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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.
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Deutsche Telekom
Dr. Ron Sommer
January 2001
Deutsche
Telekom
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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 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
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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 January 2001
Telekom Page 3
<PAGE> 5
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 E94 billion
- Improving operational performance
- Building the business of tomorrow based on UMTS, system solutions and
broadband Internet
Deutsche January 2001
Telekom Page 4
<PAGE> 6
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 January 2001
Telekom Page 5
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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
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Financial highlights
Q1-Q3/2000 compared to 1999
<TABLE>
<CAPTION>
E billions Q1-Q3/00 Q1-Q3/99 (delta)% 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 (delta)%
---------- -------- -------- --------
<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 January 2001
Telekom Page 7
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Growth drivers
Strong operational performance
<TABLE>
<CAPTION>
1999- Q3/99-
Million Q3/00 1999 Q3/99 Q3/00 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%
- 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%
</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 January 2001
Telekom Page 8
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Mobile communications
EBITDA improvement in Q3/2000
[BAR CHART]
<TABLE>
<CAPTION>
EBITDA* per quarter Margins
(E million)
<S> <C> <C>
Q1/00 412 22%
Q2/00 168 8%
Q3/00 546 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 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
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T-Mobil (Germany)
Strong growth and stable market shares
[PIE CHART]
<TABLE>
<CAPTION>
1999
----
<S> <C>
T-D1 39%
D2 41%
e-plus 16%
E2 4%
</TABLE>
23.2 million customers
[PIE CHART]
<TABLE>
<CAPTION>
H1 2000
-------
<S> <C>
T-D1 39%
D2 41%
e-plus 15%
E2 5%
</TABLE>
34.0 million customers
[PIE CHART]
<TABLE>
<CAPTION>
Q3 2000
-------
<S> <C>
T-D1 40%
D2 41%
e-plus 14%
E2 6%
</TABLE>
40.7 million customers
Source: Telecom-Handel
Deutsche January 2001
Telekom Page 10
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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
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One2One
Increasing market share
[PIE CHART]
<TABLE>
<CAPTION>
1999
----
<S> <C>
One2One 17%
Orange 21%
Cellnet 29%
Vodafone 33%
</TABLE>
23.9 million customers
[PIE CHART]
<TABLE>
<CAPTION>
H1 2000
-------
<S> <C>
One2One 20%
Orange 23%
Cellnet 26%
Vodafone 31%
</TABLE>
30.7 million customers
[PIE CHART]
<TABLE>
<CAPTION>
Q3 2000
-------
<S> <C>
One2One 21%
Orange 24%
Cellnet 25%
Vodafone 30%
</TABLE>
34.4 million customers
Source: One2One
Deutsche January 2001
Telekom Page 12
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Eastern Europe(1)
Strong positioning in Central and Eastern Europe
<TABLE>
<CAPTION>
max.mobil. RadioMobil* PTC** MTS***
---------- ----------- ----- ------
<S> <C> <C> <C> <C>
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
</TABLE>
* 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
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Eastern Europe(2)
Leading mobile operators in Hungary and Croatia
<TABLE>
<CAPTION>
Westel Croatia Telecom
------ ---------------
<S> <C> <C>
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
</TABLE>
Deutsche January 2001
Telekom Page 14
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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
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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 2/G2.5G subscribers in 1998 to 25 million 3G
subscribers in 2010]
Deutsche January 2001
Telekom Page 16
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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
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T-Online
Strong growth in minutes and e-commerce revenues
Access: minutes/month/subscriber
<TABLE>
<S> <C>
H1/1997 190
H2/1997 205
H1/1998 225
H2/1998 245
H1/1999 300
H2/1999 350
Q1-Q3 2000 501
</TABLE>
e-commerce and advertising revenues
E million
<TABLE>
<S> <C>
Q1/00 15.9
Q2/00 17.4
Q3/00 27.8
</TABLE>
Source: Company data
Deutsche January 2001
Telekom Page 18
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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
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Network communications
EBITDA remains stable
[BAR CHART]
<TABLE>
<CAPTION>
EBITDA* per quarter
E million Margins
------------- -------
<S> <C> <C>
Q1/00 1,535 38.6%
Q2/00 1,560 43.0%
Q3/00 1,576 44.1%
</TABLE>
* 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
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Network communications
Diminishing dependence on long-distance revenues
Revenues
E billion
[BAR CHART]
<TABLE>
<CAPTION>
Long-distance revenues Total revenues % of Total revenues
---------------------- -------------- -------------------
<S> <C> <C> <C>
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%
</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 among the most competitive long-distance call rates in the world
Deutsche January 2001
Telekom Page 21
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T-Com
T-DSL tariff initiatives and calling plans boost access growth
T-DSL
Contracts (thousands)
[BAR CHART]
<TABLE>
<S> <C>
Jan 5
Feb 7
Mar 10
Apr 16
May 44
Jun 57
Jul 75
Aug 122
Sep 223
Oct 322
Nov 450
Dec* 540
</TABLE>
* 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
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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
