Ad-hoc | 19 January 1999 08:10

Ad hoc-Service: Deutsche Telekom AG

Ad-hoc Mitteilung übermittelt durch die DGAP. Für den Inhalt der Mitteilung ist allein der Emittent verantwortlich. —————————————————————————— Ad hoc notification pursuant to paragraph 15 of the Securities Trading Act (WpHG) Bonn, January 19, 1999 Deutsche Telekom Group Preliminary key figures for the 1998 financial year (January 1, 1998 to December 31, 1998) Significant growth in income of 27% over previous year Revenue 3% higher than in 1997 Increasing price reductions in the second half of the year Number of customers growing further: ISDN + 38% T-Online + 42% T-D1 + 67% Deutsche Telekom AG announces a preliminary indication of the corporate group’s results for the 1998 financial year. Deutsche Telekom emphasizes that these results are only initial results on the basis of current information. Deviations may arise between these figures and the audited figures to be published at the Press Conference on Deutsche Telekom’s Financial Statements, planned for April 15, 1999. Revenue and net income, January 1 – December 31 Billions of EUR / DM 1998 financial year 1997 financial year change Revenue EUR 35.64 EUR 34.56 3% DM 69.7 DM 67.6 Net income EUR 2.15 EUR 1.69 27% DM 4.2 DM 3.3 Total revenue in the 1998 financial year rose by 3% over the previous year to EUR 35.64 bn / DM 69.7 bn (+ 1.5% excluding the billing of competitors’ revenues amounting to EUR 511 million / DM 1 bn). Amounting to EUR 2.15 bn / DM 4.2 bn, the net income was approximately 27% higher than in 1997. This increase is mainly attributable to the reduction by half of the accumulated deficit from loss-making activities compared to 1997, in particular from international investments (Asia), directory inquiries and terminal equipment. Employees and financial liabilities Dec.31,1998 Dec.31,1997 change % change Employees (excl. Matav) 179,500 191,000 -11,500 -6% Financial liabilities (excl.Matav) in billions of EUR 39.58 44.18 -4.60 -10% in billions of DM 77.4 86.4 -9.0 As of December 31, 1998, the number of employees in the corporate group (excluding Matav) had fallen by approximately 11,500 to 179,500. Financial liabilities (excluding Matav) were reduced according to plan by around 10% to EUR 39.58 bn / DM 77.4 bn. In the Deutsche Telekom Group (including Matav), financial liabilities now amount to EUR 40.19 bn / DM 78.6 bn. Balanced against cash and cash equivalents, Group-net debt was reduced to an end-of-year total of EUR 33.23 bn / DM 65 bn. Deutsche Telekom has thus taken a considerable step in its efforts to reduce its debts. Customer trends for selected services in millions Dec.31,1998 Dec.31,1997 change % change Telephone lines 46.5 45.2 1.3 3% – of which ISDN channels 10.1 7.3 2.8 38% T-Online customers 2.7 1.9 0.8 42% Mobile telephony customers 5.8 3.8 2.0 53% – of which T-D1 5.5 3.3 2.2 67% Paging and other 0.8 1.1 -0.3 -27% mobile communications Cable subscribers 17.7 17.3 0.4 2% With an ISDN penetration rate of approximately 22% of all telephone channels, Deutsche Telekom is the world leader and, with a total of 10.1 million ISDN channels, has more ISDN lines than the USA and Japan together. T-Online has 2.7 million customers, making it the largest online service provider in Europe and the number two worldwide. With a net growth of 2.2 million customers, T-D1 attracted more new customers in 1998 than ever before. Across these growth areas Deutsche Telekom has reinforced its global leadership. Correct valuation of real estate reconfirmed A recent additional independent audit has confirmed that the valuation of Deutsche Telekom’s real estate assets in the opening balance sheet was carried out properly and appropriately. Deutsche Telekom evaluating future capital requirements – Decision not yet taken Deutsche Telekom is currently evaluating its future capital requirements based on potential investment opportunities in the rapidly developing global telecommunications market and the resulting possibility of a second offering of shares. No decision has yet been taken. Under its articles of association Deutsche Telekom still has 286.3 million shares of authorized capital which it can use until the end of 1999. Under the terms of Postreform II (second postal reform law), the German Federal Republic, as the major shareholder, expressed its intent that it would not sell its stock on the capital market before December 31, 1999. This also applies to the shares held by the state owned Kreditanstalt für Wiederaufbau (a German government-owned-banking institution) With the exception of historical information, the matters discussed in this release are forward-looking statements that involve risks identified in filings with the U.S. Securities and Exchange Commission. Ende der Mitteilung