honest to myself, if something is not working, look into the mirror and if something is not working, sorry, if something is not working, look into the mirror. And if something is working, look out of the window.

And not the other way around because managers tend to be looking in the mirror if things are working well and saying how great was I and then rather questioning where the benefit is coming from. And that is related with bashing The U. S. For a lot of things these days. I'm against it. I think it's the weakness of Europe, which we have to overcome. And it is as well about bashing the politics for everything which is not working, you always have to first start with your business. And then you can even ask for better improvement. So there are a lot of things going on here in our discussion with regard to transparency. It's not cozy. And to be honest, I believe even we have to work much harder and I was very clear on this one. But is it already a theme it already a very kind of consistent you narrative? To be honest, I'm thinking about it. Good impulse you said. Give me that question again in the next quarter. Okay. With that, Adam's question for the next quarter is set. And now we move on to the inaugural question from Karl at Citi.

Thanks very much, Hannes. I'm also a hopeless romantic so happy anniversary.

I've got two questions, please. Firstly, on the on the nature of the IT business phasing in Germany. I suppose, is it temporary or is it permanent? So by that, I mean, it were temporary and you expect it to come back, you'd expect the trends to kind of go back to above what they had been. As you get that recovery before normalizing towards the norm again? Or is it a permanent shift whereby you'd expect it to come back over time kind of towards where it has been rather than get it benefiting from that recovery as well. And then secondly, I was wondering if you could comment a bit more on the civil servants health insurance and the extent to which that has boosted the net income. So what's the scale of this on your balance sheet? How often does it get reviewed? And kind of how much is it normally the accrual running through your your EBITDA every year? Okay. Let me start with the first one.

The answer it's clearly temporary. And by the way, that has a lot to do in the fourth quarter. Think about the situation in the government. There were these big budget constraints, remember, Germany had no budget for the upcoming year. Second, the coalition broke There was no government in office. And no decisions were taken at that point in time. So we saw a clear slowdown. I expect that there will be even some overproportionate uptake coming now soon. Now whether it's already in the second in this first quarter or the second quarter, I'm not sure. But I know that there is a high high, high demand for digital services. On that front. So our internal expectations with regard to growth is definitely this was a one timer and we saw an improvement coming soon.

We're just looking at the second answer to your question. I'm sorry, but I think Carl, I have to come back to you. I don't have it in front of me. I don't have the documentation in front of me. Hannes, if you have the number, just let me know.

Well, I mean, we have had a so in the GHS, we had an effect from the from increasing the expected future payments in the civil servant pension fund. Which was actually a negative to adjusted net income in At the same time, we had a interest effect for valuation effect, which was favorable and was in the nonrecurring part of the financial result, which Christian flagged when he went through the bridge. And so we had two effects that are offsetting, but one we showed as a nonrecurring effect. So that's the net effect actually was positive So it's we can give you the more precise numbers Yes. I mean, the precise numbers disclosed to some extent, but we have said effect in the adjusted EBITDA was two thirds of the miss versus the consensus in the GHS In terms of the impact on the financial results, I can we can look it up.

That's great.

Okay. And then we move on to the last question for today, which is will be from James at New Street, please.

Yes. Good afternoon, all, and thanks for taking the question. So Apologies to end with probably the umpteenth question on German mobiles. But I think Christian in your opening comments, you were quite careful to say that the 22.5% growth is obviously your long term target you set out in the CMD. You exit Q4 at 2.1%. So at the lower end of that range, do you feel confident you can hit 2% to 2.5% for growth or do we kind of dip below that range and you had to come back into it in 'twenty six and 'twenty seven? And then secondly, I think it's now four months or so since I last asked an MDU question. So here goes with another one, which is, I mean, obviously, your FTTH penetration remains low on a reported basis, so I think have issues around Level four wiring access. So could you actually been able to get in and do the Level four wiring on? And specifically, they have recent stories in the press that Altice is looking to sell out of What are you seeing on the ground from OXG at the moment? How often do you come up against in your kind of contract negotiations with landlords?

Have you actually seen much real building going on from them so far? Thank you.

So James, let me start with the first question. Sorry, I gave him the wrong within the guidance of 2% to 2.5% in 2025. So I have no indication that we're going to go below that and then we have kind of a hockey stick effect towards the outer years. [indiscernible] OXG side, I can tell you the answer. We have seen this, guys. By the way, we have intensively discussed as well with them, and we were not interested to work with them. So that is the reason that we haven't seen the potential of that company going forward. So I'm not at all surprised that Altice is leaving. That was, I think, from the beginning, that they are not going to be able to to build the capacities. They had more an idea than a build force. Yes? So that's not a surprise. We had the offer on the table, but we decided not to pursue with Patrick Dyer at that point in time. Now on top of that, we have seen that in negotiations as with us as well with the landlords Look, the complex situation with the MDUs and the landlords, it's not only the landlords.

It's just even the Association of Groups, I don't know what how the name of it is, the [indiscernible] processes there. To be honest, I do not have the numbers on the MDUs here with me. I would say the progress we are making here is limited. We are making slow progress, but it's not a breakthrough yet.

Do you find there in areas where you're going up against where says it's building that they are a credible threat?

Yes, we do. And by the way, I have asked here in my office to give you the numbers [indiscernible] [indiscernible] So We have fiber permissions in Germany For 5,400,000 households?

Yes.

That is what we have today. We have today connected five fifty seven thousand of them. So that is a tenth of this, but permissions we have are 5,400,000. We have wins in the different quarters of the year in the vicinity throughout last year and until only 24, This is in the vicinity of 120, 130, 180,000 last year, so around 200,000 wins in the MDU segment. The major areas have been Deutsche Multimedia Service KMBR. This is a company from Vonovia, Frankfurt Holdings, Antech and some others. So I can give you the names on this one. But this is the these are the precise numbers.

That's much appreciated. Thank you very much.

Guys, I think that's it for today.

But we have got one question from Emmet, who he was not able to ask while the audio. You also, he sent me an email. Maybe we can quickly look at that. So he says that [indiscernible] geopolitical changes in Europe since Trump was inaugurated. There's lots of talk about security and defense and data security falls into this. And you are in Europe and The U. S. And the hyperscalators are very dominant in the European cloud. Do you think changes in geopolitics could see B2B and B2C customers look differently at non European companies? And would that create an opportunity for Deutsche Telekom in the cloud?

By the way, Emmet, I was expecting that question on data centers and the way going forward. Look, the and I should mention that was following very closely in personal contact with Masa san on his target initiative and what he's doing there. And the investments of up to €500,000,000,000 which is considering here SEK 100,000,000,000 from him. So that is that is definitely something which is a game changer. And I believe that data center infrastructure plus, let's say, the stacks on it they are one of the drivers of sovereignty of the future. So there's no doubt about that. And And I think that was even made clear at Macron's Paris Summit for AI, how important data center infrastructure is going to be and that we cannot hand it over to the hyperscalers or The U. S. Hyperscalers alone. The U. S. Will definitely build their bets on The U. S. Because where should they go? And by the way, they have very strong businesses there and they get strong commitments here from Oracle, from from foreign investors like Masasan, SoftBank. But even from the existing players. So they will benefit as well from governmental orders. So that is the difference here.

And I hope and by the way, if you would look up at LinkedIn, you would find my recommendation for the new government. The 10 points, how Germany should embrace the digital ecosystem in a better way and what are the topics they should address, you will find as well that the government should be an anchor tenant for European infrastructure. So I think it's very important that they are moving forward. And considering cloud service here in Europe. Believe the cloud market will grow. It's growing by 30% on an annual basis anyhow. AI will definitely drive cloud infrastructure use. As well. And on top of that, the automation of a lot of services will drive capacities here as well. No doubt about that one. I talked about do that with Mine Cloud and another activities we are driving. Some activity here, but it's just maybe a small portion of it. There will be definitely more cloud infrastructure being built in Europe. To create sovereignty. To be honest, I don't know what our role might be in this. That is not alone a question about, let's say, the demand. It's even a question about the possibility of energy prices or low energy prices water treatments.

It's as well even the utilization of this from the from the local tenants here. So let's see how this is evolving. Our focus on CapEx today is very clear. Where we're investing the money. But I think there will be more sovereignty discussion driving local orders and local use of players. Just as a consequence, all of this competitive situation between the different protagonists.

Thanks, Tim. And I still owe you the answer related to the effect in financial income related to the civil servant pension health insurance And that effect was just over SEK 100,000,000 for the full year. It was like [indiscernible] so that contributed to the nonrecurring items in that magnitude. So that's now covering both effects that we had related to that line item. With that, we come to the end of our call if you have any further questions, we kindly ask you to contact the IR department. Looking forward to hear from you again. Soon and see you hopefully and without a goodbye for today.