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Filed by Deutsche Telekom AG
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Powertel, Inc.
Exchange Act File Number 000 23102
THE FOLLOWING IS A SLIDE PRESENTATION USED BY DEUTSCHE TELEKOM AG ON NOVEMBER
30, 2000.
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Deutsche Telekom
Conference Call
November 30, 2000
Deutsche Telekom Conference Call; November 30, 2000
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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 companies' 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 (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 rooms in New York, New York and Chicago,
Illinois. Please call the Commission at 1-800-SEC-0330 for further information
on the public reference rooms. 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 Conference Call; November 30, 2000
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Strategy and Highlights
Dr. Ron Sommer
CEO
Deutsche Telekom Conference Call; November 30, 2000
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Highlights
Delivering on promises
- T-Mobile
- VoiceStream/Powertel: closing expected H1/01
- UMTS licences secured in all countries with existing operations
- Subscriber base doubled to 26.5 million
- T-Motion up and running
- T-Online
- Expanding European leadership with 7 million subscribers
- Ya.com closed in October 2000
- T-Systems
- Green light for debis Systemhaus closing - new CEO in place
- Newly created electronic market places demonstrate B2B leadership
- T-Com
- Over 450,000 T-DSL accesses sold (as per November 27)
- T-ISDN and calling plans increasingly important for access revenues
- Strong volume growth in PSTN of 18.1% to 164 billion minutes
Deutsche Telekom Conference Call; November 30, 2000
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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 Telekom Conference Call; November 30, 2000
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Key Priorities
A full program for the near future
<TABLE>
<CAPTION>
RECENT ACQUISITIONS E BILLION*
------------------- ----------
<S> <C>
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
====
</TABLE>
*At time of announcement.
- Integrating acquisitions amounting to E 94 billion
- Improving operational performance
- Building the business of tomorrow based on UMTS, system solutions and
broadband internet
Deutsche Telekom Conference Call; November 30, 2000
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US 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 (analogue,
CDMA, TDMA, GSM, iDEN), the development of the US 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
- According to our experience in Germany only approximately 50% of analogue
customers can be migrated within the same operator. For the U.S. this would
mean an additional 35-40 million potential customers for the digital
networks
Deutsche Telekom Conference Call; November 30, 2000
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The German
Telecommunications Market (1)
One of the most liberal markets in the world
- Unbundling of the local loop and wireless local loop
- Mandatory billing for competitors
- Free number portability
- Call-by-call and preselection
- Interconnection (call-origination and termination)
- Regulation on prices (incl. price-cap)
- Universal service obligation
Deutsche Telekom Conference Call; November 30, 2000
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The German
Telecommunications Market* (2)
One of the most liberal markets in the world
- 443 licences issued to run a fixed network or offer voice telephony
services
- Deutsche Telekom has signed interconnection agreements with 118 competitors
- Agreements on access to the unbundled local loop signed with 93 competitors
- Over 4,000 co-location rooms installed
- Over 50,000 Interconnection ports installed
*All Data as of September 30, 2000
Deutsche Telekom Conference Call; November 30, 2000
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Growth Drivers
Strong operational performance
<TABLE>
<CAPTION>
Million Q3/00 1999 Q3/99 1999-Q3/00 Q3/99-Q3/00
<S> <C> <C> <C> <C> <C>
MAJORITY-CONTROLLED MOBILE SUBSCRIBERS 26.5 15.7 13.1 69% 102%
- Germany: T-Mobil (GSM) 16.1 9.1 7.7 77% 109%
- UK: 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%
</TABLE>
* 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 Telekom Conference Call; November 30, 2000
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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 2G/2.5G subscribers in 1998 to 25 million 3G
subscribers in 2010]
Deutsche Telekom Conference Call; November 30, 2000
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T-MOTION
Up and Running
- 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
- Best used services
[NOKIA-CELL PHONE GRAPHIC]
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 Telekom Conference Call; November 30, 2000
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T-ONLINE
Strong growth in minutes and e-commerce revenues
ACCESS : MINUTES/MONTH/SUBSCRIBER
[SUBSCRIBER ACCESS BAR GRAPH]
<TABLE>
<CAPTION>
1997 1998 1999 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
H1/ 190 225 300
H2/ 205 245 350
Q1-Q3 501
</TABLE>
E-COMMERCE AND ADVERTISING REVENUES
[E-COMMERCE AND ADVERTISING REVENUES BAR GRAPH]
<TABLE>
<CAPTION>
Q1/00 Q2/00 Q3/00
----- ----- -----
E million
<S> <C> <C>
15.9 17.4 27.8
</TABLE>
Source: Company data
Deutsche Telekom Conference Call; November 30, 2000
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T-SYSTEMS
MILESTONES ALONG THE PATH TO SUCCESS
<TABLE>
<CAPTION>
2000 2001 2002
-----------------------------------------------------------------------------------------------------------------------------------
Q3/2000 Q4/2000 Q1/2001 Q2/2001 Q3/2001 Q4/2001
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Regulatory approval (Federal Cartel Office) 20.09
Closing debis Systemhaus 01.10
Start of integration process 01.10
First time consolidation of debis 01.10
New CEO announced 16.11
Implementation plans and budget 30.11
Launch of T-Systems brand 01.01
Joint market presence 01.01
</TABLE>
Deutsche Telekom Conference Call; November 30, 2000
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T-COM
T-DSL TARIFF INITIATIVES AND CALLING PLANS BOOST ACCESS GROWTH
[T-DSL BAR CHART]
Contracts (thousands)
<TABLE>
<CAPTION>
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 7 10 16 44 57 75 122 223 322 450
T-DSL
</TABLE>
November runrate more than 30,000 new contracts per week
[AKTIVPLUS BAR CHART]
Customers (millions)
[Chart describing growth in customers beginning at 1 million customers in
January to 3.5 million customers as of November 12, 2000]
366% growth since year end 1999
* As of November 27, 2000
** As of November 12, 2000
Deutsche Telekom Conference Call; November 30, 2000
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OUTLOOK
TRANSFORMATION GENERATES STRONG GROWTH IN PILLARS AND STABILIZES T-COM REVENUES
<TABLE>
<CAPTION>
T-Com
Revenue &
% of total T-Mobile* T-Online T-Systems Others**
<S> <C> <C> <C> <C>
Q3 2000 22% 2% 9% 67%
Q3 1999 13% 1% 8% 78%
</TABLE>
NETWORKS
* Including One2One and max.mobil.
** Including all other activities such as Carrier Services, Value Added
Service, Broadcasting and Broadband Cable, Terminal Equipment, MATAV
and SIRIS.
Please note that this revenue breakdown deviates from our normal segment
reporting according to FAS 131.
Deutsche Telekom Conference Call; November 30, 2000
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FINANCIALS
DR. KARL-GERHARD EICK
CFO
Deutsche Telekom Conference Call; November 30, 2000
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FINANCIAL HIGHLIGHTS
Q1 - Q3/2000 compared to 1999
<TABLE>
<CAPTION>
E billions Q1-Q3/00 Q1-Q3/99 (change)%(1)
---------- -------- -------- ------------
<S> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
E billions 30/09/00 30/09/99 (change)%
---------- -------- -------- -----------
<S> <C> <C> <C>
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%
</TABLE>
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 Telekom Conference Call; November 30, 2000
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SELF FINANCING CAPABILITY
Q1 - Q3/2000
<TABLE>
<CAPTION>
Cash Effects E Billion
------------ ---------
<S> <C>
Global One 2.9
T-Online 3.1
WIND 2.7*
Cable NRW+Hesse 3.0
Cash Flow 7.0
-------
Total 18.7
=======
</TABLE>
* 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 Telekom Conference Call; November 30, 2000
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MOBILE COMMUNICATIONS
EBITDA improvement in Q3/2000
[EBITDA BAR GRAPH]
EBITDA* per quarter
<TABLE>
<CAPTION>
Q1/00 Q2/00 Q3/00
----- ----- -----
E million
<S> <C> <C> <C>
412 168 546
Margins 22% 8% 23%
</TABLE>
* 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 E 47.7 in Q3 (Q2:E 46)
- Prepay ARPU stabilized at E 12 in Q3 (Q2: E 12.3) despite
continuous strong customer growth
- Q3 EBDITA also positively influenced by MTS-IPO (E 110M)
Deutsche Telekom Conference Call; November 30, 2000
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MOBILE PENETRATION IN GERMANY
Subscriber acquisition costs decrease as penetration levels out
Penetration %
[PENETRATION % LINE GRAPH]
[SUBSCRIBER ACQUISITION AND RETENTION COSTS]
[Chart describing increase in penetration levels between 1995 and 2003 from less
than 10% in 1995 to over 80% by 2003 and subscriber acquisition and retention
costs]
Deutsche Telekom Conference Call; November 30, 2000
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T-ONLINE*
Importance of non-access revenues grows
REVENUES/NON-ACCESS REVENUES
[BAR GRAPH]
<TABLE>
<CAPTION>
Q1/00 Q2/00 Q3/00
------ ----- -----
<S> <C> <C> <C>
Total revenue in Euros(m) 173.8 179.1 189.6
% of non-access revenue 11.4% 12.2% 17.1%
</TABLE>
- Non-access revenues grow to 17.1% of total revenues in Q3/00
- Nine months revenue grows by 86.5 % to E542.6 million
- EBITDA in first nine months at E -14.4 million (E -53.5 million
excluding comdirect-IPO)
* On a standalone basis
Deutsche Telekom Conference Call; November 30, 2000
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DATA COMMUNICATIONS
Participating in strong market growth
EBITDA* PER QUARTER
[BAR GRAPH]
<TABLE>
<CAPTION>
Q1/00 Q2/00 Q3/00
------ ----- -----
E million
<S> <C> <C> <C>
Ebitda 261 350 373
Margins 35.2% 39.3% 39.6%
</TABLE>
- Revenue growth of 21.2% compared with 12.2% in the same period of the
previous year
- In Q1 EBITDA was negatively influenced by approximately E80 million
relating to the disposal of non-current assets and additions to accruals
- Shift from commodity products to managed networks
* Unadjusted
Deutsche Telekom Conference Call; November 30, 2000
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NETWORK COMMUNICATIONS
Diminishing dependence on long distance revenues
[REVENUES BAR GRAPH]
<TABLE>
<CAPTION>
Q1-Q3/98 Q1-Q3/99 Q1-Q3/00
-------- -------- --------
E billion
<S> <C> <C> <C>
Total revenues 26.0 25.6 29.2
Long distance revenues 6.4 3.4 2.3
Long distance vs total revenues 24.7% 13.1% 8.0%
</TABLE>
- 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 one of the most competitive long distances call rates in the
world
Deutsche Telekom Conference Call; November 30, 2000
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NETWORK COMMUNICATIONS
EBITDA remains stable
[EBITDA* PER QUARTER BAR CHART]
<TABLE>
<CAPTION>
Q1/00 Q2/00 Q3/00
------ ----- -----
E million
<S> <C> <C> <C>
EBITDA 1,535 1,560 1,576
Margins 38.6% 43.0% 44.1%
</TABLE>
- Stable EBITDA and margins
- EBITDA negatively influenced in Q1 by disposition of non-current assets
and additions to accruals (approx. E 260 million)
- Accumulated EBITDA Q1-Q3: E 4.7bn
* Unadjusted
Deutsche Telekom Conference Call; November 30, 2000
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EBITDA MARGINS BY SEGMENT*
Strong third quarter 2000
<TABLE>
<CAPTION>
Q1/00
EBITDA (%) -
Q1/00 Q2/00 Q3/00 Q3/00
----- ----- ----- -----
<S> <C> <C> <C> <C>
Network communications 38.6 43.0 44.1 41.8
Carrier services 22.3 36.7 55.1 39.6
Data communications 35.2 39.3 39.6 38.2
Mobile communications 21.8 7.7 23.1 17.5
Broadcasting/broadband cable 61.7 50.5 771.3 263.1
Terminal equipment 23.4 7.1 6.3 12.7
Value-added services 13.3 9.3 3.1 8.4
Other international activities 31.9 41.4 36.2 36.6
Other segments 732.2 837.9 -2.2 533.1
----- ----- --- -----
Deutsche Telekom Group 59.2 57.0 65.6 60.7
----- ----- --- -----
</TABLE>
* Including sale of GlobalOne, Wind, CATV NRW+Hesse, dilution T-Online,
comdirect, MTS, asset disposal, and others.
Deutsche Telekom Conference Call; November 30, 2000
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OUTLOOK
- Expected revenue growth for 2000 between 14% and 15%
- Mobile EBITDA margin may temporarily decrease in Q4 due to the Christmas
business
- Consolidation of debis Systemhaus in Q4 2000 will increase data
communications revenues but will have a limited effect on EBITDA due to
the nature of the business
- International revenue contribution is expected to grow to over 25% of
group revenues in 2001
Deutsche Telekom Conference Call; November 30, 2000
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