Obligation Deutsche Telekom 5.75% ( US25156PAH64 ) en USD

Deutsche Telekom

100.117 % ▲

Allemagne

US25156PAH64 ( en USD )

5.75% par an ( paiement semestriel )

23/03/2016 - Obligation échue

Prospectus brochure de l'obligation Deutsche Telekom US25156PAH64 en USD 5.75%, échue

75 000 USD

1 000 000 000 USD

25156PAH6

L'Obligation émise par Deutsche Telekom ( Allemagne ) , en USD, avec le code ISIN US25156PAH64, paye un coupon de 5.75% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 23/03/2016

PROSPECTUS
Deutsche Telekom International Finance B.V. ("Finance")
$1,000,000,000 Floating Rate Notes due 2009
$500,000,000 5.375% Notes due 2011
$1,000,000,000 5.75% Notes due 2016

Guaranteed as to Payment of Principal and Interest by
Deutsche Telekom AG ("Deutsche Telekom")

Finance's $1,000,000,000 Floating Rate Notes due 2009 (the "Floating Rate Notes"), $500,000,000 5.375% Notes due
2011 and $1,000,000,000 5.75% Notes due 2016 (together, the "Fixed Rate Notes" and, together with the Floating Rate Notes,
the "Notes") were offered for sale in the United States, Europe and elsewhere where it is lawful to make sure offers. Application
is being made to list and trade the Notes on the regulated market of the Luxembourg Stock Exchange which is a regulated
market for purposes of Directive 2004/39/EC on Markets in Financial Instruments. This prospectus as well as the documents
incorporated by reference will be published on the website of the Luxembourg Stock Exchange (http://www.bourse.lu).
Finance will pay interest on the Floating Rate Notes on March 23, June 23, September 23 and December 23 of each
year, beginning on June 23, 2006, at an annual interest rate for each interest period equal to 3-month LIBOR plus a margin of
0.18%. Finance will pay interest on the Fixed Rate Notes on March 23 and September 23 of each year, beginning on
September 23, 2006, at an annual interest rate of 5.375% for the Fixed Rate Notes due 2011 and an annual interest rate of
5.75% for the Fixed Rate Notes due 2016.
Finance may redeem the Fixed Rate Notes on the terms described in this prospectus under "Description of Notes
Fixed Rate Notes Optional Redemption". Finance may also redeem the Notes at 100% of their principal amount plus accrued
interest if certain tax events occur as described in the accompanying prospectus relating to Finance's debt securities.

Neither the Securities and Exchange Commission nor any state securities commission or other regulatory
body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense.

Underwriting
Discounts and
Proceeds to

Price to Public
Commissions
Finance
Per Floating Rate Note.......................................................
100.000%
0.150%
99.850%
Per Fixed Rate Note due 2011 ......................................... 99.615%
0.250%
99.365%
Per Fixed Rate Note due 2016 ......................................... 99.355%
0.325%
99.030%
Total ..............................................................................$2,491,625,000
$6,000,000
$2,485,625,000

The Notes were delivered in book-entry form only through the facilities of The Depository Trust Company ("DTC") as
well as through the facilities of other clearing systems that participate in DTC, including Clearstream Banking, Luxembourg,
known as Clearstream, and Euroclear, against payment in immediately available funds on March 23, 2006.
Joint Bookrunning Managers
Lehman Brothers
Morgan Stanley
UBS Investment Bank

Co-Managers

Banc of America Securities LLC
Barclays Capital
Credit Suisse
Dresdner Kleinwort Wasserstein
HSBC
RBS Greenwich Capital
May 8, 2006

TABLE OF CONTENTS

RESPONSIBILITY STATEMENT.........................................................................................................1
RISK FACTORS .................................................................................................................................1
NOTICES .........................................................................................................................................11
DESCRIPTION OF THE NOTES TO BE LISTED ...............................................................................12
THE ISSUER AND THE GUARANTOR .............................................................................................18
DOCUMENTS INCORPORAT ED BY REFERENCE........................................................................... 22
RATIOS OF EARNINGS TO FIXED CHARGES .................................................................................24
USE OF PROCEEDS ........................................................................................................................24
CAPITALIZATION............................................................................................................................25
GENERAL DESCRIPTION OF THE DEBT SECURITIES AND GUARANTEES ................................... 27
TAXATION.......................................................................................................................................37
UNDERWRITING .............................................................................................................................47
FORWARD-LOOKING STATEMENTS ..............................................................................................49
CLEARANCE AND SETTLEMENT ................................................................................................... 49
LEGAL MATTERS ...........................................................................................................................53
AUDITORS ......................................................................................................................................53
GENERAL INFORMATION...............................................................................................................53
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2005 DEUTSCHE TELEKOM
INTERNATIONAL FINANCE B.V. ..................................................................................................... 54
i

You should rely on the information contained or incorporated by reference in this
prospectus. We have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or inconsistent information,
you should not rely on it. You should assume that the information appearing in this prospectus,
as well as information incorporated by reference, is accurate as of the date on the front cover of
this prospectus only. Our business, financial condition, results of operations and prospects may
have changed since that date.
RESPONSIBILITY STATEMENT
Deutsche Telekom with its registered office in Bonn and Finance with its registered office in
Amsterdam are solely responsible for the information given in this Prospectus, provided that Finance is
not responsible for the description of Deutsche Telekom. Each of Deutsche Telekom and Finance hereby
declares that, having taken all reasonable care to ensure that such is the case, the information contained
in this Prospectus for which it is responsible is, to the best of its knowledge, in accordance with the facts
and contains no omission likely to affect its import.
RISK FACTORS
The discussion below is a disclosure of risk factors that are material to Deutsche Telekom and
Finance and that may affect Finance's ability to fulfill its obligations under the Notes or Deutsche
Telekom's obligation under the guarantee. When we refer to ourselves, we are referring to both
Deutsche Telekom and Finance. Prospective investors should carefully consider the following
information in conjunction with the other information contained or incorporated by reference in this
prospectus.
Relating to Deutsche Telekom
The risk related to Deutsche Telekom´s ability to fulfill its obligations as Issuer of debt securities is
described by reference to the ratings assigned to Deutsche Telekom. Deutsche Telekom is rated by Fitch
Ratings Limited ("Fitch"), Moody's Investors Service, Inc. ("Moody's") and by Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc. ("S&P ", together with Fitch and Moody's, the
"Rating Agencies").

As of the Publication Date, the ratings assigned to Deutsche Telekom by the Rating Agencies were as
follows:

by Fitch:

long-term rating: A-
short-term rating: F-1

Fitch defines1:
A: "A" ratings denote a low expectation of credit risk. The capacity for timely payment of financial
commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.
F-1: Indicates strongest capacity for timely payment of financial commitments.
by Moody's:
long-term rating: A3
short-term rating: P-2

Moody's defines2:
A-3: Obligations are considered upper-medium grade and are subject to low credit risk.
P-2: Issuers have a strong ability to repay short-term obligations.

1 Note: "+"or "" may be appended to a rating to denote the relative status within major rating categories. Such suffixes are not added to the
"AAA" category or to categories below "CCC".
2 Note: Moody's appends numerical modifiers 1, 2 and 3 to each generic rating classification from Aa to Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a
ranking in the lower end of that generic rating category.
1

by S&P:

long-term rating: A-
short-term rating: A-2

S&P defines3:
A-: An obligation rated "A" is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rated categories. However, the
obligor's capacity to meet its financial commitment on the obligation is still strong.

A-2: A short-term obligation rated "A -2" is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than obligations in higher rated categories. However, the
obligor's capacity to meet its financial commitment on the obligation is satisfactory.

An economic downturn, a substantial slowdown in economic growth or a deterioration in
consumer spending could adversely affect our customers' purchases of our products and
services in each of our strategic business areas, which could have a negative impact on our
operating results and financial condition.
Our business depends to a large degree on general economic conditions in Germany, other
European countries in which we do business and the United States. The prospects for the development of
the German economy in 2007 might deteriorate if the value added tax (VAT) in Germany is increased
according to plans of the new German government. An increase in VAT may have a negative effect on
private consumption in Germany, as well as on our margins, since we may not be able to pass through
the additional VAT to our customers . If economic growth in our markets proves to be low or non-existent,
because of current or anticipated circumstances, this could have an adverse effect on the level of
demand by our individual customers and the willingness of our key business customers to invest in
information and communications technology (ICT). This could, in turn, jeopardize our growth targets--for
example, those relating to multimedia services in mobile telecommunications, or those relating to
broadband products and services based on DS L (digital subscriber line) technology.
Because we operate in heavily regulated business environments, decisions that regulatory
authorities impose on us restrict flexibility in managing our business and may force us to offer
services to competitors, or reduce the prices we charge for our products and services, either of
which could have a material negative impact on our revenues, profits and market shares.
Unlike many of our competitors, we are subject to strict regulation in many market segments in
Germ any, particularly in many areas of the fixed-line network business of our Broadband/Fixed Network
strategic business area. Government agencies regularly intervene in the offerings of our products and
services and in the pricing of our products and services. Such regulation places enormous pricing and
competitive pressures on us and on our ability to generate revenues and profits.
On June 26, 2004, amendments to the German Telecommunications Act
(Telekommunikationsgesetz, the "Telecommunications Act") became effective. Although the precise
effects of the amendments to the Telecommunications Act are still not definite in all segments of the
German telecommunications market, it is already clear that regulatory intervention will continue in certain
market sectors of our business. The Bundesnetzagentur (the "Federal Network Agency," formerly, the
Regulierungsbehörde für Telekommunikation und Post) is required to decide which telecommunications
products and services are to be regulated in a particular market segment. The Telecommunications Act
requires the regulation of telecommunications services that are considered by the Federal Network
Agency to involve a provider with "significant market power". So far, we have been exempted from
regulation on the basis of a loss of significant market power in markets of minor importance only, such as
the market for foreign long-distance calls in fixed-line networks. It is possible that services not previously
regulated will be subject to future regulation, such as international roaming or voice over Internet protocol
(VoIP) services.

3 Note: Plus (+) or minus (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.
2

Further, we expect that the Federal Network Agency will publish various regulatory ordinances
interpreting the provisions of the Telecommunications Act, which may negatively affect the prices we
charge for certain of our products and services. The recently elected German government may be
expected to take up earlier plans to amend the Telecommunications Act. If adopted in the form previously
considered, these amendments would intensify existing customer protection rules, which could have an
adverse effect on our future revenues and entail additional operating costs.
The European Union is establishing an E.U. -wide regime of data retention requirements for law
enforcement purposes. These requirements establish minimum standards for both the types of data to be
retained and the term of their retention. After adoption of the relevant E.U. directive (planned for the
spring of 2006), the E.U. requirements will have to be implemented into national law of the E.U. Member
States within 18 months. Depending on the requirements of the final national rules, compliance with the
new data retention requirements could entail considerable initial investment and recurring annual
operating costs for us. At this time, it is unclear whether and how we might be compensated for these
costs.
Broadband/Fixed Network
The Federal Network Agency considers us, through our T-Com business unit, to be an "entity
with significant market power" in several defined markets for telecommunications services in Germany,
particularly the fixed-line market. Many decisions of the Federal Network Agency in 2005, taken under the
premise of increasing competition in the German market for fixed-line telecommunications, were
unfavorable to T-Com (for example decisions on charges for line sharing and monthly line rental). These
regulatory decisions have had a significant effect on our fixed-line network pricing and service offerings,
and future regulatory decisions are expected to continue to have a negative impact on T-Com's market
shares, revenues and margins.
In addition, the Federal Network Agency intends to address other markets that are currently not
subject to regulation (for example virtual private networks and VoIP). VoIP is an emerging market for
nomadic voice telephony services that are based on the Internet and are not dependent on specific
customer telephone lines. Nevertheless, the Federal Network Agency has included VoIP in the same
market as conventional voice telephony services. Therefore these services may be treated in the same
way as conventional telephone services for the purpose of regulation and may also be subject to price
regulation.
Additional market regulation is expected to intensify competition in Germany and will, therefore,
put pressure on our revenues and the cost structure of our fixed-line network business. In particular, if
regulatory measures allow broadband access lines to be "unbundled" (separated) from telephone lines,
this could substantially increase the price pressure on, and competition faced by, our fixed-line network
business. Even new infrastructure investments, such as our planned new high-speed fiber -optic network
as a platform for "triple-play" services (i.e., high-speed Internet access, communications services and
entertainment offerings), are in danger of becoming subject to strict regulation by the Federal Network
Agency.
Although the new E.U. regulatory framework for electronic communications does not provide for
an extension of sector-specific regulation to the online communications market, there are some
indications that the Federal Network Agency may change its legal approach to the regulation of prices for
access to online services in the future. We cannot yet determine what effect, if any, such regulation may
have on our broadband services offerings. Additionally, Internet subscribers are indirectly affected by the
regulation of access tariffs, as wholesale costs include charges for telecommunications services that are
regulated by the Telecommunications Act.
We are also subject to the laws and regulations of other countries where our affiliates or we have
fixed-line network operations, primarily in Central and Eastern Europe. The business impact of increased
regulation on our subsidiaries in Central and Eastern Europe will depend on the way in which national
regulatory authorities use their acquired powers, and the extent to which our competitors take advantage
of regulatory decisions designed to foster increased competition.
3

Further market analysis procedures under the E.U. regulatory framework will be carried out in
Hungary and Slovakia in 2006, which could eventually lead to reductions in the prices we may charge to
customers, both for wholesale and for retail services. Such developments could also contribute to a loss
of our market share in these countries. Our Central and Eastern European subsidiaries might also be
required to adjust their product offerings on the wholesale and retail levels in furtherance of competition in
the fixed -line network. This would add to the downward pressure on prices in the countries in which they
operate.
Mobile Communications
Our mobile telecommunications operations are supervised by regulatory authorities in the
countries in which we operate. We expect tightening of regulatory control in the area of mobile
telecommunications, with a probable negative effect on pricing and revenues, as a result of a reduction in
international roaming charges, call termination charges and also possible access regulation in some
markets. The E.U. regulatory framework defines international wholesale roaming, call termination and
access, and origination as separate "markets". On this basis, national regulatory authorities in the
European Union are required to carry out market investigations and, if necessary, define regulatory
remedies in those markets in accordance with E.U. directives.
On February 10, 2005, the E.U. Commission opened formal proceedings against, among others,
T-Mobile Deutschland. In the proceedings, the E.U. Commission alleged that T-Mobile Deutschland had
been charging excessive wholesale roaming tariffs for calls of foreign visitors in its network during the
period from 1997 to 2003. Should the E.U. Commission decide to uphold its preliminary findings, it may
impose significant fines on T-Mobile Deutschland.
Our telecommunications systems and operations in the United States are regulated primarily by
the U.S. Federal Communications Commission (FCC) and by various other federal, state and local
governmental bodies. These and other governmental agencies may also exercise jurisdiction over mobile
telecommunications operators. Some U.S. states have taken actions to regulate various aspects of
wireless operations including, for example, customer billing, termination of service arrangements, and
advertising. Any of those agencies could adopt regulations or take other actions that could adversely
affect our business. If we fail to comply with applicable regulations, we may be subject to sanctions, which
may have an adverse effect on our mobile telecommunications business in the United States.
We face intense competition in all areas of our business, which could lead to reduced
prices for our products and services and a decrease in market share in certain service areas,
thereby having an adverse effect on our revenues and net profit.
Broadband/Fixed Network
In our domestic market, fixed-line network voice telephony service revenues and prices have
been declining in recent years, primarily due to intense competition and adverse decisions imposed by
the Federal Network Agency, and also due to customers' substitution of mobile telecommunications for
fixed-line usage.
Competition became even more intense in 2005, resulting in our continued loss of market share.
The increase in competition from mobile operators, other fixed-line carriers and cable operators entering
the telecommunications market is expected to continue for the foreseeable future. We expect further
increases in competitive pressure, due to the offering of attractive product bundles for telephone and
broadband access lines, which include a flat rate for Internet service, and other factors, including the
increasing quality and acceptance of VoIP services (which, among other things, allow customers to
conduct voice communications through their personal computers at low or no calling charges) and
regulatory actions by the Federal Network Agency.
Additional local and regional network operators are expanding their presence to include other
major cities and regions. In the future, we could face even fiercer competition and lose further market
share if our competitors were to combine their businesses. Furthermore, alternative carriers are
aggressively pursuing a strategy of reduced prices for call pre-selection and call-by-call services.
4

Existing mobile substitution effects are intensified as a result of the proliferation of mobile virtual
network operators (MVNO), which continue to have an adverse effect on our fixed-line network revenues.
Reduced prices for mobile telecommunications services (e.g., on the basis of lower flat rates without call-
based charges) could increase pricing pressure on our fixed-line services.
The German and European markets for Internet access and portal services--especially within the
broadband market--have been, and will continue to be, highly competitive. Prices for broadband flat rates
have been steadily declining. T-Online's future competitive position will be affected by pricing, network
speed and reliability, services offered, customer support and its ability to be technologically adept and
innovative. The regulatory environment can also exert a significant influence on the level of competition.
We expect that T-Online's competitors will continue to pursue new broadband customers aggressively. In
the market for portal services and content, competition is also intense, due to low barriers to entry.
Each of these developments is expected to continue to erode our market shares and to decrease
our revenues and profit margins.
Mobile Communications
During 2004 and 2005, consolidation in the wireless telecommunications sector in the United
States has dramatically changed the competitive landscape. Each of T-Mobile USA's three remaining
national competitors--Verizon Communications, Inc. ("Verizon"), Cingular Wireless LLC ("Cingular") and
Sprint/Nextel Corporation ("Sprint/Nextel")--are significantly larger than T-Mobile USA, with larger
spectrum holdings and more than double the customer base. Their scale could afford them significant
structural and competitive advantages. Thus, this situation presents a long -term challenge to T-Mobile
USA to effectively compete in pricing, products, coverage and the introduction of new technologies and
services. Intense competition from various regional operators also exists. Since T-Mobile USA is a
significant contributor to our overall revenue and customer growth, a slowdown or decline in the business
of T-Mobile USA could have a material adverse effect on the attainment of the growth targets of our group
as a whole.
Competition in the European mobile telecommunications markets has increased and can be
expected to increase in the future. Increasing competition results, in part, from the entry into the market of
low-cost carriers, such as MVNOs, which use the networks of other operators at volume discounts, and
from market consolidation (e.g., the recent acquisition of O2 plc ("O2") by Telefónica S.A. ("Telefónica"). If
prices for mobile telecommunications services continue to decline, T-Mobile may not achieve its growth
objectives.
As European markets have become increasingly saturated, the focus of competition has been
shifting from customer acquisition to customer retention, and increasing the quality and value of existing
customers. Accordingly, if we are unable to offer increased quality and better value to our customers, our
market share and revenues may not grow as we have anticipated in our growth plans.
Business Customers
Our Business Customers strategic business area, operated through T-Systems Business
Servi ces GmbH and T-Systems Enterprise Services GmbH (collectively, "T-Systems"), is a provider of
solutions covering the entire value chain of information and communications technology. It is subject to
risks associated with the general and regional economies of its customers and the willingness and ability
of its customers to invest in information and communications technology services and products. The
information and communications technology market is shaped by long sales cycles, severe competition
and declining prices. The result is downward pressure on revenues and margins and lower predictability
of revenue growth.
The international growth potential of T-Systems may be constrained by its limited brand
recognition in some national markets, at least compared to that of competitors who may be more
established there, particularly as this relates to maintaining and increasing business with multinational
companies outside of Germany.
5

Spectrum capacity may become a limiting factor to T-Mobile USA's growth in the United
States.
T-Mobile USA's capacity and coverage expansion is dependent on its ability to acquire additional
spectrum licenses, which are granted by the FCC or otherwise regulated by the FCC if acquired from
third-party operators. The failure to obtain sufficient capacity and spectrum coverage would have a
material adverse impact on the quality of T-Mobile USA's services in the United States, and on T-Mobile
USA's ability to provide future services in some markets. T-Mobile USA could experience negative
operational effects, such as reduced growth of customers and revenues, due to a lack of capacity in
specific markets. One opportunity to acquire additional sizable units of spectrum is the Advanced
Wireless Services (AWS) auction (1700/2100 MHz), expected to take place in mid-2006. Failure to obtain
sufficient spectrum in this auction could inhibit our ability to introduce advanced wireless services and
keep pace with our competitors. Prices in spectrum auctions can become high, posing challenges to the
attainment of an attractive return on investment.
We may realize neither the expected level of demand for our products and services, nor
the expected level or timing of revenues generated by those products and services, as a result of
lack of market acceptance, technological change or delays from suppliers, which could adversely
affect our cash flows.
As a result of rapid technological progress, and the trend towards technological convergence,
there is a danger that new and established information and telecommunications technologies or products
may not only fail to complement one another, but in some cases may even substitute for one another. An
example of this is VoIP, a technology that is already established in the business customer market. VoIP
has now reached the consumer market as well and, as a technology that competes directly with
traditional fixed-line telephony services, has the potential to reduce our market share and revenues in our
fixed-line business. The introduction of mobile handsets with VoIP functionality may also adversely affect
our pricing structures and market share in our mobile voice telephony business, particularly in countries
where we have a large market share. If we do not appropriately anticipate the demand for new
technologies, and adapt our strategies and cost structures accordingly, we may be unable to compete
effectively, with the result that our business activities, financial condition and results may suffer.
In addition, there is a risk that we will not succeed in making customers sufficiently aware of
existing and future value-added services or in creating customer acceptance of these services at the
prices we would want to charge. There is a risk that we will not identify trends correctly, or that we will not
be able to bring new services to market as quickly or price-competitively as our competitors. These risks
exist, in particular, with respect to our anticipated future growth drivers in the mobile telecommunications
area (e.g., mobile data services provided via UMTS or other technologies) and in the fixed -line
telecommunications area (e.g., triple-play services). Accordingly, there is risk that the return on our
investments, in particular in UMTS licenses and network infrastructure, may be negatively affected, which
could result in significant write-downs of the value of our UMTS or other licenses or other network-related
investments.
The business model of our Business Customers strategic business area is focused on
implementing major projects in the telecommunications, media & utilities, manufacturing, services, finance
and public industry sectors. Because of their scale and complexity, and because of the nature of the
contractual agreements that govern them, these projects could give rise to extensive customer claims
with respect to warranties, damages or contractual penalties where the service provided by T-Systems is
deemed to be unsatisfactory.
Lawsuits filed by some T-Online shareholders may further delay our planned merger with
T-Online International AG, which could have a negative effect on our results.
On April 29, 2005, the annual general shareholders' meeting of T-Online International AG ("T-
Online") approved the agreement concluded with Deutsche Telekom on March 8, 2005, on the merger of
T-Online into Deutsche Telekom. Some T-Online shareholders have filed lawsuits challenging the validity
of the resolution of the shareholders' meeting approving the merger. The entry of the merger in the
commercial registers of the two companies may only take place, and therefore the merger will only
become effective, once the competent court rules finally and conclusively in an accelerated proceeding
6

that the lawsuits do not prevent the entry of the merger in the commercial registers (a "release decision"),
or if the court finally and conclusively rejects the lawsuits, or if such lawsuits are withdrawn. The Court of
Appeals in Frankfurt am Main, as the court of second instance, issued a release decision in
February 2006. This decision however is not yet final and binding; appeals have been filed by some of the
opposing parties in the release proceedings, such opposing parties being shareholders who have filed
lawsuits challenging the validity of the resolution approving the merger.
A delay in the completion of this merger means that planned synergies may not be realized. For
example, until the merger it will not be possible to effectively meet the growing demand for a portfolio with
fully integrated products, consisting in particular of fixed network telephony and Internet, potentially
supplemented by media content. This situation, coupled with the multiple service provider relationships
and contacts, makes it more difficult to attract and retain customers.
After the merger of T-Online into Deutsche Telekom has become effective, T-Online shareholders
who received Deutsche Telekom shares in return for their T-Online shares in the course of the merger
can file a legal challenge to have the exchange ratio set forth in the merger agreement reviewed. During
the course of this valuation proceeding, the court might, for a variety of reasons, come to the conclusion
that the exchange ratio set forth in the merger agreement is too low, from the perspective of the T-Online
shareholders, and that the T-Online shareholders should, therefore, be granted a supplementary cash
payment.
Investors wishing to hold T-Online shares, but not Deutsche Telekom shares, may sell the
Deutsche Telekom shares they receive or expect to receive in the course of the merger. This could put
pressure on the market price of our shares.
Failures to achieve our planned reduction and restructuring of personnel could negatively
affect our financial objectives and profitability.
We announced an extensive personnel-restructuring program for our operations in Germany in
October 2005, under which approximately 19,000 employees will leave the group by 2008. When making
these reductions, we will adhere to the agreement with the trade unions not to enforce any compulsory
redundancies until the end of 2008, and to the moratorium on redundancies agreed under the 2004
employment alliance.
We plan targeted, group-specific measures to implement the personnel-restructuring program.
Part of this reduction is to be realized through partial retirement arrangements for salaried employees
subject to collective bargaining agreements (non-civil servants.) These plans could be put at risk by
possible changes in the law. There are also plans to encourage employees to leave the group, using
severance programs based on voluntary arrangements. The implementation of these plans will depend
on general developments in the labor market and on the details of the voluntary redundancy program.
A critical factor for the overall success of the personnel -restructuring program will be the
availability of competitive, flexible and performance-oriented terms and conditions of employment with our
civil servants. We expect that a new law providing for this increased flexibility will be adopted in 2006.
The successful realization of the staff reduction program depends on a range of factors that are
beyond our control, such as the successful deconsolidation of our Vivento operating businesses (call-
center and technology maintenance businesses), the market for our retrained labor force and the factors
mentioned abo ve. If the planned staff-reduction targets are not achieved, our financial and business
objectives may not be achieved, which would have a negative effect on our operating expenses and
profitability.
Alleged health risks of wireless communications devices have led to litigation affecting T-
Mobile, and could lead to decreased wireless communications usage or increased difficulty in
obtaining sites for base stations and, thus, adversely affect the financial condition and results of
operations of our mobile telecommunications services business.
Media reports have suggested that radio frequency emissions from wireless mobile devices and
cell sites may raise various health concerns, including cancer, and may interfere with various electronic
7

medical devices, including hearing aids and pacemakers. Research and studies are ongoing. The World
Health Organization (WHO) has declared that, on the basis of current scientific knowledge, there are no
known adverse effects on health below the international threshold standards, nor is it expecting any
serious dangers to arise in the future--although it does recommend continued research due to the
ongoing scientific uncertainty. We cannot be certain that medical research in the future will dismiss any
and all links between radio-frequency emissions and health risks.
Whether or not such research or studies conclude there is a link between radio-frequency
emissions and health, popular concerns about radio-frequency emissions may discourage the use of
wireless mobile devices and may result in significant restrictions on both the location and operation of cell
sites, either or both of which could have a material adverse effect on our or T-Mobile's results of
operations.
T-Mobile USA is subject to current, and potential, litigation relating to these health concerns.
Several amended class action lawsuits have been filed in the United States against T-Mobile USA and
several other wireless-service operators and wireless-telephone manufacturers, asserting products
liability, breach of warranty and other claims relating to radio- frequency transmissions to and from
wireless mobile devices. The complaints seek substantial monetary damages as well as injunctive relief.
The defense of these lawsuits may divert management's attention, and T-Mobile USA may be required to
pay significant awards or settlements and incur significant expenses in defending these lawsuits.
We do not know whether legislators, regulators or private litigants will refrain from taking other
actions adverse to us, based on the purported health-related risks associated with radio-frequency
emissions. Any such litigation, legislation or adverse actions may result in additional costs and loss of
revenues in our Mobile Communications strategic business area.
System failures due to natural or man-made disruptions could result in reduced user
traffic and reduced revenues and could harm our reputation and results.
Our technical infrastructure (including our network infrastructure for fixed-line network services
and mobile telecommunications services) may be damaged or disrupted by fire, lightning, flooding and
other calamities, technology failures, human error, terrorist attacks, hacker attacks and malicious actions,
and other similar events. We attempt to mitigate these risks by employing a large number of measures,
including backup systems and protective systems such as firewalls, virus scanners, and building security.
We cannot, however, be certain that these measures will be effective under all circumstances and that
disruptions or damage will not occur. Damage or disruption to our infrastructure may result in reduced
user traffic and revenues, increased costs, and damage to our reputation.
Shortcomings in our supply and procurement process could negatively affect our product
portfolio, revenues and profits.
As a fully integrated ICT service provider, we cooperate with a wide range of different suppliers
for technical components and assemblies, as well as for software and other goods and information
important to the conduct of our business. Although we do not believe that we are materially dependent on
any single supplier, disruptions in our chain of supply could negatively affect our product portfolio, cost
structure, revenues and profits. We take a variety of measures to shelter ourselves from these risks, but
we cannot be sure that these measures will be effective under all circumstances.
We are continuously involved in disputes and litigation with regulators, competitors and
other parties. The ultimate outcome of such legal proceedings is generally uncertain. When finally
concluded, they may have a material adverse effect on our results of operations and financial
condition.
We are subject to numerous risks relating to legal and regulatory proceedings, in which we are
currently a party or which could develop in the future. Litigation and regulatory proceedings are inherently
unpredictable. Legal or regulatory proceedings in which we are or come to be involved (or settlements
thereof) may have a material adverse effect on our results of operations or financial condition.
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