425 1 y43985e425.txt FILING PURSUANT TO RULE 425 1 Filed by Deutsche Telekom AG Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: VoiceStream Wireless Corporation Exchange Act File Number 000 29667 THE FOLLOWING WAS POSTED ON DEUTSCHE TELEKOM AG'S WEBSITE ON JANUARY 2, 2001. 2 Deutsche Telekom Dr. Ron Sommer January 2001 Deutsche Telekom 3 Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking statements within the meaning of the safe-harbor provisions of the U.S. federal securities laws. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors that are beyond the company's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of governmental regulators and other risk factors detailed in Deutsche Telekom's, VoiceStream's, and Powertel's reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation. Investors and security holders are advised to read the proxy statement/prospectus regarding the business combination transactions referenced in this presentation, which has been preliminarily filed with the Securities and Exchange Commission (the "Commission") and any amendments thereto because it contains, and any amendments thereto will contain, important information. The proxy statement/prospectus has been filed with the Commission by Deutsche Telekom AG, VoiceStream Wireless Corporation and Powertel, Inc. Security holders may obtain a free copy of the proxy statement/prospectus and other related documents filed by Deutsche Telekom, VoiceStream, and Powertel at the Commission's website or at the Commission's public reference room in Washington, D.C. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. The proxy statement/prospectus and the other documents may also be obtained from Deutsche Telekom by contacting Deutsche Telekom, Attention: Petra Michalscheck, Investor Relations, 140 Friedrich-Ebert-Allee, 53113 Bonn, Germany and/or Deutsche Telekom, Inc., Attention: Brigitte Weniger, 280 Park Avenue, 26th Floor, New York, New York 10017; Deutsche Telekom Page 2 4 Digestion phase Setting the stage - Environment for telcos has changed through UMTS licenses and build-out costs - Financing has developed into a key competitive advantage - Europe is changing from a sellers' to a buyers' market with an impact on company prices - Political environment not ripe for European consolidation yet We are not missing out on anything in the short term Deutsche January 2001 Telekom Page 3 5 Key priorities A full program for the near future
Recent acquisitions E billion* ------------------- ---------- VoiceStream(pending) 59.7 One2One 11.3 Powertel(pending) 6.9 debis Systemhaus 4.4 MATAV (increase) 2.2 Media One 2.1 Club Internet 1.9 max.mobil. (increase) 1.1 Slovak Telecom 1.0 Croatian Telecom 0.8 comdirect 0.7 SIRIS 0.7 Ya.com 0.6 Beta research 0.5 ---- Total 93.9
* At time of announcement. - Integrating acquisitions amounting to E94 billion - Improving operational performance - Building the business of tomorrow based on UMTS, system solutions and broadband Internet Deutsche January 2001 Telekom Page 4 6 Self-financing capability Q1-Q3/2000
Cash effects E billion ------------ --------- Global One 2.9 T-Online 3.1 WIND 2.7* Cable NRW+Hesse 3.0 Cash Flow 7.0 ---- Total 18.7
* Payable to H1/2001 - Non-core asset disposals started well ahead of competition - Portfolio streamlining program to continue over the foreseeable future - Strong cashflow and further carve outs planned Deutsche January 2001 Telekom Page 5 7 U.S. mobile market The right market at the right time - Due to the regulatory environment (734 different 800 MHz and 493 different 1,900 MHz license areas) and 5 different technical standards (analog, CDMA, TDMA, GSM, iDEN), the development of the U.S. mobile market is lagging behind Europe/Japan - Assuming an 85% penetration rate for the U.S., the market still has a potential for 150 million new wireless customers Deutsche January 2001 Telekom Page 6 8 Financial highlights Q1-Q3/2000 compared to 1999
E billions Q1-Q3/00 Q1-Q3/99 (delta)% 1) ---------- -------- -------- ----------- Revenue 29.2 25.6 + 14.3% EBITDA 2) 17.7 11.3 + 57.3% Consolidated net income 3) 8.4 1.3 + 575% EPS (in Euro) 2.8 0.4 + 534%
E billions 30/09/00 30/09/99 (delta)% ---------- -------- -------- -------- Gross financial liabilities 62.1 38.5 + 61.3% Net financial liabilities 55.4 22.1 + 150% Employees (Group) 4) 207,568 193,076 + 7.4% - of which DTAG 129,151 142,567 - 9.4%
1) Based on exact million figures. 2) Including sale of GlobalOne, Wind, CATV NRW+Hesse, dilution T-Online, comdirect, MTS, asset disposal, and others. 3) According to German GAAP. 4) Absolute numbers. Deutsche January 2001 Telekom Page 7 9 Growth drivers Strong operational performance
1999- Q3/99- Million Q3/00 1999 Q3/99 Q3/00 Q3/00 ------- ----- ---- ----- ----- ------ MAJORITY-CONTROLLED MOBILE SUBSCRIBERS 26.5 15.7 13.1 69% 102% - Germany: T-Mobil (GSM) 16.1 9.1 7.7 77% 109% - U.K.: One 2 One 7.1 4.2 3.3 69% 115% - Austria: max.mobil. 1.9 1.5 1.3 27% 46% - Hungary: Westel* 1.4 0.9 0.8 56% 75% T-ONLINE ACCOUNTS** 7.0 4.2 3.6 67% 94% TELEPHONE LINES (INCL. ISDN CHANNELS) 48.9 47.8 47.4 2% 3% of which: ISDN channels 16.2 13.3 12.4 22% 31% - residential customers*** 7.6 6.0 5.4 27% 41% - business customers*** 8.6 7.3 7.0 18% 23%
* Held directly and indirectly by MATAV, adjusted by 1999 figures. ** Including 0.5 million Club Internet and 0.5 million Ya.com subscribers. *** In 2000, small and medium-sized enterprises were reclassified under business customers. Deutsche January 2001 Telekom Page 8 10 Mobile communications EBITDA improvement in Q3/2000 [BAR CHART]
EBITDA* per quarter Margins (E million) Q1/00 412 22% Q2/00 168 8% Q3/00 546 23%
* Unadjusted - Revenue growth of 95% - Strong EBITDA improvement in Q3 predominantly driven by German operation: - lower SACs on prepay compared to Q1 and Q2 - Increase in contract ARPU to E47.7 in Q3 (Q2:E46) - Prepay ARPU stabilized at E12 in Q3 (Q2:E12.3) despite continuous strong customer growth Deutsche January 2001 Telekom Page 9 11 T-Mobil (Germany) Strong growth and stable market shares [PIE CHART]
1999 ---- T-D1 39% D2 41% e-plus 16% E2 4%
23.2 million customers [PIE CHART]
H1 2000 ------- T-D1 39% D2 41% e-plus 15% E2 5%
34.0 million customers [PIE CHART]
Q3 2000 ------- T-D1 40% D2 41% e-plus 14% E2 6%
40.7 million customers Source: Telecom-Handel Deutsche January 2001 Telekom Page 10 12 Mobile penetration in Germany Subscriber acquisition costs decrease as penetration levels out [PENETRATION % LINE GRAPH] [SUBSCRIBER ACQUISITION COSTS VS. SUBSCRIBER RETENTION COSTS] [Chart describing increase in penetration levels between 1995 and 2003 (estimates for 2000-2003) from less than 10% in 1995 to over 80% by 2003 and subscriber acquisition and retention costs] Deutsche January 2001 Telekom Page 11 13 One2One Increasing market share [PIE CHART]
1999 ---- One2One 17% Orange 21% Cellnet 29% Vodafone 33%
23.9 million customers [PIE CHART]
H1 2000 ------- One2One 20% Orange 23% Cellnet 26% Vodafone 31%
30.7 million customers [PIE CHART]
Q3 2000 ------- One2One 21% Orange 24% Cellnet 25% Vodafone 30%
34.4 million customers Source: One2One Deutsche January 2001 Telekom Page 12 14 Eastern Europe(1) Strong positioning in Central and Eastern Europe
max.mobil. RadioMobil* PTC** MTS*** ---------- ----------- ----- ------ Penetration Q3 2000 63.8% 32.1% 15.4% 14% GSM Market share Q3 2000 37.8% 45.0% 43.1% 52.0% Subscribers Q3 2000 (million) 1.9 1.5 2.5 0.9 Net revenues Q1-Q3/00 (E mn) 744 346 656 349 EBITDA Q1-Q3/00 (E mn) 85 118 205 182
* Option exercised to increase indirect shareholding in RadioMobil from 41.4% to 52.0% in H1/2001. ** 22.5% shareholding held by TMO, with further 22.5% held by Deutsche Telekom. *** Shareholding of 36.2%. Deutsche January 2001 Telekom Page 13 15 Eastern Europe(2) Leading mobile operators in Hungary and Croatia
Westel Croatia Telecom ------ --------------- Penetration rate Q3 2000 25% 20% GSM market share Q3 2000 55% 48% Mobile subscribers Q3 2000 (`000) 1,432 429 Net revenues Q1-Q3/00 (E mn) 1,266 610 EBT Q1-Q3/00 (E mn) 350 126
Deutsche January 2001 Telekom Page 14 16 T-Mobile UMTS in all countries with operations European UMTS landscape [EUROPEAN UMTS LANDSCAPE GRAPHIC] Successful bids 1. U.K.: GBP 4.0 billion (69 GBP per POP) 2. Germany: E8.5 billion (E104 per POP) 3. Netherlands: E395 million (E41 per POP) 4. Austria E170 million (E21 per POP) Deutsche January 2001 Telekom Page 15 17 Projected T-D1 customer migration Assuming 6 UMTS players and full migration to 3G at end of 2010 [PROJECTED T-D1 CUSTOMER MIGRATION BAR CHART] [Chart describing full migration from 2G/2.5G to 3G from 1998 to the end of 2010 as rising from 5 million 2/G2.5G subscribers in 1998 to 25 million 3G subscribers in 2010] Deutsche January 2001 Telekom Page 16 18 T-Motion Up and Running [PHONE GRAPHIC] - Headquartered in London with currently more than 100 employees - German portal launched at end of September Operational statistics (6 weeks after launch) - Number of subscribers > 10,000 - Accesses per day > 60,000 - Average usage time per session: 2 min - Most popular services: 1. Information (News, Business news, Weather) : 25% of all hits 2. Community (Dating Zone, Chat, Pride Guide) : 16% of all hits 3. Search (Phone directory, Yellow pages, Doctor search, Jobs) : 15% of all hits Deutsche January 2001 Telekom Page 17 19 T-Online Strong growth in minutes and e-commerce revenues Access: minutes/month/subscriber H1/1997 190 H2/1997 205 H1/1998 225 H2/1998 245 H1/1999 300 H2/1999 350 Q1-Q3 2000 501
e-commerce and advertising revenues E million Q1/00 15.9 Q2/00 17.4 Q3/00 27.8
Source: Company data Deutsche January 2001 Telekom Page 18 20 T-Systems Milestones along the path to success 2000 Q3/2000 20.09. Regulatory approval (Federal Cartel Office) Q4/2000 01.10. Closing debis Systemhaus 01.10. Start of integration process 01.10. First-time consolidation of debis 16.11. New CEO announced 30.11. Implementation plans and budget Q1/2001 01.01. Launch of T-Systems brand 01.01. Joint market presence Q2/2001 01.01. Joint market presence Q3/2001 01.01. Joint market presence Q4/2001 01.01. Joint market presence 2002 Deutsche January 2001 Telekom Page 19 21 Network communications EBITDA remains stable [BAR CHART]
EBITDA* per quarter E million Margins ------------- ------- Q1/00 1,535 38.6% Q2/00 1,560 43.0% Q3/00 1,576 44.1%
* Unadjusted - Stable EBITDA and margins - EBITDA negatively influenced in Q1 by disposition of non-current assets and additions to accruals (approx. E260 million) - Accumulated EBITDA Q1-Q3: E4.7bn Deutsche January 2001 Telekom Page 20 22 Network communications Diminishing dependence on long-distance revenues Revenues E billion [BAR CHART]
Long-distance revenues Total revenues % of Total revenues ---------------------- -------------- ------------------- Q1-Q3/98 6.4 26.0 24.7% Q1-Q3/99 3.4 25.6 13.1% Q1-Q3/00 2.3 29.2 8.0%
- Long distance versus total revenues has decreased from 25% in Q3/1998 to only 8% in Q3/2000 - A long-distance call to New York costs as much as a long distance call to Hamburg - We have among the most competitive long-distance call rates in the world Deutsche January 2001 Telekom Page 21 23 T-Com T-DSL tariff initiatives and calling plans boost access growth T-DSL Contracts (thousands) [BAR CHART] Jan 5 Feb 7 Mar 10 Apr 16 May 44 Jun 57 Jul 75 Aug 122 Sep 223 Oct 322 Nov 450 Dec* 540
* As of December 18, 2000 Current run rate approximately 30,000 new contracts per week AktivPlus [BAR CHART SHOWING GROWTH OF AKTIVPLUS CUSTOMERS FROM JANUARY 2000 TO DECEMBER 8, 2000] 420% growth since year-end 1999 Deutsche January 2001 Telekom Page 22 24 Deutsche Telekom A unique growth story - Closing of Voice Stream number one priority - Significant push in mobile data: GPRS and T-Motion - Leveraging T-Online's market leadership to grow advertising and e-commerce revenues - Creation of T-Systems as the second largest systems integrator in Europe - Expanding our position as Europe's premier DSL provider Deutsche January 2001 Telekom Page 23