<PAGE> 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
<PAGE> 2
THE FOLLOWING IS A PRESS RELEASE DISSEMINATED BY VOICESTREAM WIRELESS
CORPORATION ON JULY 24, 2000
<PAGE> 3
[VOICESTREAM LOGO]
DEUTSCHE TELEKOM TO ACQUIRE VOICESTREAM FOR $50.7
BILLION, CREATING FIRST WIRELESS OPERATOR USING GSM
STANDARD WORLDWIDE
VoiceStream Senior Management To Lead Deutsche Telekom's U.S.
Mobile Operations
Telekom To Make Separate $5 Billion Cash Investment In VoiceStream
To Accelerate Nationwide Build-out and Upgrade Network and Service
BELLEVUE, WA, July 23, 2000 - VoiceStream Wireless Corporation (NASDAQ: VSTR)
today announced that it has entered into a definitive merger agreement with
Deutsche Telekom AG (NYSE: DT) to form the first wireless operator utilizing the
GSM standard worldwide. The transaction, with a current equity value of
approximately $50.7 billion ($195.75 per current fully diluted VoiceStream share
based on Deutsche Telekom's Euro closing share price last Friday), will benefit
U.S. consumers by creating an even stronger national provider in the highly
competitive American wireless communications market. VoiceStream will have the
necessary capital resources, technology expertise and global reach to provide
cost-competitive service and accelerate the introduction of next-generation
voice and data services in the U.S.
Under the terms of the agreement, approved by the Boards of both companies,
VoiceStream shareholders will receive 3.2 Deutsche Telekom shares and $30 in
cash for each share of VoiceStream common stock, subject to certain adjustments.
VoiceStream shareholders will have the ability to make an all-stock or all-cash
election, subject to proration. Deutsche Telekom will also assume approximately
$5.0 billion in VoiceStream net debt. Owners of more than 50% of VoiceStream's
outstanding shares have agreed to vote in favor of the transaction.
VoiceStream will become part of Deutsche Telekom's mobile telephony group, which
is a separate subsidiary of Deutsche Telekom AG. VoiceStream senior management
will lead Telekom's U.S. mobile operations, continuing to use the VoiceStream
brand. As of March 31, 2000, T-Mobile together with VoiceStream and its joint
ventures had 19.8 million subscribers and licenses to provide services to
approximately 375 million people (POPs) worldwide.
Deutsche Telekom will make a separate cash investment of $5 billion in
VoiceStream in exchange for preferred stock convertible into common stock at a
price of $160 per share. The investment, expected to be made during the current
quarter subject to regulatory approval, will enable VoiceStream to accelerate
its nationwide build-out and upgrade its network and service.
"This is a compelling strategic opportunity for VoiceStream to partner with one
of the world's leading telecommunications companies," said John W. Stanton,
Chairman and CEO of VoiceStream, who will head Telekom's mobile operations in
the U.S. "It is also an extremely attractive opportunity for both sets of
shareholders and for our employees. We see enormous benefits for U.S. consumers,
as VoiceStream becomes an even more competitive national operator that can
accelerate the introduction of next-generation wireless voice and data services
such as mobile Internet and multimedia applications. Together, we can offer
seamless global services over a common technology platform and provide
customer-friendly features such as global
<PAGE> 4
roaming, unified billing and worldwide customer service."
"This transaction is a unique opportunity to enter the U.S. wireless
communications market, one of the most attractive in the world," said Dr. Ron
Sommer, Chairman and CEO of Deutsche Telekom. "American consumers will see an
acceleration in the rollout of state-of-the-art GSM technology. More Americans
will be able to have one phone, with one number, that they can use virtually
anywhere in the world - whether they are in Minneapolis, Munich or Melbourne. As
in other markets such as the U.K. with One 2 One, we are partnering with a
rapidly-growing, nationwide, domestic wireless company."
"VoiceStream is growing its subscriber base faster than any other national
wireless carrier in the United States. With licenses to serve approximately 220
million people in 23 of the top 25 U.S. markets, VoiceStream has only begun to
tap its extraordinary potential," said Jeffrey Hedberg, the Deutsche Telekom
Board member in charge of international operations. "At a valuation of
approximately $265 per POP, the consideration for VoiceStream compares very
favorably to other recent global wireless transactions. VoiceStream is also well
positioned for mobile data applications, a potentially explosive growth area as
booming U.S. Internet usage should drive heavy mobile data demand."
The transaction is subject to regulatory approvals, approval by VoiceStream
shareholders, and customary closing conditions. It is expected to be completed
in the first half of 2001.
Pro forma for the transaction, current VoiceStream shareholders will own
approximately 22% of Deutsche Telekom and the German Government's ownership of
Deutsche Telekom will be reduced to approximately 45%. The German Government has
stated its commitment to continue reducing its stake in Deutsche Telekom over
time subject to market conditions.
The transaction has been structured as a reorganization that will be tax-free to
VoiceStream's shareholders to the extent they receive stock of Deutsche Telekom.
Pursuant to the merger agreement, each share of common stock of VoiceStream will
be converted into the right to receive a combination of $30 in cash and 3.2
Deutsche Telekom Ordinary Shares, subject to adjustment. VoiceStream
shareholders may elect to receive in lieu of this combination either $200 in
cash or 3.7647 Deutsche Telekom Ordinary Shares, subject to the election and
proration procedures set forth in the merger agreement and subject to certain
other possible adjustments. Based on current fully diluted VoiceStream shares,
VoiceStream shareholders will receive in the aggregate approximately 829 million
Deutsche Telekom shares and approximately $7.8 billion in cash.
Up to an additional 48 million Deutsche Telekom shares may be acquired in
certain circumstances by VoiceStream joint venture partners should they become
entitled to exchange their joint venture interests for shares.
Deutsche Telekom is being advised by Donaldson, Lufkin & Jenrette and Dresdner
Kleinwort Benson. VoiceStream is being advised by Goldman, Sachs & Co.
ABOUT DEUTSCHE TELEKOM
Deutsche Telekom, with revenues of EUR 35.5 billion in 1999, is Europe's largest
telecommunications company and the third largest carrier worldwide. Deutsche
Telekom has over 14 million marketed ISDN channels, making the company the world
leader in ISDN. And with 5.3 million T-Online customers, the company is Europe's
largest Internet provider. Offering a complete range of products and services,
Deutsche Telekom has more than 48 million telephone lines in service. The
company also serves approximately 18.6 million majority-controlled mobile
telephony
<PAGE> 5
customers in Europe. Upon regulatory approval of the company's majority
investment in the information-technology group debis Systemhaus, Deutsche
Telekom will become the second largest player in Europe in providing information
technology solutions to multinational companies worldwide. Visit the Deutsche
Telekom web site at: www.telekom.de/international.
ABOUT VOICESTREAM
VoiceStream Wireless is a leading provider of wireless communications services
in the United States. VoiceStream Wireless with Cook Inlet Region Inc., has
licenses to provide service to over 220 million people with operating systems
from New York to Hawaii. With licenses in 23 of the top 25 markets VoiceStream
is one of the major providers of telecommunications services in the country.
VoiceStream is the largest provider of personal communications service using the
globally dominant GSM technology in the United States. Visit the VoiceStream
Wireless web site: www.voicestream.com.
This press release 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
and VoiceStream'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 press release. The companies
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 press release.
Investors and security holders are advised to read the proxy
statement/prospectus regarding the transaction referenced in this press release,
when it becomes available, because it will contain important information. The
proxy statement/prospectus will be filed with the Securities and Exchange
Commission by Deutsche Telekom and VoiceStream. Security holders may obtain a
free copy of the proxy statement/prospectus (when available) and other related
documents filed by Deutsche Telekom and VoiceStream at the Commission's website
at www.sec.gov. When available, 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 VoiceStream Wireless
Corporation by contacting VoiceStream Wireless Corporation, Attention: Ken
Prussing, Executive Director, Investor Relations, 3650 131st Avenue SE,
Bellevue, WA 98006.
VoiceStream Wireless Corporation, its directors, executive officers and certain
other members of VoiceStream management and employees may be soliciting proxies
from VoiceStream shareholders in favor of the merger. Information concerning the
participants will be set forth in the proxy statement/prospectus when it is
filed with the Securities and Exchange Commission.
Satellite coordinates for VoiceStream-Deutsche Telekom b-roll and soundbites:
When: Monday, July 24, 2000 Telstar 6, Transponder 7
4:45 am - 5:00 am E.T. Telstar 6, Transponder 8
9:30 am - 9:45 am E.T. Telstar 6, Transponder 8
12:45 pm - 1:00 pm E.T.
Audio: 6.2/6.8
###
FOR FURTHER INFORMATION, CONTACT:
<PAGE> 6
VOICESTREAM DEUTSCHE TELEKOM
Investors Investors
Ken Prussing Nils Paellmann
877-853-8682 212-424-2951
Media
Kim Thompson Media
425-653-5027 Ulrich Lissek
011-49-228-181-4949
George Sard/David Reno/Jim Barron
Citigate Sard Verbinnen Bill McAndrews
212-687-8080 212-521-4800 (through July 27)
011-49-228-181-94160 (after July 27)
Washington D.C.
Dale Leibach or Mark Day Todd Fogarty/Tom Davies
Shandwick Public Affairs Kekst and Company
202-383-9700 212-521-4800
<PAGE> 7
THE FOLLOWING IS A PRESS RELEASE DISSEMINATED IN EUROPE BY DEUTSCHE TELEKOM AG
ON JULY 24, 2000
<PAGE> 8
NOT TO BE RELEASED BEFORE MONDAY, 2.00 P.M.
Bonn/Hanover, 24 July 2000
Deutsche Telekom acquires VoiceStream for 50.7 billion dollars
Deal for 3.2 T-Shares 30 dollars per VoiceStream share - Telekom entering growth
market of 220 million potential customers - VoiceStream fastest grower on US
mobile communications market - Deutsche Telekom first genuinely global GSM
provider
Deutsche Telekom and the fastest growing US mobile come provider VoiceStream are
to enter into a strategic partnership. Deutsche Telekom will acquire the only US
company with a nationwide GSM network. This decision was taken on Sunday by the
Supervisory Boards of Deutsche Telekom and VoiceStream. "Because VoiceStream is
the U.S. company that is best suited to Deutsche Telekom - actually in an ideal
way - and that will integrate seamlessly into our 4-pillar growth strategy",
explained Deutsche Telekom Chairman Dr. Ron Sommer at a press conference in
Hanover on Monday. The four growth areas are mobile communications, online
services, data communications / systems solutions and network access.
"This is a convincing strategic opportunity for VoiceStream to enter into a
partnership with one of the leading telecommunications companies in the world,
which represents a very attractive prospect for our shareholders, employees and
customers", said John Stanton, Chairman of VoiceStream.
Deutsche Telekom AG
Press office
Headquarters, Pressestelle, Friedrich-Ebert-Allee 140, D-53113
Bonn, Germany
Postal address Postfach 20 00, D-53105 Bonn, Germany
Office nos. Phone + 49 228 1 81 - 49 49, Fax + 49 228 1 81 - 89 41, Telex
886668 gdt d,
Press releases available via T-Online *200002211#
<PAGE> 9
The transaction is to be made primarily by means of a share swap. VoiceStream
shareholders are being offered 3.2 Telekom shares plus 30 dollars per
VoiceStream share. Based on the closing price of the T-Share last Friday in
Frankfurt, this represents an offer of 50.7 billion dollars for 259 million
VoiceStream shares. Deutsche Telekom will issue 828.8 million T-Shares from the
capital authorized at its last shareholders' meeting on May 25, 2000. The total
number of T-Shares after the transaction will thus be around 3.858 million. The
stake held by the Federal Republic will fall from 58.2 percent to 45.7 percent.
Deutsche Telekom will also take over debts of 5.0 billion dollars from
VoiceStream. Current plans are for the transaction to be completed in the course
of the first half of 2001, subject to the approval of the relevant supervisory
authorities.
The contractual agreements will also include a so-called lock-up agreement with
the majority of the core shareholders, involving holding periods for the new
T-Shares, which are to be issued as part of the transaction.
TELEKOM BECOMES WORLD MARKET LEADER ON THE GSM MARKET
VoiceStream has licenses to operate in 23 of the 25 largest regional US markets.
This gives the company access to 220 million potential US customers. The current
network coverage allows access to around 100 million potential customers. At the
end of the first quarter, VoiceStream had 2.3 million customers. The plan is to
increase this number to 4 million by the end of the year. In 1999 VoiceStream
generated revenues of around 1 million euros.
The addition of VoiceStream will make Deutsche Telekom the world market leader
on the GSM market - far ahead of its nearest competitors. Together with
VoiceStream, the Group has a reach of 375 million potential mobile
communications customers, measured by the number of customers reachable by
companies in which Deutsche Telekom holds a majority
<PAGE> 10
stake. Studies forecast that the US mobile communications market will grow by
the end of 2003 by as many new customers as the markets in Germany, France,
Italy and Great Britain altogether. "So we are entering the right market at the
right time just before, to judge by general opinion, the start of a huge upturn
in growth, from which we hope to profit", emphasized Kai-Uwe Ricke, CEO of
T-Mobile International.
VoiceStream recorded growth of 18.5 percent in the first quarter of 2000, the
highest growth rate of all US mobile communications providers. VoiceStream
customers also generate above-average monthly revenues. The average for 1999 was
56.7 dollars. The US average is 46 dollars, the European average 44 dollars.
There will also be a considerable boost in growth from the convergence of mobile
and online communications. Mobile data transmission at ISDN level is possible
with a nationwide GPRS network which Deutsche Telekom will put into operation
this summer. VoiceStream is also starting GPRS operations this year. This will
open up whole new areas of application for the mobile Internet.
195/00
<PAGE> 11
THE FOLLOWING IS A PRESS RELEASE DISSEMINATED IN EUROPE BY DEUTSCHE TELEKOM AG
ON JULY 24, 2000
<PAGE> 12
DEUTSCHE TELEKOM TO ACQUIRE VOICESTREAM FOR $50.7 BILLION
The transaction consists of a share swap and a cash offer -- creating a global
provider with 375 million potential subscribers
Deutsche Telekom AG and US-based VoiceStream have signed an agreement under
which Deutsche Telekom will acquire the only US wireless carrier that owns and
operates a GSM network nationwide. On Sunday, July 23, 2000, the Supervisory
Board of Deutsche Telekom and the Board of Directors of VoiceStream approved the
transaction, which will form the first trans-Atlantic GSM provider, with over
375 million potential subscribers based on the number of customers that can be
covered by majority-controlled companies. The primary component of the agreement
consists of a share exchange. VoiceStream shareholders will receive 3.2 Deutsche
Telekom shares and $30 in cash for each share of VoiceStream common stock.
Calculated on the basis of 259 million VoiceStream shares, this transaction is
currently valued at $50.7 billion based on Deutsche Telekom's Euro closing share
price as of Friday, July 21, 2000. Deutsche Telekom will issue 828.8 million new
T-shares from the authorized capital approved by shareholders at the Annual
General Meeting on May 25, 2000. In addition, Deutsche Telekom will assume
approximately $5 billion of VoiceStream net debt. It is expected that the
transaction will be completed during the first half of 2001, pending approval of
respective regulatory authorities.
The agreement calls for a so-called lock-up agreement with the majority of the
core shareholders. These core shareholders are required to hold
<PAGE> 13
their Deutsche Telekom shares received in this transaction for certain periods
of time.
Deutsche Telekom invites you to a press conference held this Monday at 2:00 pm
on the trade fair grounds in Hanover (Conference center Messe TCM, room Bonn) to
discuss the details of this transaction.
<PAGE> 14
THE FOLLOWING IS A SLIDE PRESENTATION GIVEN BEGINNING ON JULY 24, 2000
<PAGE> 15
Creation of first global GSM operator
Investor Presentation
July 2000
[DEUTSCHE TELEKOM LOGO] July 2000 [VOICESTREAM LOGO]
<PAGE> 16
Disclaimer
This presentation contains or may contain forward-looking statements within the
meaning of the U.S. private securities litigation reform act of 1995. It is
important to note that Deutsche Telekom's and VoiceStream's actual results could
differ materially from the results anticipated or projected in any such
forward-looking statements, based on a number of important factors. Deutsche
Telekom's and VoiceStream's filings with the U.S. Securities and Exchange
Commission (particularly their most recent reports on Form 20-F and Form 10-K,
respectively) contain cautionary statements identifying important factors
affecting such forward-looking statements, including certain risks and
uncertainties, that could cause actual results to differ materially from
projections contained in any forward-looking statements made by Deutsche Telekom
and VoiceStream.
Page 1
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Transaction overview
Page 2
<PAGE> 18
Creation of first global GSM operator
- VoiceStream transforms T-Mobile into the world's only global GSM operator
- Unique opportunity to enter the U.S. mobile market, with even higher growth
prospects than Europe
- Total consideration of $50.7 billion (euro 54.1 billion)(1), 85% in new
Deutsche Telekom shares and 15% in cash
- Full support of VoiceStream management and core shareholders (> 50% of
shares) to vote in favor of transaction
- VoiceStream management to lead T-Mobile's American operations
- Lock-up agreements secured with majority of core shareholders
- Transaction expected to be completed in H1 2001
(1) Based on closing prices on July 21, 2000
Page 3
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Delivering on promises
[GRAPHIC]
Strategy
Vision
Financials
Mobile Consumer Data Access
Internet IP
Systems
Networks
- Mobile - one of our four strategic businesses - is the most significant
growth area in the U.S. telecoms market
- VoiceStream is a major step in delivering our strategy of building all four
pillars in the U.S. market
Page 4
<PAGE> 20
Entry to high growth U.S. market
Additional subscribers required to reach 90% penetration (millions)
[BAR CHART]
<TABLE>
<CAPTION>
U.S. Germany France UK Italy
<S> <C> <C> <C> <C>
156.5 47.4 29.8 25.8 18.6
</TABLE>
- U.S. wireless penetration outlook strongly positive due to:
- Improved network quality
- Broader coverage
- More attractive customer value proposition
- Low U.S. penetration (33.5%)(1)should converge towards Western European
levels (44.8%)(1)
(1) Figures as of March 2000
Source: Financial Times Mobile Communications, CTIA
Page 5
<PAGE> 21
Market leadership: Leapfrogging competition
Controlled equity POPs
(controlled, proportionate)(1)
[BAR CHART]
<TABLE>
<CAPTION>
Deutsche
Telekom/
VoiceStream Vodafone Sprint PCS AT&T Wireless Nextel Verizon Wireless Orange BellSouth/SBC
<S> <C> <C> <C> <C> <C> <C> <C>
375 307 277 236 230 223 190 159
</TABLE>
(1) Based on proportionate ownership in the controlled companies
- Ranks #1 globally with approx. 375 million POPs (controlled, proportionate)
- Pure play mobile company with single technology
- Only GSM operator with controlling interests in the U.S. and major European
markets
- Unparalleled transatlantic roaming opportunity
- Ideal platform to develop 3G (UMTS) services
Page 6
<PAGE> 22
Leading presence in G7 countries
<TABLE>
<CAPTION>
Total Controlled
Company US GER UK FRA ITA CAN J POPs(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Deutsche Telekom/ 220 82 58 -- -- -- -- 360
VoiceStream
Sprint PCS 277 -- -- -- -- -- -- 277
Nextel 230 -- -- -- -- -- -- 230
Vodafone -- 82 58 -- 57 -- -- 197
NTT DoCoMo -- -- -- -- -- -- 126 126
Orange -- -- 58 59 -- -- -- 117
</TABLE>
(1) Based on proportionate ownership in the controlled companies
- We will control more POPs in the world's leading economies than any other
mobile company.
Page 7
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The right transaction
Right Market U.S. is the most attractive wireless market globally
Right Time Transaction timed just ahead of growth in U.S. mobile market
Right Company VoiceStream is the fastest growing operator in the U.S.
Right Management Proven VoiceStream management team to lead American wireless
business
Right Price Price paid in line with precedent transactions on an
enterprise value per POP basis
Page 8
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Overview of VoiceStream
Page 9
<PAGE> 25
National footprint
VoiceStream: license areas
[MAP GRAPHIC]
- Nation-wide GSM operator using 1900 MHz
- Licenses in 23 of the top 25 U.S. markets
- 220 million licensed POPs
- Over 100 million covered POPs currently and planned to exceed 120 million
by 2001
Page 10
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Fastest growing national U.S. mobile operator
[BAR CHART]
<TABLE>
<CAPTION>
Q1 2000 subscriber growth (%)
<S> <C>
VoiceStream(1) 18.5%
Sprint PCS 14.5%
Nextel 12.0%
AT&T Wireless 7.8%
SBC/BellSouth 5.1%
Verizon Wireless 4.0%
</TABLE>
(1) including Omnipoint and Aerial
Source: company data, DLJ research
Page 11
<PAGE> 27
Highest annualized penetration
[BAR CHART]
Annualized incremental penetration (per covered POPs)
<TABLE>
<CAPTION>
<S> <C>
VoiceStream(1) 2.60%
Sprint PCS 1.87%
VoiceStream pro forma(2) 1.63%
BellSouth/SBC 1.43%
Nextel 1.20%
AT&T Wireless 1.04%
</TABLE>
(1) Pre Aerial and Omnipoint acquisitions
(2) Aerial and Omnipoint included pro-forma
(3) After elimination of 160,000 Omnipoint customers
- 2.3 million subscribers at March 31, 2000(3)
- Expectation of 4.0 million subscribers by end 2000 -- effectively doubling
the base from end 1999
- Rapid increase via organic growth and recent acquisitions
- VoiceStream has consistently outperformed average quarterly penetration
gains for U.S. PCS operators
Page 12
<PAGE> 28
High ARPU
1999 ARPU ($ monthly)
[BAR CHART]
<TABLE>
<CAPTION>
<S> <C>
VoiceStream $ 56.72
U.S. average $ 46.00
European average $ 44.00
</TABLE>
- VoiceStream's ARPU significantly higher than U.S. and European average
- High minutes of usage by VoiceStream subscribers have generated rising
ARPU's even before mobile data contribution
Note: company data, CTIA, Dresdner Kleinwort Benson for 1999
Page 13
<PAGE> 29
Financial performance
Quarterly financial performance
[BAR CHART]
(1) VoiceStream excluding Omnipoint acquisition
Source: Company data
- VoiceStream has experienced seven straight quarters of positive cash flow
before marketing costs
- Expected to continue to see robust subscriber and revenue growth
Page 14
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Leadership in mobile data
[GRAPHIC]
- High U.S. Internet usage expected to drive mobile data demand
- VoiceStream is only provider of 2-way SMS in U.S.
- On track for GPRS in Q4/00
- Controls branding and content through MyVoiceStream.com
Page 15
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Experienced and committed management
- Senior executive team averages over ten years in the industry
- Executive team is committed to the transaction
- Management incentivized like shareholders
Page 16
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Overview of T-Mobile International
Page 17
<PAGE> 33
Partner of choice
[GRAPH]
<TABLE>
<S> <C>
POPs in the U.S. ................ 220 million
POPs in Germany, UK, Austria
and Hungary ................... 155 million
</TABLE>
- Enhances attraction of T-Mobile as consolidation partner in Europe and rest
of world
- No other operator competing for pan-European consolidation can offer
membership of a global GSM footprint
Note: Chart refers to controlled, proportionate POPs in the U.S. and in Germany,
UK, Austria and Hungary
Page 18
<PAGE> 34
Key competitive strengths
- Scale and Reach
- Growth
- Innovation
- Efficiencies
- Deutsche Telekom relationship
Page 19
<PAGE> 35
Innovation
Combining technology and market innovation
Investing today in tomorrow's platforms
[GRAPHIC]
Page 20
<PAGE> 36
Efficiencies
Long-term synergies
- Revenues
- Operating expenses
- Interest expenses
- Capex
Organizational efficiency gains
- "Best practice" across all mobile activities
- Task forces for key projects
- Pooling of mobile data interests in T-Motion
- Size and reach of business provides ability to realize organizational and
financial efficiencies
Page 21
<PAGE> 37
Deutsche Telekom relationship
Competitive advantages from scope and scale of T-family
- Access to financing
- Financial muscle in the consolidation process
- UMTS licence acquisition
- Broader choice of acquisition targets
- Significant know-how transfer
- Strong basis for successful operation of T-Motion through T-Online
relationship
- Cost savings
- Brand synergies expected for mobile data operations
Page 22
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Financial analysis
Page 23
<PAGE> 39
Fair valuation vs. precedents
Favorable per POP valuation relative to U.S. + European benchmarks
Enterprise value per POP ($)
Vodafone/ Mannesmann $ 934
FT/Orange $ 675
Vodafone/ AirTouch $ 339(2)
Vodafone/ AirTouch $ 275
Deutsche Telekom/ VoiceStream $ 265(1)
(1) Based on closing price July 21, 2000 Calculation incl. shares issuable upon
Cook Inlet buy-out
(2) Adjusted to reflect PCS business only
- U.S. PCS companies valued on a per POP basis
- Coverage still in build stage
- Rapidly growing subscriber base
- Too early for subscriber-based multiples
- VoiceStream enterprise valuation of $265 per licensed POP compares
favorably with precedent company transforming transactions
Page 24
<PAGE> 40
Overview of transaction terms
Price
- Fixed exchange ratio of 3.2 Deutsche Telekom shares for each VoiceStream
share plus $30 cash (incl. separate cash and stock election schemes)
- Deutsche Telekom will issue approximately 829 million shares to
VoiceStream's shareholders
- Pro-forma for transaction, German Government/KfW ownership reduced to 46%
Investment
- Deutsche Telekom to invest $5.0 billion in VoiceStream in form of
convertible preferred stock prior to closing
- To be used to fund license auctions and build-out
Transaction value
- Based on VoiceStream's 259 million fully diluted shares this implies an
equity value of (euro)54.1 billion and an enterprise value of (euro)59.4
billion
Lock-up for majority of core shareholders
Page 25
<PAGE> 41
<TABLE>
<CAPTION>
Lock-up agreement with majority of core shareholders
Percentage of
holdings
Time Period available for sale
<S> <C>
- Signing until the latter of the shareholder vote
and January 1, 2001 0%
- The latter of shareholder vote and January 1, 2001
until closing up to 17.5%
- Closing - 3 months post-closing 0%
- 3 months - 6 months post-closing up to 40%
- After 6 months post-closing Remainder
</TABLE>
Page 26
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Timeline of key events
Key events Date
- File preliminary merger proxy End August
- Distribute merger proxy to shareholders Q3/Q4 2000
- VoiceStream shareholder vote Q4 2000 - Q1 2001
- Expected completion of regulatory approval Q1 2001
- Closing Q1 2001 - Q2 2001
- VoiceStream integrated into T-Mobile Post closing
Page 27
<PAGE> 43
Key financials
T-Mobile/VoiceStream
<TABLE>
<CAPTION>
1999 T-Mobile(1) VoiceStream(2)
in million $ (euro) $ (euro)
<S> <C> <C> <C> <C>
Revenue 6,754 6,336 1,047 987
EBITDA 1,806 1,694 -475 -446
Capex 1,383 1,297 664 623
Subscribers 17.5 2.3
</TABLE>
(1) Consolidated figures for 1999, One 2 One only included in Q4
(2) VoiceStream: pro forma for Cook Inlet partnership
Source: Company data (1999), except subscribers (Q1 2000 - after elimination of
160,000 Omnipoint subscribers)
Note: based on 1999 average exchange rate of $ 1.066/(euro) 1.0
Page 28
<PAGE> 44
Impact on Deutsche Telekom
- Goodwill(1)of (euro)44.8 billion ($42 billion)
- Number of Deutsche Telekom shares to be issued: 829 million
- Total number of Deutsche Telekom shares post transaction: 3,858 million
- Impact:
- increase of $5.2 billion in consolidated debt from VoiceStream
- investment of $5.0 billion pre-closing
- $7.8 billion cash portion of consideration
(1) Defined as excess purchase price over book value of assets acquired,
estimated for year end 2000
Page 29
