CORPORATE RESPONSIBILITY REPORT 2018

3 SOCIETY A RELIABLE PARTNER IN THE DIGITAL WORLD ENGAGEMENT@TELEKOM CULTURAL AND SPORTS SPONSORSHIP Creating awareness Honing skills Supporting implementation EMPLOYEES CORPORATE CULTURE AS A SUCCESS FACTOR DIGITALIZATION AND THE WORLD OF WORK DIALOG AND COLLABORATION OCCUPATIONAL HEALTH AND SAFETY TRAINING AND DEVELOPMENT DIVERSITY AND EQUAL OPPORTUNITY SUPPLIERS SUSTAINABLE PROCUREMENT STRATEGY SUPPLIER MANAGEMENT RESOURCE SCARCITY AND RAW MATERIALS SOURCING 2018 audit results CLIMATE & ENVIRONMENT CLIMATE STRATEGY CO2 emissions Renewable energy Energy efficiency Sustainable products CIRCULAR ECONOMY AND RESOURCE EFFICIENCY OTHER ENVIRONMENTAL TOPICS 91 92 94 96 103 105 109 112 113 115 118 123 125 131 134 135 137 141 145 146 147 150 156 158 163 164 168

ABOUT THIS REPORT 5 ABOUT THIS REPORT "Act responsibly. Enable sustainability." is the title of our 2018 CR Report. We chose this title to emphasize our commitment to sustainable activity along the entire value chain and to highlight the potential that our products and services hold when it comes to addressing environ- mental, economic and social challenges. Deutsche Telekom has been involved in CR reporting for more than 20 years. The CR Report – in addition to the non-financial statement we published in the 2018 Annual Report – is our primary medium for informing our internal and external stakeholders about our challenges and progress as a responsible, sustainable company. REPORTING PERIOD, SCOPE OF APPLICATION AND TARGET GROUPS All quantitative information, indicators, and descriptions of key events and activities refer to the year 2018. Any deviations are marked accord- ingly. The 2018 CR Report is a Group report that includes many national companies in which Deutsche Telekom holds a majority stake. It also follows up on the 2017 CR Report. This report is specifically addressed to Deutsche Telekom stakeholders. These include analysts and investors, CR ranking and rating agencies, non-governmental organizations, customers, employees, business part- ners and representatives from the fields of business, science, research, education and politics. LOOKING BACK ON DEUTSCHE TELEKOM’S CR REPORTING Deutsche Telekom has been reporting on its sustainability activities in various publications since 1996. From 2003 through 2006 we pub- lished a combined annual HR and Sustainability Report. An interim report issued in 2007 formed the transition to our current CR reporting. Since 2008 the Telekom Group has been publishing a comprehensive CR Report each year. OUR ONLINE REPORT: FOCAL POINTS AND CONTEXT We have been publishing our CR Report exclusively online since the 2010/2011 reporting year to meet the requirements and user prefer- ences of our stakeholders. ƒ Sustainability relevance: explains what makes the topic significant to sustainable development and to Deutsche Telekom’s long-term business success. ƒ Management approach: how Deutsche Telekom approaches key sustainability topics, what its goals are and how it intends to achieve them. ƒ Progress during the reporting period. The report also includes information on “CR facts”and specific informa- tion for investors and rating agencies. This is background information on a variety of topics that can be accessed directly from the text via links. Readers can also access the "CR facts" section at any time by clicking on the footer. A download area, search and dialog functions and an interactive benchmarking tool make it even easier to navigate the report. What’s more, the info cart lets readers select different con- tent and create a customized PDF file. SELECTION OF KEY TOPICS FOR THE 2018 CR REPORT To identify the key topics for the report, we conducted a comprehensive materiality process. The process is a regular component of our annual CR reporting activities that helps us identify the topics with maximum relevance for us and our stakeholders. STRUCTURE OF THE CURRENT ONLINE REPORT The online 2018 CR Report has been structured as a progress report. It focuses on key developments during the reporting period, which are discussed in five central reporting sections: ƒ Customers and products ƒ Society ƒ Employees ƒ Suppliers ƒ Climate and environment These are complemented by three additional sections: The online 2018 CR Report has been available since March27, 2019 in German and English. On the homepage we highlight current sustaina- bility topics from different perspectives. The series starts with the topic of resource conservation. Further topics will be added during the course of the year. In addition, we keep you updated on important events and activities in short articles. We are also offering the homepage for the first time in simple language. ƒ The Strategy and management section describes the management of CR processes and the Group-wide integration of Deutsche Telekom’s CR strategy. ƒ The majority of our national companies whose CR activities are described in this report have their own profile page. The profile pages can be found under the "National companies" menu option. Each of the five main sections begins with an introduction and an over- view of relevant events and developments on that topic. The subsequent pages are structured as follows: ƒ In the Indicators section, consolidated and commented indicators provide information about our progress in the past few years.

ABOUT THIS REPORT AWARDS AWARDS 7 ƒ Buy side for all industries: #2 Overall, #1 Professional #2 CEO, #1 CFO, ƒ Sell side for all industries: #1 Overall, #1 Professional #1 CEO, #2 CFO, We are very pleased about being listed in renowned sustainability rank- ings and ratings and about the numerous awards and certifications we have received during the reporting period. Our national companies were also recognized for their CR commitment. You can find an over- view of this on the profile pages of the national companies. We discuss our current position in ratings and rankings in the "Strategy and man- agement" section. AWARDS AND CERTIFICATES Strategy & management Deutsche Telekom AG “German Sustainability Award” in the category “Holistic sustainability management at a large company” Deutsche Telekom AG Presented with the “German Investor Relations Award” 2018 by Extel WeConvene, WirtschaftsWoche and German investor relations associa- tion DIRK for firstplace in “IR Performance” (DAX30) and firstplace in “IR Manager” (DAX30) Deutsche Telekom AG Named one of 2019 World’s Most Ethical Companies by the Ethisphere Institute Deutsche Telekom AG IR-Magazine: Presented with the “IR Magazine Award” for winning first- place in the telecommunications industry Magyar Telekom and Deutsche Telekom AGFirst and second place in the “oekom Corporate Responsibility Review 2018” in the telecommuni- cations industry Included in the Bloomberg Gender-Equality Index (GEI) 2019, which measures gender equality in internal company statistics, staff policies, external support and investment in the community and gender- conscious product offerings. Deutsche Telekom AG Extel Award as the “Leading Investor Relations Team in Europe” for the fifth time in a row. Other Extel awards in 2018: ƒ European ranking for all industries: #1 Overall, #1 Professional, #2 CEO, #1 CFO ƒ German ranking for all industries: #1 Overall, #1 Professional #1 CEO, #1 CFO, ƒ Ranking for the telecom industry: #1 Overall, #1 Professional #1 CEO, #1 CFO Deutsche Telekom AG Named a winner in numerous areas by the Institutional Investor trade journal in 2018: ƒ European ranking for all industries: #2 Overall, #1 Professional, #2 CEO, #1 CFO Deutsche Telekom AG Voted test winner for strong “Sustainable Commitment” from the consumer viewpoint by FOCUS Magazin (issue 12/19). Deutsche Telekom AG 3rd place in the large companies‘ category for the Sustainability Report 2017 in the Ranking der Nachhaltigkeitsberichte 2018 by the Institute for Ecological Economy Research (IÖW) and future e.V.

ABOUT THIS REPORT AWARDS 9 Society Employees Teachtoday Two “Comenius EduMedia” Awards from the Gesellschaft für Pädagogik und Information (Association for Teaching and Information). The first, in the “IT, communication and media education” category, recognized the initiative as a whole and the second, in the “General multimedia products” category, recognized the Scroller media magazine. Deutsche Telekom Services GmbH “Gold” award by the “Pillar World Awards“ 2018 for the future part-time model “Additional Days off“ and a new time recording app. Scroller media magazine Recommendation by Stiftung Lesen (German Reading Foundation) for promoting safe and competent media use; animated series “Schon gewusst?“ (Did you know?) distinguished with the “German Design Award 2019“ in the category “Audiovisual” Multiple awards from the German Stevie Awards 2018: Gold for Telekom Deutschland GmbH for “Digitalization. Simply. Make it happen - The digitalization podcast“, Gold for Deutsche Telekom Services Europe GmbH for the “Lead to Win Award“ and the “Incapacity to work certificate app“ Deutsche Telekom AG Recognized by Zentrum Ideenmanagement with an award for second place in the “Administration” category for an employee idea Deutsche Telekom AG “Internship PLUS direct entry“ program honored with the “HR Excel- lence Award 2018“ for innovative lighthouse projects in HR manage- ment Deutsche Telekom AG Firstplace for the “Female Recruiting Award 2018” Handbook Germany: Distinguished with the bronze “German Digital Award 2018” in the category of Branded Content – Content Platforms / Digital Magazines” and the “German Award for Online Communication” in the Corporate Responsibility category. Deutsche Telekom AG Second place in the overall ranking of the market research institute Potentialpark, first place in the individual categories “Career website” and “Social media” Deutsche Telekom AG Winner of the “trendence Employer Branding Award 2018” in the category “Best Employer Branding for Students”

ABOUT THIS REPORT THE GERMAN SUSTAINABILITY CODE 11 THE GERMAN SUSTAINABILITY CODE Each year, as part of its Corporate Responsibility report, Deutsche Telekom publishes a comprehensive declaration of conformity with the German Sustainability Code. The German Sustainability Code aims to make companies’ sustainability performance transparent and compara- ble under a binding framework.Deutsche Telekom’s declarations of conformity for 2018 will follow.The German Sustainability Code was approved by the federal government’s Council for Sustainable Develop- ment. Deutsche Telekom was one of the first companies to accede to the Sustainability Code.

ABOUT THIS REPORT INDEPENDENT ASSURANCE REPORT 13 Assurance Conclusion Based on the assurance procedures performed and assurance evi- dence obtained, nothing has come to our attention that causes us to believe that the disclosures denoted with in the Company’s Report for the period from 1 January to 31 December 2018 have not been pre- pared, in all material aspects, in accordance with the relevant GRI- Criteria. Intended Use of the Assurance Report We issue this report on the basis of the engagement agreed with the Company. The assurance engagement has been performed for pur- poses of the Company and the report is solely intended to inform the Company as to the results of the assurance engagement. The report is not intended to provide third parties with support in making (financial) decisions. Our responsibility lies solely toward the Company. We do not assume any responsibility towards third parties. Düsseldorf, 27 March 2019 PricewaterhouseCoopers GmbHWirtschaftsprüfungsgesellschaft Hendrik Fink ppa. Wirtschaftsprüfer (German Public Auditor) Pia Schnück *PricewaterhouseCoopers GmbH has performed a limited assur- ance engagement on the German version of the Corporate Responsi- bility Report and issued an independent assurance report in German language, which is authoritative. The following text is a translation of the independent assurance report.

STRATEGY & MANAGEMENT FOREWORD TO THE 2018 CR REPORT 15 FOREWORD TO THE 2018 CR REPORT Dear Readers, One event made an especially strong impression on me in 2018: When the German astronaut Alexander Gerst sent a video message to his future grandchildren from the International Space Station (ISS). He apologized that his generation would not leave them a world in the best of states – and also promised to do all he could “to enable the best future I can imagine.” What impressed me was his clear stance – and his belief that change for the better is possible. Because what happens when this optimism in the future is lost was like- wise demonstrated in 2018: In a world marked by a lot of upheaval, it is those who stoke fears about the future and lure people with seemingly simple truths who are gaining traction. After all, many are afraid of a loss of social status. The great pace of digital transformation is also partly to blame for that: People are worried that machines and artificial intelli- gence might do away with their job in the future. A sort of “aggressive nostalgia” is spreading in Europe at the moment: Vague fears about the future are vented as anger about the present. We are actively tackling that by enabling people to participate in society. All people, in urban centers as well as in rural areas. At all times. Our task, our purpose, is to connect people. Our networks are the basis for that. Deutsche Telekom therefore believes it has the responsibility to encourage a society in which no one is left out, but everyone is included. We are aware that the success of the digital transformation in Europe – and hence prosperity and the quality of life of future genera- tions – depends on our networks. That is why we build our networks for as many as possible and never for just a handful of privileged persons. However, "what" we do is not only important – “how” we do it also counts. It is important for us to stand by our convictions. One example: If artificial intelligence evokes fears, we need to discuss what an ethical framework for its use might look like. That is why we drew up guidelines on the use of AI in 2018 and intend to develop them further in dialog with others. Because our company’s slogan is “Life is for sharing.” And we want to make that possible, because we believe that sharing brings people together. And that people can achieve more together than they could ever do on their own. Our employees prove that day in, day out – not just in our core business, but also above and beyond. For instance, many of them have long been committed to preventing the waste of resources in their sphere of responsibility. For example, one team is targeting customers who are still receiving paper invoices by mail in order to convince them to switch to paperless online bills. In 2018 I launched the “Stop Wasting – Start Caring” initiative so that good ideas like that could be spread more strongly throughout the company. All employees can present their sug- gestions on how to save resources to our social network. In that way we can learn from each other and be inspired to follow suit. Timotheus Höttges, Chairman of the Board of Management, Bonn, Deutschland We at Deutsche Telekom have given a lot of thought to curbing climate change: In our climate strategy to date, we have defined ambitious tar- gets for significantly reducing CO2 by the year 2020. In 2018 we devel- oped our climate strategy further and worked on new, science-based targets for the period after 2020. One focal aspect of our strategy will be to improve the potential of our products and solutions to protect the climate even further so as to help our customers save resources and cut CO2 emissions. Other colleagues devote their energies day after day to making it easier for the more than 400 refugees who started at Deutsche Telekom as interns, apprentices or employees in 2018 to settle in and learn the ropes. And others are committed to strengthening media literacy skills in society, thus counteracting the growing spread of half-truths, alterna- tive facts and fake news on the internet: As part of the “1001 truths” initiative, they are creating exciting interactive workshops on highly topical issues such as online opinion-making.

STRATEGY & MANAGEMENT CR STRATEGY 17 CR STRATEGY Deutsche Telekom aims to be the leading European telecommunica- tions provider. This corporate vision is the basis for our approach as a responsible company CR approach) and our CR mission. CURRENT ORGANIZATIONAL STRUCTURE Our Group CR strategy also provides our national companies with a framework for their sustainability measures. The central components are our three CR action areas. They provide a framework for the focal topics of our sustainability management activities. Our CR program states which specific goals we wish to achieve with which measures. We monitor our progress using key performance indi- cators (KPIs). An integrated governance structure helps us to closely interlink strate- gic management and operational implementation of our CR strategy throughout the Group. Overall responsibility for sustainability lies with the Deutsche Telekom Board of Management. Overall responsibility for CR lies with our Board of Management; it dis- cusses and decides on important CR matters. The Chief Human Resources Officer decides which CR matters are to be classed as important and represents them on the Board of Management. The Group Corporate Responsibility (GCR) unit reports to the Human Resources (HR) Board department. It develops Group-wide policies and guidelines with the goal of advancing the corporate culture with a focus on sustainable innovation and social responsibility. GCR specifies a strategic framework for the activities of our international network of CR managers through our CR Policy. GCR is advised by the CR Board, composed of the heads of key Group areas, in order to ensure direct feedback is always shared between CR and our core business. Another pillar of our CR governance structure is the HR Leadership Team (HRLT), an advisory and decision-making body for the Human Resources (HR) Board department. Among other things, it provides sup- port on decisions regarding positioning of CR issues and the strategic alignment of the CR department. The CR managers from the different business units and national compa- nies are responsible for implementing our CR strategy. They collaborate within the international CR Manager Network, where they coordinate their activities and share best practices.

STRATEGY & MANAGEMENT CR STRATEGY 19 2018 CR PROGRAM As part of its CR program, Deutsche Telekom specifies targets to be implemented throughout the Group in the relevant processes of its core business. The CR program defines specific measures and a timeline for imple- mentation. We also provide information on the implementation status in the CR program. Detailed information on the ESG KPIs, which we use to quantify our performance in each area, is provided in the CR Report.

STRATEGY & MANAGEMENT CR STRATEGY 21 CR PROGRAM 2018 STAKEHOLDER INVOLVEMENT Objectives Scheduled completion date Measures Status the principles of the Global Reporting Initiative (GRI G4). Ensure systematic stakeholder engagement Ongoing ƒ Continue stakeholder engagement strategy based on ƒ Stakeholders included in various ways, inclu- ding. ƒ Dialogue with experts from the fields of busi- ness, science, politics and society regarding digital responsibility via Deutsche Telekom’s own YAM platform ƒ International sustainability dialogue of the Joint Audit Cooperation (JAC) ƒ Supplier Development Program ƒ We Care magazine ƒ Magenta Security Congress ƒ Cyber Security Summit ƒ New 1001 Truths initiative on trust and opi- nion forming online ƒ Revision of „Fakten zu Mobilfunk und Gesundheit” (“Facts about mobile communi- cations and health”) brochure ƒ SRI roadshows ƒ Materiality analysis conducted for 2018. ƒ Materiality process was expanded to include systematic document analysis. Establish a materiality process Ongoing ƒ Conduct annual materiality analysis (materiality pro- cesses)

STRATEGY & MANAGEMENT CR STRATEGY CR PROGRAM 2018 MANAGEMENT SYSTEMS 23 Objectives Scheduled completion date Measures Status Implement an occupational health, safety and environmen- tal management system in compliance with ISO 14001 and OHSAS 18001at all national companies with more than 50 employees. Ongoing ƒ Implement an integrated management system based ƒ 100 percent of employees in Germany and 98 on both standards and harmonize the different management process levels at the national companies percent of employees outside Germany work in a workplace that is ISO 45001 certified. Some 100 percent of employees in Germany are employed at an ISO 14001-certified workplace. Internatio- nally, we are at 98 percent coverage. SUSTAINABLE CONSUMPTION AND LIFESTYLE Objectives Scheduled completion date Measures Status Evaluate products and solutions regarding their contribution to sustainability Ongoing ƒ Implement the criteria and indicators developed in col- ƒ Overall, we have carried out in-depth analyses for laboration with external and internal stakeholders in company processes ƒ Integrate product-based sustainability controlling in business processes and ensure Group-wide harmoni- zation ƒ Embed the topic of sustainable products in company processes and develop an overarching strategy ƒ Analyze products in terms of how they contribute to sustainability and what this can do for our business; include results in customer communication ƒ Participate in industry-wide solutions to evaluate pro- ducts and solutions in terms of sustainability ƒ Conduct regular stakeholder dialog on specific topics ƒ Develop sustainability-related customer orientation policies ƒ Drive international standardization, e.g., via seals of quality or certification in the ICT sector ƒ Get more products certified with the Blue Angel and TÜV Green Certified Product environmental labels 29 product groups with regard to their sustaina- bility benefits and the corresponding business potential (as at end of 2018). ƒ According to an analysis conducted in 2018, we generated 42 percent of our total revenue in 2017 with sustainable products (40 percent in 2016). ƒ Regular stakeholder dialogue on specific topics conducted. ƒ All DECT phones from our Sinus series as well as all phones from the Speedphone series bear the Blue Angel environmental label. ƒ The Media Receiver 401 and Media Receiver 601 received the Blue Angel. The entire Media Receiver family now carries the Blue Angel label ƒ Sustainability awards for our commitment and role as pioneer and multiplier for climate protec- tion ƒ Successful growth of leasing model usage for devices (e.g. Media Receiver) for the benefit of the recycling rate (e.g. Speedport PRO), duration of use, and more sustainable packaging ƒ Workshops conducted with suppliers on the voluntary blacklist, which was developed in cooperation with the Fraunhofer Institute for Reli- ability and Microintegration (Fraunhofer IZM). Ensure stakeholder engagement and customer information 2020 Integrate life cycle assessment and usage behavior (sustainable consumption) 2020 ƒ Tap efficiency potential in the product life cycle and enhance products and solutions to include sustainabi- lity criteria ƒ Blacklist environmentally harmful materials (not prohi- bited by law) contained in our products

STRATEGY & MANAGEMENT CR STRATEGY 25 CR PROGRAM 2018 SUSTAINABLE SUPPLY CHAIN Objectives Scheduled completion date Measures Status Increasing the share of suppliers audited for sustainability Ongoing ƒ Weight sustainability aspects at 10 percent for bids ƒ Supplier Code of Conduct (SCoC) ƒ Perform supplier risk analysis ƒ Conduct mobile surveys with suppliers ƒ Conduct supplier surveys and self-assessments ƒ Implement supplier evaluation and development ƒ Enforce escalation process for violations ƒ Share of suppliers audited for sustainability in 2018: 80 percent ƒ 157 suppliers participated in the CDP Supply Chain program (this covers 71 percent of our procurement volume; target value for 2020 is 70% coverage) ƒ Monitoring of sustainability risks from all sup- pliers by two external audit firms (RepRisk & BvD) ƒ Inclusion of the supplier development program under the umbrella of the Global e-Sustainability Initiative (GeSI) ICT industry association and expansion as the industry-wide Sustainable Development Program (SDP) ƒ The share of CR-classified suppliers among our TOP 200 suppliers was 86 percent in 2018 (tar- get for 2020 is coverage of 75 percent). ƒ E-learning tool „Sustainability in procurement“ adapted and updated; used in the procurement joint venture “BuyIn” ƒ Participation in a dialogue event on sustainability in supply chains held by the Joint Audit Coopera- tion ƒ Sustainable Procurement ESG KPI is 81% for 2018 (target value for 2020 = 80%). ƒ TOP 200 CR-qualified Suppliers ESG KPI is 86% for 2018 (target value for 2020 = 75%). ƒ CDP Supply Chain ESG KPI is 71% for 2018 (tar- get value for 2020 = 70%). ƒ Inclusion of the supplier development program under the umbrella of the Global e-Sustainability Initiative (GeSI) ICT industry association and expansion as the industry-wide Sustainable Development Program (SDP). Program opened up for other ICT companies. Started as a pilot project with four suppliers in 2018. ƒ Three workshops conducted on sustainability topics with relevant smartphone manufacturers ƒ 117 social audits performed. ƒ 18 mobile surveys performed at suppliers. Increase the share of CR- classified suppliers among our TOP 200 suppliers Implement a sustainable procu- rement strategy Ongoing Improve sustainability in our supply chain Ongoing Ongoing ƒ Carry out self-assessments, audits, sustainability work- shops for suppliers, and supplier development pro- grams ƒ Include commitment to protecting human rights and to the goals of the German National Action Plan on Busi- ness and Human Rights in the Code of Human Rights & Social Principles ƒ Incorporate sustainability principles into the Group’s Global Procurement Policy ƒ Stakeholder engagement ƒ Established escalation procedure for serious cases ƒ Group-wide implementation by the Sustainable Procu- rement Working Group (SPWG) ƒ Employee training courses ƒ Set high ethical, social, ecological and human rights standards for suppliers through the Supplier Code of Conduct (also applicable for the BuyIn joint venture) ƒ Expand the supplier development program throughout the industry ƒ Carry out compliance training for suppliers

STRATEGY & MANAGEMENT CR STRATEGY CR PROGRAM 2018 NETWORKS Objectives Provide broadband to around 80 percent of the German population. Provide LTE coverage to 95 percent of the population in Germany By the end of 2019 switch to IP in Germany for consumer, by the end of 2020 switch to IP in Germany for business completed 27 Scheduled completion date 2018/19 (target adjusted) 2018 Measures Status ƒ Expand fiber optics infrastructure and equip/upgrade street cabinets with vectoring technology ƒ Expansion of vectoring structure continued ƒ The online ticker provides information on the number of connected households. ƒ Set up additional base stations ƒ Continue LTE 1800 and LTE 800 network build-out ƒ Around 97 percent LTE coverage already achie- ved in Germany and Europe (end of 2018) 2019 for consumer, 2020 for business ƒ VDSL vectoring build-out ƒ Migration to IP technology ƒ Around 400,000 lines monthly migrated to IP. ƒ By late 2018, more than 86 percent of existing customer lines had been implemented based on IP technology (i.e., around 95 percent of consu- mer broadband lines). ƒ 4.7 million lines switched to IP in 2018.

STRATEGY & MANAGEMENT CR CONTROLLING AND IMPACT MEASUREMENT 29 CR CONTROLLING AND IMPACT MEASUREMENT Deutsche Telekom’s CR Controlling department plays a key role in con- trolling our CR activities. Controlling has been supported by an IT-based data collection system for the past nine years. The system makes sure that “environmental, social and governance (ESG)” data and KPIs are promptly and transparently recorded and reported. It supports stand- ardized, mandatory processes at the Group and national level and ena- bles Group-wide benchmarks. This IT support lets us focus on content analysis of ESG data and helps us measure early on in the process to what extent we have reached our CR targets and if we need to make changes. All of Deutsche Telekom’s national companies that participate in the CR data collection process are obligated to record our Group-wide ESG KPIs. These national companies represent 99 percent of the Group’s net revenue. ESG KPIs cover types of capital For the purpose of integrated financial and sustainability reporting, the KPIs map the six types of capital addressed in these reports and there- fore also reflect the essential aspects of the sustainable value of our company (see diagram). We especially use ESG data to calculate relevant indicators and our ESGKPIs, with which we measure and control our CR performance throughout the Group. This information is published in our section on KPIs and in the interactive benchmarking tool of the CR report. We are continuously improving our system for performance indicators on the basis of internal and external requirements. In this connection, in 2018 we once again expanded our reporting on Smart Innovation. Since 2015 we have also analyzed the social impact of our corporate activity. In the following, we describe our general approach and the results of our impact measurement for selected topics. ESG KEY PERFORMANCE INDICATORS ESG KPIs (key performance indicators) are used as management tools for our CR involvement. They enable us to improve our performance on an ongoing basis. As they are relevant to our supply chain, we also address them in our annual report in the “Non-financial statement”. We use 13 KPIs that are valid Group-wide to manage our CR perfor- mance: ƒ Socially Responsible Investment (SRI) ESG KPI ƒ Sustainable Procurement ESG KPI ƒ Sustainable Revenue Share ESG KPI ƒ Energy Intensity ESG KPI ƒ Carbon Intensity ESG KPI ƒ Renewable Energy ESG KPI ƒ Power Usage Efficiency ESG KPI ƒ Enablement Factor ESG KPI ƒ Take Back Mobile DevicesESG KPI ƒ Community Investment ESG KPI ƒ Beneficiaries ESG KPI ƒ Media Literacy ESG KPI ƒ Employee Identification with CR Commitment ESG KPI ESG KPI REPORTING IN THE ANNUAL REPORT We have included selected ESG KPIs in our Annual Report since 2011. We published the following KPIs in 2018 within the framework of our combined non-financial statement. A detailed description of each KPI can be found in the Indicators section, which can be accessed with the following link.

STRATEGY & MANAGEMENT CR CONTROLLING AND IMPACT MEASUREMENT 31 MEDIA LITERACY We analyzed our “Teachtoday” initiative in the topic area of media liter- acy. This initiative contains an online platform as well as annual compe- titions and conferences on media use by children and teenagers. The learning methods employed with Teachtoday appeal to multiple senses. According to our results, which we obtained together with the auditors from PwC, such methods are more than twice as effective as learning methods that only appeal to one sense. This means that society benefits twice from our expenditures on specific media literacy measures (SDG4). IMPACT MEASUREMENT: ECO-CONSCIOUS PACKAGING Resource efficiency has long been a core topic of ecological sustaina- bility. The topic of plastic and packaging in particular is of great interest to society. Within the company, our “Stop Wasting – Start Caring!” initia- tive has also made this clear. With help from our new impact measurement approach, we analyzed the effects of packaging optimization planned for 2019 with one of our core products (use of less material and switch to alternative packaging materials). Overall, the switch will have a positive impact on nine of the 17 SDGs. The effect on specific subtargets of SDGs 6, 12, 13, 14 becomes clear -through decreased water pollution and CO2 emissions as well as reduced plastic consumption. IMPACT MEASUREMENT: OUR CONTRIBUTION TO RESPECT FOR HUMAN RIGHTS Observing human rights is a key topic for us, our customers, investors and society. As part of our impact measurement, we look at the topic both within our Group and in our supply chain. The following diagram illustrates the positive impact that can be achieved in both our value chain and society through our commitment to human rights. Reduced working hours in Brazil A Human Rights Impact Assessment was carried out at our business unit in Brazil in 2018. It identified working hours as a relevant topic. As a result of the review, we have agreed upon improvement measures. Our impact assessment looked at the correlations between working hours and mental and physical stress as well as accident rate, produc- tivity and work-life balance. It shows chances that the through the Human Rights Assessments identifiedmeasures can have a positive impact on the local community beyond the workforce. In particular, we were able to discern a positive impact on SDGs 3 and 8 and on the rec- ommendations of the United Nations Office of the High Commissioner for Human Rights.

STRATEGY & MANAGEMENT VALUES AND GUIDING PRINCIPLES 33 As a responsible employer, we show our employees the opportunities offered by the digital workplace. We create an environment in which we embrace change and offer our employees new work models, open work environments, social networks to enable flexible, interdisciplinary work- ing, and innovative forms of learning. In 2018 more than 41 percent of all learning modules at our company were completed in digital form. Our social commitment, however, is not just to our customers, partners and employees. We feel it is our responsibility to support the develop- ment of media literacy in our community. Our efforts in this area include the Teachtoday initiative under the “Media sure! But secure” umbrella which promotes safe and competent media use. For example, more than 140children discussed the topic of data privacy at our 2018 “Summit for Kids”. In 2018 we also integrated the 1001 truths initiative with modules for adults in German, English and simple German. For our holistic CR activities, we received the German Sustainability Award in 2017 as the most sustainable large company of 2018.

STRATEGY & MANAGEMENT SUSTAINABLE FINANCE 35 SUSTAINABLE INVESTMENT AT DEUTSCHE TELEKOM We are fully committed to sustainable finance. Correspondingly, we also apply our sustainability principles to the assets of the Telekom Pension Fund. We have pursued a sustainable investment strategy for the selec- tion of these capital assets since 2013. In addition to financial aspects, we also take into account ecological and social principles as well as guidelines for good corporate governance. We have pursued an optimized investment strategy since 2017. We have specified the list of negative criteria we employ and added to it best-in-class strategies and approaches to commitment. Accordingly, excluded from investment are companies that manufacture or do busi- ness with so-called controversial weapons (for example, anti-personnel mines, cluster ammunition, nuclear weapons, biological or chemical weapons). Also prohibited are investments in companies that have repeatedly violated the principles of the UN Global Compact. We have also defined a best-in-class approach. Our investment manag- ers select companies that boast the best sustainability performance in their respective sectors in which to invest. A decision was also made to effectively support the Sustainable Development Goals (SDGs) as shareholders with voting rights (shareholder engagement). The investment managers will be selected based on their expertise in ESG issues. With this approach we aim to align attractive expected returns and sustainable value orientation with each other. By investing in stable values, we want to fulfill our fiduciary responsibility to our employees regarding capital investment. Our goal is also to avoid repu- tation risks and larger risks of loss. ƒ Our Gold status was confirmed at EcoVadis in 2018. ƒ In addition, we were rated number one in 2018 in the Good Com- pany Ranking that assesses the sustainability performance of all DAX 30 companies on the basis of tested publications. ƒ Furthermore, at the beginning of 2019 we were once again named one of the most ethical companies worldwide by Ethisphere, an institute that promotes ethical business methods. We are the only German company among the 128 commended companies. COMBINED NON-FINANCIAL STATEMENT IN THE ANNUAL REPORT In 2014 the European Parliament and the EU member states adopted a directive that expands the reporting obligations of large, capital-market- oriented companies. The CSR Directive obligates such companies to report on important non-financial aspects, such as environmental, social and employee concerns as well as protection of human rights and combating corruption and bribery. Germany enacted this directive as national law in 2017 under the CSR Directive Implementation Act. Deutsche Telekom’s combined non-financial statement is contained in the management report of the 2018 Annual Report. TAX POLICY GUIDELINES The Group Tax department is responsible for ensuring that the Deutsche Telekom Group pays taxes and duties at the national and international level in accordance with the applicable laws. Group Tax makes sure that the Deutsche Telekom Group complies with all its tax obligations in Germany and abroad, in particular that it pays taxes in accordance with the local laws and regulations applicable to the individual Group entities. This includes the Group’s income taxes, which must also be regularly reported in our IFRS financial statements, as well as, for example, VAT and wage taxes payable within the context of customer transactions and for Group employees. Group Tax also ensures that the Deutsche Telekom Group has an effi- cient tax structure within the framework of German and foreign tax laws as applicable in each country, i.e., that the Group does not carry any unnecessary tax burden. The goal is to achieve sustainable tax effi- ciency for the Group, which requires a transparent, trust-based coopera- tion with local tax authorities. In addition, Group Tax undertakes to contribute to the greatest extent possible to the success of Deutsche Telekom’s operations, e.g., by pro- viding detailed tax advice regarding new business models or innovative technological developments. In such matters, Group Tax is particularly focused on clarifying upfront any unresolved tax law-related issues as well as providing practical solutions to meeting all applicable tax requirements. The tax strategy – Tax Compliance, Sustainable Tax Efficiency, Tax as Valued Business Partner – was also adopted by the Deutsche Telekom Board of Management. For detailed information on the work of Group Tax, its principles, and its responsible approach to tax, please see the related document.

STRATEGY & MANAGEMENT SUSTAINABLE DEVELOPMENT GOALS (SDGS) 37 SDG Target Our contribution Find out more End poverty in all its forms everywhere By expanding our networks, we create the conditions for economic and social participation, among other things providing access to education - the lack of which is one of the main causes of poverty. We expect our suppliers to pay the minimum wages as set forth in the ILO Convention. We have explicitly formulated this in our Supplier Code of Conduct. ƒ Social commitment ƒ Network expansion ƒ Supplier Code of Conduct End hunger, achieve food secu- rity and improved nutrition and promote sustainable agriculture Our efficient Smart Agriculture ICT solutions allow for higher harvest yields while reducing the use of resources such as seeds, water, fertilizers, and energy. What's more, our narrow-band radio communications also help maintain biodiversity. ƒ Use narrowband technology to combat bee mortality Ensure healthy lives and promote well-being for all at all ages We promote health with our e-health solutions for the improvement of medical care and a number of health measures for our employees. Ensure inclusive and quality education for all and promote lifelong learning We invest heavily in the training and development of our approx. 216,000 employees. In addition, we pro- mote the development of media skills. The Deutsche Telekom Stiftung foundation supports a large number of STEM projects. ƒ Digital healthcare ƒ Sea Hero Quest dementia study ƒ Occupational health and safety ƒ Mobile communications and health (EMF)Netz” and BAGSO ƒ Integrating refugees into the job market ƒ Training and development ƒ E-learning offerings ƒ Teachtoday ƒ STEM promotion ƒ Partner for “Deutschland sicher im Netz” and BAGSO ƒ Integrating refugees into the job market Achieve gender equality and empower all women and girls We are committed to the systematic promotion of women in management, supervisory boards and STEM professions. Our employees benefit from a number of different offers we provide to improve their work-life balance. We expressly expect our suppliers to ban gender discrimination. ƒ Diversity and equal opportunities ƒ Women’s STEM Award ƒ Promoting the diversity of our young talent ƒ Flexible working hours models expanded further ƒ Supplier Code of Conduct Ensure availability and sustain- able management of water and sanitation for all Our efficient Smart Agriculture ICT solutions help reduce water consumption and use of fertilizers. ƒ Smart Agriculture

STRATEGY & MANAGEMENT STRATEGY & MANAGEMENT SUSTAINABLE DEVELOPMENT GOALS (SDGS) SUSTAINABLE DEVELOPMENT GOALS (SDGS) 39 Reduce inequality within and among countries We help reduce water consumption in agriculture and in private households through the use of ICT. ƒ Stop Wasting – Start Caring! Protect, repair and promote sus- tainable use of terrestrial eco- systems Our efficient Smart Agriculture ICT solutions allow for higher harvest yields while reducing the use of resources such as seeds, water, fertilizers and energy. We also conduct projects to protect biodiversity. We require our suppliers to protect the environment and use resources responsibly. ƒ Connected agriculture ƒ Protecting biodiversity ƒ Supplier Code of Conduct Promote just, peaceful and inclusive societies We have clearly expressed our commitment to com- plying with ethical principles and current legal stand- ards. This commitment has been incorporated in our Guiding Principles and Code of Conduct. We also operate a comprehensive compliance management system. All our activities are compliant with legal reg- ulations and our Binding Corporate Rules on Privacy. ƒ Compliance ƒ Privacy and data security Strengthen the means of implementation and revitalize the global partnership for sustainable development We collaborate with associations, institutions and companies at the national and international levels. ƒ Overview of memberships and collaborations ƒ Sustainable finance

STRATEGY & MANAGEMENT SUSTAINABLE DEVELOPMENT GOALS (SDGS) 41 ƒ Sustainable Procurement ESG KPI ƒ CR-Qualified Top 200 Suppliers ESG KPI ƒ Refugee aid: Number of apprentice and internship positions ƒ People with disabilities ƒ Smart Innovation (pilot phase) NB-IoT rollout ƒ Sustainable Revenue Share ESG KPI ƒ Take Back Mobile Devices ESG KPI ƒ Sustainable Revenue Share ESG KPI ƒ CR-Qualified Top 200 Suppliers ESG KPI ƒ Waste volume ƒ Online billing ƒ Recovered copper cables ƒ Energy Intensity ESG KPI ƒ Carbon Intensity ESG KPI ƒ Renewable Energy ESG KPI ƒ Power Usage Efficiency ESG KPI ƒ Enablement Factor ESG KPI ƒ CDP Supply Chain Coverage ESG KPI As part of the “Stop Wasting – Start Caring!” initiative, we are accepting our responsibility to avoid the use of, replace, reduce or properly recycle plastic and packag- ing in all stages of our business activity. ƒ Amount of Waste Product innovations on maintaining biodiversity and improving agriculture through NB IoT (NarrowBand Internet of Things). ƒ Security Awareness Index ƒ Compliance-related tips (for example, Tell me! portal) ƒ Annual transparency report ƒ Public Private Partnership network expansion ƒ Partnerships in the field of social engagement: Community Investment ESG KPI and Beneficiaries ESG KPI ƒ Socially Responsible Investment (SRI) ESG KPI ƒ Listing in Rating & Rankings

STRATEGY & MANAGEMENT MATERIALITY & ADDED VALUE 43 We then used them as the basis for defining the material topics for our CR reporting. We presented the results of the analysis in a materiality matrix in accordance with the requirements of the Global Reporting Ini- tiative (GRI). Evaluating our sustainability performance In connection with our survey, stakeholders also evaluated our sustaina- bility performance – with the following result: Our stakeholders gave the major topics of service quality, data security and cyber security a good performance rating. In contrast, they see potential for improvement in the topics of EMF, and ICT and gender (as of December 2018). RESULTS OF THE MATERIALITY ANALYSIS Topics were rated as “very relevant,” “relevant,” “less relevant” and “not relevant” in the materiality analysis. We translate their weighting results onto a 100-point scale. Here are the results of the analysis. The overall result The following illustration shows how all of the topics were rated by our stakeholders and from a corporate perspective on a scale of 0 to 100. Top topics for Deutschen Telekom's sustainable business development We consider all topics that achieved more than 70 points on average in the materiality process to be top topics. They are presented on a scale of 60 to 100 below. Identifying material topics In order to determine our stakeholders’ expectations of our sustainabil- ity management, we have used an online survey since 2014. In this sur- vey, our stakeholders can rate topics according to their importance and assess our performance in the different areas. However, willingness to participate in the survey has declined. In 2017, 218 people took the sur- vey; in 2018, it was only 24. In order to still obtain representative feed- back, we conducted an additional document analysis in 2018. This took into account legal texts, studies, position papers and media publica- tions that provide information about the demands and expectations made of Deutsche Telekom with regard to sustainability management. The analysis also considered whether Deutsche Telekom has any influ- ence on the respective topic and whether the expectations have an impact on Deutsche Telekom’s business activity. You can see in the fol- lowing tables when a topic is assigned high relevance. Stakeholder perspective High expectations for the relevant topic when … NGOs Competition Legislation …the majority of NGOs express specific expectations or demand compliance with certain targets or standards. …multiple competitors actively communicate a more ambitious strategic objective or development concepts. …there are concrete regulatory objectives, laws or guidelines that directly impact the company. Financial market …the topic is part of the criteria for the ratings in question and is considered a top issue in the industry. Company perspective High expectations for the relevant topic when … Value creation …all stages of the value chain are affected by the topic. Sustainable Development Goals Industry …the topic is directly related to several SDGs. …the industry is considered a major contribu- tor and Deutsche Telekom holds a leading industry position on the topic. In an internal workshop with experts from various departments, we com- pared the results of this document analysis and the current stakeholder survey with the results of our materiality process from the previous year. We also reviewed whether there was any change in the weighting for a topic from an internal perspective. To ensure that all of the topics are being addressed in full, interviews with other experts were conducted in the run-up to the workshops. The results of these interviews have been added to the workshop results.

STRATEGY & MANAGEMENT STAKEHOLDER MANAGEMENT 45 STAKEHOLDER MANAGEMENT As a company, we are constantly balancing the expectations of a variety of stakeholders when managing our business. That is why our success depends on recognizing the interests and demands of our internal and external stakeholders and meeting and addressing these whenever pos- sible and reasonable. Stakeholders also expect to be kept informed of how companies are responding to their demands. We go even further by actively surveying our stakeholders and involving them in our corpo- rate activities. Engaging in dialog with our stakeholders helps us identify trends early on, which fosters our innovation processes. A good example of this kind of dialog is the Berlin “Digitalization expert committee,” which was launched in 2016 by Stefanie Kreusel (member of the Supervisory Board of Deutsche Telekom AG and T-Systems International GmbH) in cooperation with the German Federal Ministry for Family Affairs, Senior Citizens, Women and Youth. Alternating daily hosts invite interested driving forces from the fields of politics, business, science, and society, as well as citizens. In May 2018, Birgit Klesper, Senior Vice President for Group Corporate Responsibility at Deutsche Telekom, was the daily host for the topic of “Digital and corporate responsibility: ‘…just quickly save the world?’”. The group discussed the social impact of digitaliza- tion at length. The following overview shouws our stakeholder groups ant their top subjects: Analysts, investors and their representatives TOP-SUBJECTS: ƒ Cyber safety ƒ Privacy ƒ ICT Solutions for a Low-Carbon Economy ƒ Employee involvement ƒ Mitigating climate change Stakeholder groups: ƒ Private investors ƒ Funds, asset managers and analysts ƒ (SRI) rating agencies ƒ Analyst organizations and associations ƒ Institutional investors Customers, potential customers and their representatives TOP-SUBJECTS: ƒ Data security ƒ Employee involvement ƒ Privacy ƒ Cyber safety ƒ ICT Solutions for a Low-Carbon Economy Stakeholder groups: ƒ Youngsters and young adults ƒ Families ƒ Middle-aged people ƒ Senior citizens ƒ Small and medium-sized enterprises ƒ Large corporations ƒ Public authorities ƒ Consumer organizations and segment-specific interest groups ƒ Telekom Supervisory Board members Business sector and its representatives TOP-SUBJECTS: ƒ All top-subjects of the materiality analysis 2018 Stakeholder groups: ƒ DAX-listed companies ƒ Other large corporations ƒ Small and medium-sized enterprises ƒ Trade and industry associations ƒ Cooperation partners ƒ Competitors Science, research and education TOP-SUBJECTS: ƒ Employee involvement ƒ Socially relevant application of ICT products and services ƒ Cyber safety ƒ ICT Solutions for a Low-Carbon Economy ƒ Privacy Stakeholder groups: ƒ CR and sustainability research institutions ƒ Political and business research institutions

STRATEGY & MANAGEMENT STAKEHOLDER MANAGEMENT 47 Climate protection and environmental organizations ƒ CDP ƒ B.A.U.M. e.V. environmental management organization ƒ Global e-Sustainability Initiative (GeSI) ƒ Stiftung 2° – Deutsche Unternehmer für Klimaschutz (2° Foundation – German CEOs for Climate Protection) ƒ Sustainability Leadership Forum (in collaboration with B.A.U.M.) ƒ European School of Management and Technology (ESMT) (Sustainable Business Roundtable) ƒ Global Compact ƒ Global Compact LEAD ƒ Caring for Climate ƒ Joint Audit Cooperation (JAC) ƒ Deutsches CSR-Forum (German CSR Forum) ƒ nachhaltig.digital (sustainable.digital) Civic and aid organizations ƒ Bündnis für Verbraucherbildung (Alliance for consumer education) ƒ Charta der digitalen Vernetzung (Charter for Digital Networking) ƒ Deutschland sicher im Netz (Making Germany safe on the Net, DsiN) ƒ London Benchmark Group ƒ Help e.V. aid organization ƒ Bundesnetzwerk Bürgerschaftliches Engagement (National Network for Civil Society) ƒ CCCD – WIE ƒ Aktion Deutschland Hilft e.V. (Germany’s Relief Coalition) ƒ Deutsches Rotes Kreuz (German Red Cross) ƒ DKMS Deutsche Knochenmarkspenderdatei gemeinnützige Gesellschaft mbH (German Bone Marrow Donor Center) ƒ Lebenshilfe e.V. aid organization ƒ SOS-Kinderdorf e.V. (SOS Children’s Villages) ƒ Nummer gegen Kummer youth counseling line ƒ Telefon Seelsorge crisis counseling helpline ƒ Deutsche Telekom Stiftung ƒ Deutschlandstiftung Integration (German Foundation for Integration) ƒ Bundesarbeitsgemeinschaft der Senioren-Organisationen (BAGSO – German Association of Senior Citizens’ Organizations) ƒ Code of Responsible Conduct for Business ƒ GIZ Private Sector Advisory Board ƒ Together Participation ƒ Stakeholder survey ƒ Development programs for suppliers ƒ YAM: information, discussion and awareness-raising ƒ Pilot project: Making impact measurable ƒ Strengthening our corporate culture, encouraging a speak-up culture ƒ Collaboration for the protection of minors ƒ Cooperating in the name of security ƒ Co-designing Deutsche Telekom products and services in the think tank ƒ Stop Wasting – Start Caring! ƒ Digitalization expert committee Dialog ƒ 11. Sustainability Day at Magyar Telekom ƒ 1001 truths ƒ Expertise in the CR Report: You can ask Deutsche Telekom experts questions on selected topics, such as sustainable products and services ƒ Magenta Security Congress ƒ Cyber Security Summit ƒ SRI Roadshows ƒ Evaluating and implementing the EMF Policy Information ƒ Teachtoday promotes media literacy ƒ Good to know: Internal CR newsletter for employees ƒ Data protection tips with our one-pager ƒ The We Care website: Publication of a new edition of the magazine ƒ Information Centre on Mobile Communications (IZMF) OVERVIEW OF MEMBERSHIPS AND COLLABORATIONS Business and industry associations ƒ American Chamber of Commerce in Germany ƒ Bundesvereinigung der Deutschen Arbeitgeberverbände (BDA, Confederation of German Employers’ Associations) ƒ BITKOM industry association ƒ Corporate Digital Responsibility Initiative ƒ European Telecommunications Network Operators’ Association (ETNO) ƒ Forum Nachhaltige Entwicklung der Deutschen Wirtschaft e.V. (econsense, Forum for Sustainable Development of German Business) ƒ GSM Association (GSMA) ƒ International Chamber of Commerce (ICC) ƒ Bundesverband der Deutschen Industrie e. V. (BDI, the Voice of German Industry)

STRATEGY & MANAGEMENT COMPLIANCE 49 Our employees can use it to contact the "Ask me!" advisory team, which will provide them with dependable answers if they are unsure about how they should act. We have also introduced various measures to promote a culture of compliance at our company. Identification and monitoring Despite the best preventative measures, we are not always able to pre- vent breaches of law or serious violations of internal regulations at the company. We have created the Tell me! whistleblower portal to uncover non-compliant conduct. Our employees as well as external parties, e.g., business partners or customers, can use the portal to report miscon- duct (Protecting whistleblowers). Deutsche Telekom thoroughly investi- gates all reports within the limits of the legal framework and punishes such activity appropriately. We have introduced a Group-wide reporting process to control and monitor these activities, including regular inter- nal and external audits of our compliance management activities. Compliant interaction with business partners and suppliers Our Code of Conduct specifies proper conduct for all of our employees. With our Code of Human Rights & Social Principles, we make a commit- ment to protecting and promoting human rights including compliance with the International Labour Organization’s core labor standards. Our Supplier Code of Conduct stipulates that our suppliers must comply with the principles and values set forth by our Code of Conduct and the Code of Human Rights & Social Principles. We also expect our suppli- ers to require the same of their sub-contractors. Our suppliers are also under the obligation to take all steps necessary to prevent and punish active and passive forms of corruption. The Code of Conduct is part of the General Terms and Conditions for Purchasing, but does not replace the laws and regulations of countries where our suppliers are active. Rather, its aim is to facilitate compliance with these laws and regulations and guarantee that they are implemented faithfully and effectively. We have been offering e-learning on compliance to our suppliers since 2014. We select our business partners based on compliance criteria and conduct risk-oriented compliance business assessments. This applies to customers and suppliers as well as consultants (Consultant Policy), sales agents, development partners, and joint venture partners. Responsible use of artificial intelligence (AI) Under the leadership of Group Compliance Management, we adopted guidelines on the ethical use of artificial intelligence (AI) in 2018. They define how we at Deutsche Telekom should use AI responsibly and how we should develop our AI-based products and services in the future. We do not claim that our guidelines constitute universally valid rules on the responsible use of AI, but instead want to develop them further in dialog with our employees and external stakeholders. A CLEAR REFERENCE FRAMEWORK: OUR CODE OF CONDUCT Integrity, respect and compliance with the law – this is the principle on which Deutsche Telekom’s business activities are based. Our Code of Conduct sets forth the central reference framework for legally compliant and moral conduct. We revised the Code in 2017, with the goal of focus- ing on issues of compliance and integrity and finding a positive way to raise employee awareness of, and motivation to tackle, these issues. The revised Code of Conduct continues to provide an overview of our understanding of values and of the basic principles that guide our actions. In some places, this overview provides more detail by referring to internal policies and regulations. The Code of Conduct makes a significant contribution to our business success by providing a fixed foundation for our business activities. FURTHER COMPLIANCE MANAGEMENT CERTIFICATION In 2018, we once again had our compliance management system certi- fied with a focus on anti-corruption measures. This is our way of ensur- ing that we can confront risks consistently and that we have established effective processes in the company. Three further international compa- nies were certified in 2018 (2017: 12 companies; 2016: 10). The certification focused on processes in Procurement, Sales, HR, and Mergers & Acquisitions, as well as on events, donations, and sponsor- ships. The potential danger of corruption is greatest in these areas. The auditors completed their audit of the effectiveness of our compli- ance management system,and the system passed with flying colors. We document details regarding audit content and corporate depart- ments that have undergone anti-corruption audits in our audit report. Certificates and audit assessments play an ever-increasing role, for instance in bidding processes and decisions to award bids, offering a clear advantage whenever we are in competition with other companies. External auditors previously certified our compliance management system with a focus on anti-corruption measures and anti-trust law in 2010 and 2013. STRENGTHENING OUR CORPORATE CULTURE, ENCOURAGING A SPEAK-UP CULTURE A compliance management system is only effective if it is actually imple- mented in everyday activities. This is why we started the Transparent Company Culture initiative in 2016 with the intention of encouraging integrity and a speak-up culture within our company. In the following year we launched a large-scale study on the culture of compliance at Deutsche Telekom. On the basis of the results, we put together a broad set of measures to encourage the speak-up culture at the company. We continued these measures in 2018. The results of our study on the culture of compliance In 2018 we conducted an online survey in which 29,000 employees from national and international Deutsche Telekom companies took part. The European School of Management and Technology (ESMT Berlin) and Hertie School of Governance were our research partners in this extensive study. The initiative was supported by an expert committee created specifically for this purpose. The committee was comprised of Deutsche Telekom employees as well as representatives from non- governmental organizations, the business and scientific communities and society. The results are very positive overall. 97 percent of those surveyed are committed to Deutsche Telekom’s rules and are not willing to act in an unethical manner. The vast majority stand by their own values and would not stray from them, even under pressure. A large proportion of those surveyed also state that they would report specific misconduct

STRATEGY & MANAGEMENT COMPLIANCE 51 "TELL ME!" PORTAL: 137 REPORTS RECEIVED In 2018, 137 compliance-related reports were made to Deutsche Telekom via the "Tell me!" portal (146 reports were made in the previ- ous year). 29 of those are still being reviewed for plausibility and investi- gations are being made into 68 plausible reports (as of January 3, 2019). 46 of these were confirmed as actual misconduct and were punished accordingly. Nine cases are still in the investigation phase. In confirmed cases, we impose systematic sanctions that are propor- tionate to the act and the guilt of the perpetrator and are in line with applicable legal provisions. Most of the tip-offs received in 2018 focused on “financial interests” (possible cases of fraud, breach of trust, misappropriation, theft, manipulation of targets, and unfair sales methods). In principle, we always follow up on all compliance-relevant tip-offs, even those that reach us through other channels. INVOLVEMENT IN ANTI-CORRUPTION INITIATIVES Deutsche Telekom AG regularly joins forces with national and interna- tional organizations that deal specifically with compliance-related issues, including anti-corruption. As a member of associations and organizations such as the Compliance & Integrity forum of ZfW (Center for Business Ethics) and BITKOM (Federal Association for Information Technology, Telecommunications and New Media), we make use of the opportunity to exchange ideas and experiences related to compliance. Thanks to our collaborative approach and exchange of experiences, we not only make a contribution to anti-corruption within the Group, but also to initiatives in this field worldwide. We use the findings to work on continually improving our compliance management system. MAJOR ONGOING LEGAL PROCEEDINGS Deutsche Telekom is party to several proceedings both in and out of court with government agencies, competitors and other parties. The proceedings mentioned in the 2018 annual report are of particular importance from Deutsche Telekom’s point of view.

STRATEGY & MANAGEMENT REPRESENTING POLITICAL INTERESTS 53 ƒ Improving comprehensive, cross-technology protection of young people at national and EU levels (in particular by advancing a com- prehensive, Group-wide minimum standard within the EU and ongo- ing dialog with organizations involved in the protection of minors both nationally and at EU level), ƒ Improving customer service standards, ƒ Improving consumer protection in telecommunications (e.g., during ongoing IP migration and when switching providers for fixed-line and mobile connections), and ƒ Our efforts to provide better transparency for our customers (e.g., the data protection one-pager and the product information sheet on the Transparency Ordinance). Within the scope of ongoing IP migration in the fixed-line network, Deutsche Telekom has switched most of its customers to IP, especially in the last four years, and has undertaken numerous measures to make the migration as easy and seamless as possible for customers. Deutsche Telekom is also continuing its commitment in issues of provider switching, with the goal being to make it easier for both fixed- network and mobile consumers to switch providers without any service interruptions. In all these areas, Deutsche Telekom stands for a con- structive and solution-oriented approach that is geared to both the consumers’ interests and the interests of our company.

STRATEGY & MANAGEMENT HUMAN RIGHTS 55 Human rights in the supply chain We expressly require our suppliers to assume responsibility as a way of making sure human rights are also protected outside of our Group. To this end, we supplemented our sustainable procurement strategy with supplier management to improve our sustainability performance in our supply chain and ensure respect for human rights. The detailed results of our Group-wide auditing program are available here. CODE OF HUMAN RIGHTS & SOCIAL PRINCIPLES In 2017, we revised our Social Charter and renamed it Code of Human Rights & Social Principles, which was adopted by the Board of Manage- ment in November2017. This update underscores our commitment to protecting human rights and to the goals of the German National Action Plan on Business and Human Rights adopted by the Federal Govern- ment in 2016. There were only some minor content changes. Among other things, a statement was incorporated summoning all employees to respect and promote human rights and social principles. We also changed some of the wording. The human rights principles are now mentioned more explicitly, and our existing processes and strategies explained in more detail. The reason for the revision was primarily the increased expectations of governments, NGOs and other stakeholders. In 2018, we announced the Code of Human Rights & Social Principles in all companies Group-wide and carried out a communication cascade. Additionally, the Code of Human Rights & Social Principles is our com- mitment to complying with the guidelines and the Declaration of Princi- ples concerning Multinational Enterprises and Social Policy issued by the International Labour Organization (ILO), the Organisation for Eco- nomic Co-operation and Development (OECD), the Universal Declara- tion of Human Rights as well as with the UN Guidelines for Business and Human Rights and the UN Global Compact. REPORTS AND INQUIRIES TO THE CONTACT POINT FOR HUMAN RIGHTS We established a contact point for human rights at Deutsche Telekom in 2013. Between January1 and December31, 2018, the contact point received nine reports related to human rights, submitted either directly to the contact point or through the (anonymous) whistleblower portal. Not all of these tip-offs were deemed plausible. Most of the inquiries and reports related to the topic of "compliance and verification of human rights at Deutsche Telekom". A few reports related to the topic of ongoing professional education. We also received several fundrais- ing and support questions, which we forwarded to the appropriate departments. Of course, all reports were treated as confidential.

STRATEGY & MANAGEMENT RISK AND OPPORTUNITY MANAGEMENT 57 We are convinced that mobile communications technology is safe if specific threshold values are complied with. We are supported in this conviction by the assessment of the recognized bodies. Our responsible approach to this issue is manifested in our Group-wide EMF Policy, with which we commit ourselves to more transparency, information, partici- pation and financial support of independent mobile communications research, far beyond that which is stipulated by legal requirements. We aim to overcome uncertainty among the general public by pursuing an objective, scientifically well-founded and transparent information policy. We thus continue to see it as our duty to step up our close dialog with local authorities and ensure that this dialog leads to success. This par- ticularly applies since our longstanding collaboration with municipali- ties to expand the mobile network was enshrined in law in 2013; previ- ously, this collaboration was based on voluntary self-commitments by the network operators. SUPPLIERS We see more sustainability in our supply chain as an opportunity – for our reputation and our business success. Apart from the general risks associated with our global procurement activities, we can be exposed to country- and supplier-specific risks. These include, for example, the use of child labor, the conscious acceptance of environmental damage or inadequate local working and safety conditions. We reduce these risks by systematically reviewing our suppliers. We conduct these audits within the scope of the Joint Audit Corporation (JAC). The aim of the JAC is to reduce sustainability risks in our supply chain and to improve eco- logical and social aspects, including the issue of human rights. As such, the audit is compliant with internationally recognized guidelines and standards, such as the ILO Core Labour Standards, the UN Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises. Our partnerships with suppliers that com- ply with international sustainability standards ensure a high level of product quality and reliable procurement. We have a special develop- ment program in place to help strategic suppliers introduce business practices that are both socially and ecologically acceptable while remaining economically efficient. This program again showed measura- ble successes in the reporting period and has three major advantages: It has a positive impact on our suppliers’ working conditions, enhances their profitability, and makes the economic relevance of sustainability clear for both sides, i.e., for our suppliers and for the Group alike. For instance, better working conditions at our suppliers reduces the num- ber of work-related accidents as well as the staff churn rate. That, in turn, ensures high product quality and increases productivity, while at the same time lowering costs for recruitment and training. Thus, not only are we strengthening our suppliers’ profitability and CR perfor- mance, we are also significantly reducing identified risks. HEALTH AND ENVIRONMENT Mobile communications, or the electromagnetic fields used in mobile communications, regularly give rise to concerns among the general population about potential health risks. This issue continues to be the subject of public, political, and scientific debate. Acceptance problems among the general public concern both mobile communications net- works and the use of mobile devices such as smartphones, tablets and laptops. The discussion also has repercussions for the build-out of mobile communications infrastructure and the use of mobile devices. In the fixed network, it affects the use of traditional IP and DECT (digital cordless) phones and devices that use Wi-Fi technology. There is a risk of regulatory interventions, such as reduced thresholds for electromag- netic fields or the implementation of precautionary measures in mobile communications, e.g., amendments to building law, or also the risk of a labeling requirement for handsets. Over the past few years, recognized expert organizations such as the World Health Organization (WHO) and the International Commission on Non-Ionizing Radiation Protection (ICNIRP) have repeatedly reviewed the current thresholds for mobile communications and confirmed that – if these values are complied with – the use of mobile technology is safe based on current scientific knowledge. The expert organizations, cur- rently the ICNIRP, regularly review the recommended thresholds on the basis of the latest scientific findings.

STRATEGY & MANAGEMENT PRIVACY AND DATA SECURITY 59 IMPLEMENTATION OF THE EU GENERAL DATA PROTECTION REGULATION The EU General Data Protection Regulation (GDPR) entered into force in May 2016 and after a two-year transition period, the regulation has been binding since May25, 2018. Since laws always require interpreta- tion as to how they should be implemented in day-to-day life, the Group Privacy department has now prepared uniform rules for the entire Group: the Binding Interpretations. They were compiled in collaboration with data privacy experts in the national companies. The Binding Inter- pretations include specific recommendations and best practice exam- ples to implement the EU regulation. For example, they explain what a customer consent must entail, or how customer data has to be erased, if this is requested by the customer. From January 2017 to May25, 2018, the new requirements based on the Binding Interpretations were intro- duced throughout the Group in a second phase. This involved checking and, where necessary, adjusting all the IT-systems. All employees were informed about the General Data Protection Regulation and more than 10,000experts received intensive training. The implementation was followed by the third and last phase of the EU-wide project: the control phase. In this phase, all affected entities of the Group were asked whether they had implemented all relevant requirements. In addition, spot checks for compliance with the GDPR were carried out at 28 enti- ties. PUBLICATION OF INTERNATIONAL TRANSPARENCY REPORT Telecommunications companies are legally obligated to cooperate with security agencies. This includes surveillance measures to record telecommunications connections or disclosure of customer information. Deutsche Telekom has been publishing an annual transparency report for Germany since 2014, which covers the types and amount of informa- tion we disclose to security agencies. The transparency report was expanded to include all the national companies in 2016. The interna- tional transparency report was last published in February2018. International legal framework conditions differ considerably. In some countries it is illegal to disclose security measures, while in others surveillance is directly conducted by the authorities without the involve- ment of telecommunications companies. You can find more information on the local situations in the various country reports at http://www.telekom.com/transparency-report. We consider it the responsibility of the authorities to ensure transpar- ency regarding security measures and called for improved online secu- rity in the context of a ten-point program in January 2015. Until our requests are met, we will strive to provide the necessary transparency within the legal possibilities.

CUSTOMERS & PRODUCTS INFRASTRUCTURE EXPANSION 61 INFRASTRUCTURE EXPANSION A well-developed network infrastructure enables economic perfor- mance and participation in the knowledge and information society. As a result, demand for ever faster, full-coverage data services is immense. That is why we continue to rapidly expand our infrastructure and improve transmission speeds with new, secure technology. OBJECTIVES MEASURES MEASURING SUCCESS § 95 percent LTE coverage by § Integrated network strategy § Network coverage status 2018 § 80 percent VDSL - vectoring coverage by 2018/19 § Migrate to IP EXPANDING OUR INFRASTRUCTURE The amount of data transmitted worldwide is growing rapidly. A study conducted by the International Data Corporation concludes that the global data volume will rise from around 33 trillion gigabytes at present (2018) to 175 trillion gigabytes by 2025. Networks need to be continu- ally expanded to be able to handle this volume. We have been the largest investor in this area in Germany for years now and will continue to drive network expansion. The main objectives of our pan-European integrated network strategy (INS) form the basis for these activities: growth, efficiency and quality. We will continue to expand our networks, increase the efficiency of our systems and further strengthen our role as a leader in network quality. Our integrated net- work strategy is in line with the network expansion goals specified by the EU Commission and the German federal government (digital agenda and broadband strategy). Deutsche Telekom’s integrated network strategy for Europe is based on the four pillars of LTE, fiber optics, VDSL vectoring and hybrid. In addi- tion to expanding the LTE mobile network, fiber-optic expansion is the focus of Deutsche Telekom’s INS for Germany. Moreover, we are in the process of implementing the new 5G standard, having demonstrated the first 5G data connection in Europe’s live network in Berlin in 2018. We even exceeded the targets we had set ourselves in Germany by 2018 for implementing our integrated network strategy: At present, about 98 percent of the population can use LTE (target 2020: 99 per- cent). Furthermore, 26.5 million households in Germany can already order a rate with up to 100 Mbit/s on our fixed network. This figure keeps growing daily, as can be followed in our online ticker. Upgrading our network architecture We intend to make our networks faster and more efficient. To do this, we are deactivating all analog public switched telephone network (PSTN) platforms that we no longer need and switching our entire tele- phone network to IP-based lines. 90 percent of the current technology was already replaced with IP technology at the end of 2018. We will rely on fiber optics when updating our network architecture in order to meet our customers’ demands for fast network connections. Using the fiber optic-based super vectoring technology speeds up download data transmission rates to up to 250 Mbit/s and up to 40 Mbit/s when it comes to upload transmission rates. These figures will rise even more in the future. Irrespective of the expansion and renewal of our infrastructure, we aim to operate our networks in the most stable and failure-free manner pos- sible. We thus ensure that the network is still available as normal even when major events like festivals or political summits are taking place. Our Disaster Recovery Management also takes effect in natural disas- ters like floods so that those affected can communicate again quickly. NEW COMMUNICATIONS STANDARD: PREPARATIONS FOR 5G IN FULL SWING The current LTE communications standard is the fourth generation standard (4G). LTE is continually developing and can so far fully meet the requirements of consumers for ever greater bandwidth. The new 5G communications standard will not only offer significantly improved net- work capacity and higher speeds, but also lower latencies, greater relia- bility and security, and improved network flexibility for customized solu- tions. As a result, 5G will enable a host of applications in industry and the logistics sector that are not yet even conceivable by today’s stand- ards. Eight-point program for 5G development In October 2018, Deutsche Telekom presented an eight-point program for developing a 5G network infrastructure. The goal: In Germany, we plan to cover 99 percent of the population and 90 percent of the coun- try with 5G by 2025. The further expansion of LTE/LTE Advanced contributes to the future 5G infrastructure, because LTE is the basis for 5G and will remain an

CUSTOMERS & PRODUCTS INFRASTRUCTURE EXPANSION 63 this. Every national company can then use the building blocks to create an offer that suits their local market and customer requirements. We can also use this technology to offer new solutions throughout Europe within just a few days. Pan-Net build-out continued in 2018. To date, the network is already available for 45 million customers served by eleven national companies in Europe. The Pan-Net cloud is an association of data centers distributed through- out Europe. These are located in Hungary, Poland, Greece, North Mace- donia, Romania, Slovakia, the Czech Republic and Germany. Six data centers were added in 2018: two in Greece, two in Croatia, and one each in Hungary and Germany. SWITCH TO IP TECHNOLOGY ADVANCES Thanks to IP technology, phone calls are no longer transmitted via analog channels or using ISDN technology but in the form of data pack- ets over the secure Deutsche Telekom network, a method that has been the standard in online and mobile communications services for some time now. The switch to IP-based lines is the basis for faster internet con- nections and increasingly complex applications. We will thus meet the growing demands of our customers. At the same time, energy use with IP technology is considerably lower than with the network technology previously used. The switch therefore also helps us decrease our CO2 emissions. In total, we have already switched 20.3million lines to IP, two million of which are for business customers. In the other EU countries, we also increased the number of IP lines. In Croatia, Montenegro, NorthMace- donia, Slovakia and Hungary, all lines have already been switched to IP. In Greece, 74percent of the lines are running on IP technology, and in Romania the figure is 47percent. AWARD FOR MOBILE NETWORK IN GERMANY Best Network 2019 Computer Bild (issue 25/2018) Computer Bild voted Deutsche Telekom’s mobile network the best in Germany for 2019. With an overall score of 1.8, we headed the field of competitors. Several first places in the 2018 Connect readers’ choice (issue 6/2018) We are the best mobile network operator and the best fixed-network provider. This was once again the conclusion of the annual choice of the readers of the trade journal Connect. Our products and services also won additional prizes in the following catego- ries: Mobile network operators Network operator prepaid cards Fixed-network providers German cloud services Complete smart home systems Email services CHIP (issue 1/2019) We came out on top in CHIP’s mobile network test and were voted best network. Connect mobile network test (issue 1/2019) We were also the overall winner of the 2019 Connect mobile network test, with a rating of “very good”. The testing examined the voice and connection quality during phone calls as well as data communication via mobile internet. The measurements were taken at various locations, such as cities and small towns as well as on trains.

CUSTOMERS & PRODUCTS SUSTAINABLE PRODUCTS AND SERVICES 65 It’s said digitalization can help save energy. But doesn’t the network need vast amounts of energy? That’s true, the network needs energy to run. At the same time, it ena- bles solutions that save far more energy than it itself consumes. Cars will be able to communicate with each other in real time in the future thanks to the new 5G communications standard. That means the vision of safe, congestion-free road traffic will become reality, which in turn will cut fuel consumption and CO2 emissions. And there are smarter and smarter ways of finding a place to park. Our Park & Joy app helps driv- ers find free parking spots quickly, which not only saves a lot of hassle, but also fuel. Last but not least, the network is a crucial factor in the energy transition. It wouldn’t be feasible without networking, in other words, without digitalization.Nevertheless, the network’s power con- sumption needs to be minimized. That’s why we’re also ensuring that our infrastructure is as energy-efficient as possible. That sounds highly promising. But what about the security of data? People will use sustainable digital solutions only if they can trust in their personal data being kept secure. That’s why we’re doing all we can to make Deutsche Telekom’s network not only exceptionally energy-effi- cient, but also exceptionally secure. To successfully protect ourselves and our customers against hacking, we operate one of the largest and most advanced defense centers in Europe, for example. We’re focusing on short-distance internet: It is crucial that data does not pass through other jurisdictions when being moved around. It’s also necessary to ensure that people have complete control of their digital data, in other words, can object to use of that data. Data must only be allowed to be analyzed in anonymized form. Data protection is one aspect. What else is needed so that users can move about the internet securely? People must know how to use digital media properly and be able to assess potential risks realistically. They must be able to differentiate between credible and deliberately misleading information. Skills like that go far beyond questions of protecting personal data. We’re commit- ted to fostering media literacy skills to strengthen users in these areas. On our “Media, sure! But secure.” website, for example, we offer tutori- als on subjects such as online opinion-making or data privacy and secu- rity, as well as information on subjects like the darknet or digital legacy. The content is available in several languages and can be used for self- learning and for teaching or workshops. So what do you do about people who are afraid of losing their job due to digitalization? That could easily affect many of your colleagues ... It goes without saying that digitalization is also impacting the world of work. There are activities that will be automated in the future. For start- ers, no one would argue against robots taking over hard and monoto- nous work. But whether machines will actually take over all our work or rather become new colleagues, and at the same time new fields of work for people will emerge – those are questions no one can answer with certainty.One thing’s for sure: The way we work will change. The future world of work will be digital and agile and will demand completely new skills and job profiles. So that employees learn how to handle these changes, enterprises must break down fears, realign their skills and promote lifelong learning. Collaboration with employee representatives is vital in that: After all, the changes have to be reconciled with employ- ees’ interests, and their trust in their employer has to be strengthened. But the main point is that we need to shape the future together. What role does analysis of data play in increasing sustainability? A key role! Data analyses are important if we want digitalization to serve people. Data is the raw material of our age. However, added value and prosperity are created only where raw materials are processed and refined. We must therefore leverage data to our advantage – such as for research into diseases or smart traffic management. But one thing is certain: That’s only possible if people retain control of their personal data and analyses are always anonymous. Among other things, we’re one of the first companies to enshrine that in binding form in our data privacy principles so that we can ensure we meet the high requirements we’ve set in relation to the use of big data. Artificial intelligence is also a much-discussed issue at present. What is it and what is your stance toward it? Artificial intelligence is basically software that replaces brainwork. Its task is to help people, expand their abilities, and not to confine them. Many of us aren’t aware that we use artificial intelligence in our every- day activities, such as in searches on the internet or in navigation sys- tems. Chatbots – digital dialog systems with which users can communi- cate via text or voice – are also based on AI. We at Deutsche Telekom also use such a digital service assistant to complement our personal customer service. The adaptive system is becoming better and better at answering customers’ inquiries with every passing day. If the service assistant can’t answer a query, the customer is forwarded to a customer advisor.Even though artificial intelligence is still in its infancy, ideas that still seem like science fiction today may become reality down the road. We therefore need guidelines in a digital world that’s changing at a ter- rific pace. They will help us recognize what’s important and right. In 2018 we adopted guiding principles on the ethical use of artificial intel- ligence, defining how we at Deutsche Telekom aim to handle this issue. The guiding principles are a starting point for further developing rules on the responsible use of artificial intelligence in dialog with our stake- holders – with politics, science, and society. Because we can only define what “digital responsibility” means together. PROMOTING SUSTAINABLE PRODUCTS AND SERVICES We are committed to systematically using the sustainability potential of ICT. Our primary focus in these efforts is on growth segments such as Internet of Things (IoT), smart cities, smart home and e-health. Sustainable products are also an important pillar of our integrated climate strategy. Managing the issue of sustainable products calls for systematic measures to be implemented throughout the supply chain. This is why we begin with procurement: We can thereby ensure that sustainability criteria are complied with along the supply chain. We aim to have our products certified by recognized environmental labels such as the Blue Angel and the TÜV “Certified Green Product” label. The strict requirements of these labels help us see how we can further improve our products. They also help us inform our customers of the benefits of choosing sustainable products. We also want to make our product packaging more sustainable: Wherever possible, packaging is getting smaller. To protect products in the packaging, we will be utilizing more insulating elements made from non-plastic materials.

CUSTOMERS & PRODUCTS SUSTAINABLE PRODUCTS AND SERVICES 67

CUSTOMERS & PRODUCTS SUSTAINABLE PRODUCTS AND SERVICES 69 content. This information is encrypted and transmitted to Deutsche Telekom’s Connected Things Hub IoT platform where it is stored in compliance with data protection regulations. If certain threshold values are exceeded or problems detected, in-house technicians are notified and can take action. This helps lower costs for facility management and improve service. SMART CITIES: INNOVATIVE SOLUTIONS FOR SMART URBAN SPACES The majority of worldwide CO2 emissions come from cities – an effect that is being intensified by increasing urbanization. At the same time, cities can also be the driving force behind and the origin of sustainable solutions. New offerings such as car and bike sharing, as well as meas- ures such as setting up green zones are helping to reduce CO2 emis- sions. However, these alone are not enough to achieve the climate tar- gets set by the global community in the Paris climate accord. Smart city concepts provide opportunities for additional, urgently needed effi- ciency improvements. In this context, Deutsche Telekom offers various solutions of its own as well as products developed jointly with partners. These include the parking app Park & Joy that shortens the time spent looking for a parking spot, smart street lighting that lowers electricity consumption, or connected waste containers that help avoid waste pickup when the containers are empty. Starting with one of our first Smart City projects, “T-City” Friedrichs- hafen, our activities in this field have continued to develop. In 2016 we joined the mySMARTLife EU initiative, in 2017 we established the Euro- pean Smart Solutions Center, and in 2018 we launched the cross-seg- ment initiative Leveraged Smart Cities with the goal of combining our activities in this field. We have already supported the implementation of Smart City solutions in 18 cities in 10 European countries. Partnership with the smart city program of the United Nations In 2018 we entered into a partnership with the United Smart Cities program of the United Nations Economic Commission for Europe. The program has been running since 2014 and connects existing smart city activities across the globe. It helps cities and other players work together, share solution concepts and drive forward smart city projects. It will thus, among other things, make a contribution to achieving the Sustainable Development Goals. We support the program with our expertise in networking and smart solutions. Digital Cities and Regions: working together on challenges Together with the German Association of Towns and Municipalities we launched the Digital Cities & Regions initiative in the spring of 2018. The goal of the project is to jointly advance digitalization in municipali- ties and develop intelligent solutions. The top priority in this is to improve the quality of life and benefits for the local citizens. More t han 23 cities and communities were involved in the development work. In the future, we plan to look at individual aspects of a digital city and develop specific solutions at quarterly Design Sprint meetings. mySMARTLife in Hamburg The city of Hamburg, together with the cities of Nantes and Helsinki, were awarded the EU lighthouse project mySMARTLife in 2016. Numerous measures intended to launch the Smart City transformation are slated to be implemented by 2021. The core topics of these light- house projects are increased use of renewable energies, climate- friendly living and environmentally friendly mobility. For example, use of electric vehicles will be promoted in the Hamburg-Bergedorf project region. Intelligent street lighting will also be employed. All projects involve active citizen participation. The Hamburg project proposal was backed by a total of 14 partners, including the borough of Bergedorf, HafenCity University, the HAW Hamburg university of applied sciences, electricity grid operator Stromnetz Hamburg, public transport operator Verkehrsbetriebe Hamburg-Holstein and Volkswagen. The project is being funded as part of the European Union’s Horizon 2020 research and innovation program. The project results will be compared to other lighthouse projects in the EU. The project will also examine which measures can be implemented in the next mySMARTLife project cities – Varna (Bulgaria), Bydgoszcz (Poland), Rijeka (Croatia) and Palencia (Spain). Digital City Darmstadt In June 2017, Darmstadt won the Digital City contest. The aim of the competition, organized by Bitkom, is to create a model digital city in German and Europe. Darmstadt won out against the competition and since then has implemented various solutions in connection with its Darmstadt program to make the city more sustainable, easier on the environment and more livable. Deutsche Telekom is providing support, among other things, with networking solutions, sensors to measure air quality, intelligent parking sensors and infrastructure for operating autonomous trams. Smart City Bonn In Bonn, we began connecting street lighting and waste containers with intelligent sensors and measuring air quality at the end of 2017. The street lamps can be dimmed and, with the help of motion sensors, auto- matically become brighter when pedestrians approach. The public util- ity company is also notified when a bulb needs to be replaced. On aver- age, this technology saves up to 60 percent of the street lamps’ operat- ing costs. Additionally, we measure the fill level in a number of recycling containers using installed sensors. The municipal garbage service need not come for the container until it is actually full. Another sensor meas- ures the air quality of the inner city. We also provide the associated anal- ysis software. Smart Cities app By 2022, Germany must provide online access for all standard adminis- trative services such as driver’s license or passport documents – as required by the online access law. Deutsche Telekom and the German Association of Towns and Municipalities are helping local administrative authorities with the development and implementation of digital services. These should be as simple, citizen-friendly and standardized as possi- ble. The city of Monheim am Rhein laid the foundation in 2018 when it com- missioned Deutsche Telekom to develop the Monheim Pass. The app bundles digital services for the public sector, such as adjusting registra- tion details or applying for a driver’s license and, in the future, will also enable the use of mobility solutions such as car and bike sharing, for example. The app also provides information on local recreational activities.

CUSTOMERS & PRODUCTS SUSTAINABLE PRODUCTS AND SERVICES 71 T-Systems Iberia Gijón-In: a new integrated concept of smart cities In the city of Gijón (Spain), T-Systems is developing "GIJÓN-IN”, an inno- vative, intelligent and integrated city management project. The project aims to achieve more efficient administration and provision of municipal services based on Big Data techniques, IoT technology, and ICT solu- tions. The project has been sponsored by the European Regional Devel- opment Fund (ERDF) and it is responsible for implementing up to 22 dif- ferent schemes in the Spanish city over a period of 36 months. The 16 initiatives to make Gijón a truly ’smart city’ cover various topics, such as complete digitalization of municipal services, promotion of citizen and business participation, and activities for sensing and handling informa- tion generated in the city. Telekom Albania Wi-Fi coverage in public places Making technology available to society at large is one of the pillars of Telekom Albania’s corporate responsibility. Within this framework, the company supported a project organized by the city authority in Tiranato to cover a very busy tourist area in the city with a Wi-Fi signal. The ser- vice is offered free of charge to citizens and tourists who are empow- ered to navigate freely on the Internet. This project neatly combines technology with access for all groups in society. Smart City conference highlights Danish-Albanian dialogue The Royal Danish Embassy in Zagreb organized a business event in Tirana on 7 June 2018. The goal of this event is to showcase Danish and Albanian achievements in organizing and managing smart towns and cities. A further aim is to inspire further progress in smart solutions for urban planning, mobility, people’s well-being, and in the field of energy and environment. The event included presentations of case studies and a panel discussion with representatives from different cities. Mr. Daniel Michel, Vice President for Smart Cities at T-Systems, was invited to share Telekom’s case studies. The event also held networking sessions for B2B meetings. COMFORT CHARGE: EXPANDING THE CHARGING INFRA- STRUCTURE FOR ELECTRIC VEHICLES Since the fall of 2018, we have been working with our subsidiary Com- fort Charge to expand our German network of charging stations for electric vehicles: We are upgrading parts of the existing telecommuni- cations infrastructure into charging stations. To do this, we are using the power supply from our street cabinets which is needed for our fixed line and internet connections. The gray boxes at the side of the road, which house a separate power supply and digital measuring point from the broadband expansion, can be upgraded to include charging points rela- tively easily This sustainable use of existing infrastructure will help avoid additional structures in the cityscape and enable rapid implementation. Each charging station can supply two vehicles with 11kW each through type-2 charging plugs. These “destination charging points” will supply enough power in one hour for a range of 50-75 kilometers – depending on the vehicle type. While the first destination charging points will be set up in selected cities in 2019, we have been at work since the fall setting up a nationwide rapid charging network at network nodes with charging capacities of more than 100kW which is already fit for the next genera- tions of vehicle batteries. The electricity for our charging network comes from renewable energy sources. Our charging points in Germany have a uniform price per minute, although rapid charging costs around a third more than regular charg- ing due to higher set-up costs. SUSTAINABLE PRODUCTS AND SERVICES IN GREECE In 2018, the OTE Group launched and developed several products and services to help customers improve their sustainability performance. The Group also successfully implemented some significant projects with the same objective. A number of examples are listed below: In 2018, COSMOTE in collaboration with the Kir-Yianni winery in Naoussa, implemented a pilot application called “Smart Wine” which ensures the quality conditions of the wine being stored or transported step by step until it reaches consumers. This approach utilizes innova- tive Narrow-Band Internet of Things (NB-IoT) technology. Smart Wine application allows the conditions to be monitored throughout the wine’s route from the producer to the distributor and on to the consumer. Using Narrow-Band Internet of Things (NB-IoT) technology, the first "smart university campus" was launched by COSMOTE in Xanthi in col- laboration with the Democritus University of Thrace (DUTH). The pilot project fully utilizes the advantages of the NB-IoT technology for imple- mentation of smart applications to enhance air and water quality moni- toring, and management of the campus’s lighting and heating oil. Various digital transformation projects were implemented during 2018 for the private and public sector. The innovative v-Banking service, which is unique at European level, was implemented for EUROBANK and it modernizes banking transactions giving priority to businesspeo- ple and businesses. Eurobank’s clients are now able to have personal- ized customer service within a secure digital environment without hav- ing to visit a bank branch. Fraport Greece upgraded 14 regional airports by installing COSMOTE state-of-the-art IT and telecommunications Solutions to make a substan- tial contribution to uninterrupted and secure communication at airports, enhance the efficiency of business operations, and optimize services for passengers. Coca-Cola HBC has selected the OTE Group to provide IT support ser- vices in 19 countries. This is a new investment in Greece that safe- guards business continuity and creates more than 80 new jobs in the IT sector. The IT support services are provided by the OTE Group so as to ensure efficient management and issue resolution across all enterprise information systems of Coca-Cola HBC. The services offer support to 26,000 Coca-Cola HBC users in 14 languages 24/7 and 365 days a year.

CUSTOMERS & PRODUCTS SUSTAINABLE PRODUCTS AND SERVICES 73 ƒ Diabetes is one of the most widespread diseases in Germany. Together with the partner Emperra, the telehealth platform is cur- rently being used as the basis for developing a therapy-supporting solution for patients with type 2 diabetes. The patient is offered rec- ommended treatments by means of special algorithms that analyze blood glucose readings and the amount of insulin used. Based on a simple traffic light system, patients can better understand the effects of their lifestyle on their illness and thus positively influence the course of their illness on a long-term basis. ƒ Our Telekom Healthcare Cloud (THC) provides health professionals with a reliable and simple path toward the digital transformation of their work structures. One of our customers in this area is Gesund- heit Nordhessen Holding (GNH). We support the group of hospitals by providing our cloud for its daily work. RAPID ENTRY INTO SMART HOME BUSINESS A smart home can make life easier for its occupants in many ways, allowing them to control and monitor various devices remotely – from security systems and home appliances to home electronics. Of course, one big challenge remains, in that a provider’s smart home solution is often not compatible with the functions and devices of other manufac- turers. That is why we have set up the open, vendor-neutral smart home platform QIVICON. This platform gives consumers the option of combin- ing devices from different companies simply and individually. QIVICON: More devices in more countries The Deutsche Telekom national companies in Greece and Austria launched their smart home initiative in 2018 based on our white - label portfolio, which allows companies to develop a smart home - portfolio for their customers. As a result, the QIVICON platform is now available in seven European countries. Customers of T-Mobile Austria can use the Safety, Comfort, and Easy packages to quickly and easily set up a smart home solution that they can configure individually with a variety of com- patible devices from different manufacturers and brands. Cosmote in Greece also offers smart solutions relating to security, comfort, and energy. Using a range of different compatible connected devices, users can likewise control their homes conveniently via an app. We were able to further increase the number of devices that are com- patible with the QIVICON platform during the reporting period. Products by the companies Bosch Siemens Hausgeräte, Bose, Grohe, and Ikea give consumers an even better selection of security and lighting options. Even today they can choose from among several hundred dif- ferent smart home appliances. Security and data protection at QIVICON QIVICON is at the heart of Deutsche Telekom’s smart home system. The home base handles the integration and control of devices from different manufacturers and sets up a secure connection to the Telekom cloud, where the data required for monitoring and controlling the system is stored. In 2018, we commissioned the testing institute AV-TEST GmbH for the fourth time to check how secure the QIVICON Smart Home platform and the Magenta Smart Home app are. Once again, the rating was “very good protection”. Open platform We use our Software Development Kit (SDK) to make the QIVICON platform available for companies. They can use the platform to integrate their devices themselves with ease and develop their own innovative smart home ideas. RESPONSIBLE USE OF AI Artificial intelligence (AI) is a future topic for many. But AI is already reality and so too are questions regarding the responsible use of AI. Even though, or precisely because, the state of artificial intelligence is still in its infancy compared to its expected capabilities, we need to address the ethical issues it raises now. This is the only way we can set the right course for the future. In 2018, under the guidance of the Compliance unit, we therefore adopted guidelines for the ethical use of artificial intelligence. They define how we at Deutsche Telekom should use AI responsibly and how we should develop our AI-based products and services in the future. We do not claim that these guidelines constitute universally valid rules on the responsible use of AI, but instead want to develop them further in dialogue with our employees and external stakeholders. PROTECTING RESOURCES WITH CLOUD COMPUTING With cloud computing, our customers no longer need to be bothered with their own servers and storage media. In most cases, cloud comput- ing is more resource and energy-efficient than running your own infra- structure outside of the cloud. Our data centers require up to 80 percent less energy thanks to more effective capacity utilization and less hard- ware. We are also continuing to work on further improving the efficiency of our data centers. The cloud for the public sector For companies that want to convert their systems to cloud solutions, T-Systems offers a program called The Cloudifier. We analyze the cus- tomer’s IT landscape and identify which applications can be transferred to the cloud. Building on this, we developed the Cloudifier4Public in 2017 – a service with which T-Systems designs and implements cus- tomized cloud strategies for the public sector in Germany. The design is tailored to the objectives and particulars of German public administra- tion. Key aspects are data protection and information security, safe- guarding of statutory tasks and compliance with legal framework condi- tions. Less paper consumption through cloud billing Integrating billing processes into our cloud offering is a next logical step for us. IoT real-time data for billing can thus be obtained directly from the cloud, making it easier, for example, to bill intelligent sensor ser- vices. The idea behind it is that the process is simplified and takes place online through to the bill. “Digital twin” conserves resources The Internet of Things allows companies in the manufacturing industry to make a digital model of a physical product. These digital twins accompany real products as real-time copies from their generation to their disposal, meaning they are constantly updated with the real objects’ status, behavior and performance data. Companies can thus already perform virtual stress tests during product planning, identify

CUSTOMERS & PRODUCTS SUSTAINABLE PRODUCTS AND SERVICES 75 The top can be connected to a smartphone via Bluetooth and controlled by an app. Deutsche Telekom wants to promote ideas at the interface between technology and fashion, which is why we launched the “Fashion Fusion” program in 2016 together with partners. As part of the program, an ideas competition was held for the third time in 2018, aimed at start-ups and young entrepreneurs from the fields of fashion, technology and product design – such as “Project Love” or “Smart Orthosis”. Those tak- ing part in the competition had the opportunity to develop prototypes of their ideas. They were provided with the necessary work materials and could draw on expert knowledge. In 2018, a top-class jury selected three winning teams from eight finalists at the Berlin Fashion Week. CONNECTED T-SHIRTS SAVE FIREFIGHTERS’ LIVES The development program Connected Things Integrator by Deutsche Telekom’s subsidiary T-Systems developed an innovative shirt to protect people in high-risk jobs like firefighting. It tracks the person’s vital signs and also tells the incident commander the location, movements, and recent body orientation of a missing team member. In 2018, the Krefeld Fire Department tested the innovation during a practice operation to experience the opportunities telematics can offer for minimizing the risk in fire-service operations. The shirt is equipped with a “pod” – a telematics unit located right below the nape of the wearer’s neck. Thin, barely perceptible heat- and sweat-resistant wires run through the fabric in random, meandering loops that allowed the shirt to be stretched and washed. They transmit the firefighter’s heart rate as captured by two sensors on the side of the chest. At the same time, a next-generation accelerometer in the pod detects the firefighter’s every movement. An algorithm combines the rotation and translation of the GPS-enabled pod over six different axes. The advanced mathematics allows the device to track the wearer’s location and movements. A memory chip records the raw data in order to instantly recognize any type of adverse event. A fall, for example, could be instantly reported wirelessly to an IoT platform in the cloud. The platform generally communicates with the Incident Commander’s tablet over the Internet, but also manages the pods and pushes out regular updates to them. Firefighters respond to home fires in Germany with some 200,000 oper- ations every year and this innovation can mean a significant improve- ment to the safety of firefighters in life-threatening situations. The Con- nected Things Integrator will continue to work on developing the shirt further in order to incorporate additional helpful information channels. And if the invention can save just one life, it will already have been a resounding success. FAIRPHONE 2 AT T-MOBILE AUSTRIA T-Mobile Austria actively supports Dutch company Fairphone in its efforts to raise awareness of fair electronics and promote responsibility in the industry. In 2018, the company extended its support to Austrian Fairphoners, the first Austrian Fairphone community. It also provided financial aid for the Global 2000 Fairness Run community fund in Vienna and the Südwind Street Festival. The Austrian Fairphoners com- munity aims to connect Fairphone users in Austria and to spread the word about the Fairphone movement. T-Mobile Austria is one of the first mobile network providers in the world and the only provider in Austria to combine a mobile contract with Fair- phone 2, the first sustainable and socially responsible smartphone. The company has been offering this product since early 2016. It gives new and current customers an opportunity to choose a sustainable way of life when it comes to their smartphones. Fairphone focuses on four main challenges: to make mining at the beginning of the value chain, design, production, and the product life cycle more sustainable and transparent. In order to achieve this goal, the company cooperates with initiatives for the extraction of tin and tan- talum from conflict-free mines in the Democratic Republic of Congo and sources conflict-free tungsten from Rwanda. It also created the first pilot supply chain for fair-trade gold in smartphones and promotes longevity through the modular product design of Fairphone 2. Spare parts for Fairphone 2 can also be ordered through T-Mobile Austria so as to facili- tate long-term use of the product. COLLECTION OF USED MOBILE DEVICES IN GERMANY Germany’s recycling and reuse rate for small electronic appliances is too low. Too many used cell phones, smartphones and tablets are stuck in drawers or disposed of illegally with the household waste. But these devices should be refurbished and reused or properly recycled to help us conserve valuable resources. We have been offering different ways for people to hand in their devices since 2003. Customers have been able to return their used, high-end cell phones and smartphones to Tel- ekom Shops under a buyback program since 2013. They receive store credit from the Telekom Shop reflecting their old device’s current value, which they can use to purchase a new device, or they can choose to have the amount booked to their customer account. Business custom- ers can send in their used cell phones and smartphones through a spe- cial buyback portal, which we created in 2016. After the device’s value has been determined, the amount can be paid out or donated to a chari- table organization. Together with company Teqcycle Solutions we also operate the Cell Phone Collection Center online portal. Through this portal, authorities, associations and other organizations have the oppor- tunity to start collection campaigns for donating used cell phones and smartphones. The website provides an overview of these partners and the collection campaigns they conduct. Campaigns took place in Bavaria, Baden-Württemberg, Hesse, Saarland and North Rhine-West- phalia during the reporting period. At the end of the year we donated the proceeds from the devices collected through recycling and reuse to Netzwerk Entwicklungspolitik Saarland e.V. and the Freiburg “Natur und Mensch” (Nature and man) musuem to thus support educational pro- jects. used cell phones and smart- In 2018 we collected exactly 187,028 phones throughout Germany and either reused them or had them prop- erly recycled. During the cell phone collection campaign we use a data erasure process that is DEKRA certified and complies with strict data protection requirements. Defective cell phones or devices where certi- fied data erasure would be too costly are properly recycled using state- of-the-art, environmentally friendly processes at the Telekom Recycling Center. Up to 100percent of the materials can then be reused – as recy- cled metals or for energy generation.

CUSTOMERS & PRODUCTS SUSTAINABLE PRODUCTS AND SERVICES 77 ACCESSIBLE PRODUCTS AND SERVICES Deutsche Telekom wants to make it easier for people with disabilities to have access to the knowledge and information society. Services for the hearing impaired We set up a hotline (Deaf Hotline) for deaf and hearing-impaired cus- tomers in 2003. Up to 50people currently call the hotline every day to get help with connections to their DSL routers, to find out more about special cell phone rate plans or to make an appointment with a techni- cian. The employees of the Deaf Hotline are equipped with live consult- ant workplaces that have HD cameras, among other things. Customers and live consultants can see each other using a video-based live chat application and can communicate with each other in sign language. For deaf customers and members of the German association for the deaf, Deutscher Gehörlosen-Bunde.V., we operate a special online dis- tribution site. There we offer a discounted mobile communications and fixed-line portfolio that is tailored to the exact needs of deaf people. Customers can order their desired plans directly on the website, can contact the employees of the Deaf Hotline or be forwarded to the infor- mation exchange platform Deaf-Café in the Telekom Hilft community. The Deaf-Café provides a safe space to discuss or clarify questions about Telekom offerings together with other deaf people in groups and forums. In addition, all of our fixed-line Entertain products, including on HD stations, have featured subtitles since 2018. They thus give hearing- impaired customers barrier-free access. Since the summer of 2018, hearing-impaired people in Germany have had access to a 24-hour emergency call service with sign language interpreters through the Tess/Telesign interpreter relay service for emergency situations. Accessibility and trouble-free transmission of this service are now possible thanks to sufficient data volumes in the mobile phone contracts and adequate network coverage. Tess/Telesign is jointly financed by the mandatory social security contribution paid by Deutsche Telekom to Germany’s Federal Network Agency. Engagement for hearing impaired people in Slovakia About 1 % of the population in Slovakia is hearing impaired, and Slovak Telekom is very active in developing comprehensive programs and activities to support them in ordinary everyday living situations. We also help families with hearing-impaired children to master their everyday lives. Another aim is to raise public awareness about the challenges they face. As a carrier, we provide significant support for the hearing impaired and offer them an advantageous plan and a mobile data package. In 2018, Telekom updated its special mobile plan for hearing-impaired people that includes unlimited SMS and up to 8GB of mobile data at a price of € 12 per month. In addition, Telekom offers hearing-impaired people a preferential Mobile Internet L Plan with 15 GB of data for € 0.99 per month. This represents a discount of more than 95 percent. Navigation stick for visually impaired people in Czech Republic As a socially responsible company, T-Mobile Czech Republic aims to support visually impaired people. We have been cooperating with the Czech Technical University to develop a unique navigation solution for the blind. Connecting global navigation satellite systems (GNSS) and wireless data transfer networks has created one of the most advanced orientation solutions for visually impaired people. T-Mobile Czech Republic has supported the development of this navigation solution by providing connectivity in 3G and 4G, data SIM cards and modems. The newly developed navigation stick for blind people is connected to the navigation center. Based on a 2G-4G app, the service enables naviga- tion data, voice communication, and images to be transferred. Formerly, the stick was connected to the smart phone but now the communica- tion interface, camera and mobile phone are installed directly in the stick. Camera is utilized for orientation in buildings where GNSS does not work. A testing phase was completed in 2017 and pilot operation was running in 2018. After a redesign and various improvements, a pro- totype of a new-generation stick has been completed. The final product has to be certified by the Ministry of Labour and Social Affairs as a spe- cial aid tool in order to offer it to the visually impaired people for free. The production should be launched in Q3 this year. The supplier will be Svarovsky Ltd., the largest manufacturer of sticks for visually impaired people in the EU. SUPPORTING START-UPS: CREATING SPACE FOR IDEAS hubraum is the leading Deutsche Telekom start-up program. Its mission is to connect external start-ups with relevant business units at our Group in order to jointly develop innovative products for our consumer and business customers. To that end, hubraum offers entrepreneurs seed funding from a separate investment fund and targeted innovation pro- grams with a view to strategic growth fields and technologies of Deutsche Telekom. Since the establishment of hubraum in 2012, we have built up a strate- gic investment portfolio of more than 25 companies and worked with an additional approx. 300 start-ups in Europe and Israel – in areas such as Realtime Gigabit Society (e.g., 5G and Edge Cloud), Smart Data Econ- omy (e.g., AI and process automation) and Internet of Things (e.g., Nar- rowband IoT and Industry 4.0). The hubraum campus at the Berlin location has one of the first 5G net- works in Europe and is equipped with an edge cloud infrastructure. In addition to an office space for teamwork and mentoring, start-ups there have exclusive access to networks, product platforms and test data from our Group and can thus accelerate setting up their business. In 2018, 30 projects were implemented in the hubraum Edge and 5G prototyp- ing programs. These will be continued in 2019. During the same period, 36 projects were carried out in the IoT innova- tion program – with solutions for NB IoT or LTE M networks and our Group’s Industrial IoT portfolio. Examples of start-ups that took part in our LTE M program: ƒ The Slovenian start-up Trapview offers a solution for agriculture: Sensors determine if and to what extent plants have been infested with pests. This enables accurate coordination of the use of pesti- cides to match actual need and reduces any resulting adverse impact on the environment.

CUSTOMERS & PRODUCTS SERVICE QUALITY 79 SERVICE QUALITY As a service-oriented and socially responsible company, our approach also involves taking the needs and feedback of our customers into con- sideration. That’s why we have set up a comprehensive customer rela- tionship management system. We encourage dialogue with our custom- ers by giving them opportunities to quickly and easily contact us, for example, online, via app, phone or e-mail or at a Telekom Shop. OBJECTIVES MEASURES MEASURING SUCCESS § Perfect service for our custo- mers and a high degree of customer satisfaction § New service orientation: more reliable, more direct, simpler and more personal § TRI*M method § Telekom Digital Share § Expansion and improvement of § Technical service and customer digital service offerings service from one source § Involving customers in desig- ning the service § More transparency and flexibi- lity through additional digital service options ENSURING EXCELLENT SERVICE QUALITY We want to offer impeccable service that satisfies all of our customers. To achieve this objective, we bundled the Deutsche Telekom service units – with the exception of the Telekom shops – under one roof back in 2017. This enables optimal coordination and alignment of the service processes from beginning to end from the customer’s viewpoint – from the initial contact with the hotline to problem resolution. This has allowed us to already reduce the number of complaints by almost 50 percent. Our landline and mobile customers can reach us around the clock in Germany using our service numbers, including for internet and TV issues. Our online channels are becoming more and more important: our homepage, the “Telekom hilft” community in social networks and our app. More than 40 percent of all service inquiries at Telekom Deutschland are solved by support provided by our overarching online platforms (as of the end of 2018). We expanded our digital offering with new functionalities in 2018: For example, customers can arrange the relocation of a line using an app or track the arrival of a Deutsche Telekom technician. In addition, we simplified hotline authentication for customers. “Telekom hilft” – Europe’s largest community Our customers can also reach us on social networks. Our digital service platform “Telekom hilft” now has more than one million registered users, making it Europe’s largest telecommunications community. Consumers and business customers can help each other on the www.telekom.de/community web portal as well as on Twitter and Face- book or seek advice and support from one of the around 120 service employees. Measuring customer loyalty and willingness to recommend our products and services to others We use the TRI*M index to precisely gauge customer loyalty and regularly participate in benchmarkings. The basis for the census is a customer survey in all markets where we are active. The benefit for the Deutsche Telekom Group consists in data aggregation across all coun- try values (excluding the U.S.). The index itself is calculated from four individual issues (competitive edge, performance, continued use and recommendation). The Group-wide TRI*M index was 67.7 points in the 2018 reporting year, representing a slight increase over the 2018 benchmark figure of 67.2 and thus allowing us to achieve our Group target. The TRI*M index for Germany was 59 points, compared to the previous year’s 59 points. That means we didn’t attain our goal of a slight increase. One of the reasons for this is that our service provision for business customers was deemed to be capable of improvement. Our target for 2019 is to achieve a further improvement for the Group as a whole and to increase the TRI*M index by one point for the Germany segment. The results for our customers’ satisfaction and loyalty are in part tied to our managers’ variable salary components and thus play a role in their performance assessments. NEW SERVICE ORIENTATION: DOING EVEN MORE TO MEET OUR CUSTOMERS’ NEEDS. Customers help shape service Our customers should be given the opportunity to help actively shape Deutsche Telekom’s products and services. It was with this in mind that we launched the Telekom Ideenschmiede (think tank)online platform in 2018. Ideas for improving our offerings are now shared here by more than 4,600 registered users. Community members present their ideas, rate suggestions from other community members, or express their opin- ions on suggestions and questions from Deutsche Telekom. In addition, online surveys are conducted and personal meetings arranged with members. Based on the feedback received from the think tank, we have already started to make Deutsche Telekom bills simpler and more customer friendly, for example. Innovative callback services shorten wait times Our innovative callback services allow us to avoid unnecessary wait times. If the customer does not want to stay on the line for the announced wait time, they can request a callback to a number of their choice by means of a voice prompt. Many customers would also like to speak to the same contact again and not to have to explain their query repeatedly. Thanks to our personal callback service, this can be done really easily within 48 hours, both from a fixed-network or mobile phone. And to also reduce the time the customer has to wait for the technician, we aim to also reduce the time frame for appointments with technicians.

CUSTOMERS & PRODUCTS SERVICE QUALITY 81 2018 CHIP hotline test for fixed-line and mobile telecommunications In collaboration with Statista, one of the largest market research companies, CHIP completed a major hotline test in 2018. Over an eight-week time frame, the hotlines for new customers of a total of 141 companies from 12 industries were tested. More than 8,600 tests were carried out and subsequently summarized in rankings. The testing focused particularly on the topics of customer service, availabil- ity, wait time, and transparency. Deutsche Telekom was rated as “very good” overall in the “Mobile Communications” category for its hotline and was the test winner in the Customer Service category. In the “Fixed Network” category, the hotline was also rated as “very good” in the over- all assessment. Connect 2018 “Broadband Hotline Test” The magazine Connect carries out an annual review of the broadband/fixed-network hotlines of the various providers. The current test confirms that Deutsche Telekom offers the best fixed-network infrastructure and the best hotline. Aspects such as accessibility, wait time, costs, friendli- ness of employees, and the quality of information were assessed. Connect 2018 “Best Service App” The trade journal Connect asked which was the “Best Service App” in the telecommunications sector this year. The service apps of network operators Deutsche Telekom, O2, and Vodafone were tested. Deutsche Telekom’s MagentaSER- VICE app was the test winner with a rating of “exceptional”. Honored with the International Business Excellence Award 2018 Deutsche Telekom once again won the “International Business Excel- lence Award” in 2018 in the categories “Customer Experience and Voice of the Customer” and “Telecommunications and Information” for its Voice of the Customer program, an international customer contact analysis. The program collects customer feedback across all contact channels. More than five million feedback responses are collected this way every year and used to optimize customer service. The system is already in use in twelve European countries. T-Mobile Austria wins “International Customer Experience Award” T-Mobile Austria received two distinctions for its messaging service at the ceremony to mark the 2018 International Customer Experience Awards. The T-Mobile service won the coveted award in the categories “Contact Center” and “Best Digital Strategy”. The messaging function offers customers a location-independent service that is not tied to open- ing hours. Service advisers therefore have time for longer investigations, which in turn allows the customer to remain in contact with a single con- tact until the case is resolved.

CUSTOMERS & PRODUCTS CONSUMER PROTECTION AND DATA SECURITY Consumer and youth protection 83 CONSUMER AND YOUTH PROTECTION We stand for the highest possible standards when it comes to consumer and youth protection. We want to teach children and young people in particular how to use digital media safely and effectively and protect them from inappropriate content, which is why we work throughout the Group to improve their media skills in a variety of projects. We also work with a variety of initiatives and partners to create a child-friendly inter- net. We have reinforced our stance with numerous national and interna- tional voluntary commitments and internal codes of conduct. In doing so, we often exceed the standards required by national regulations. Our products and services have always provided a high degree of data privacy and data security. Growing volumes of data require special pre- cautions to protect the privacy of citizens, which is why we approved eight mandatory principles for handling big data, or large amounts of personal data, in 2013. In 2015, we also approved specific measures to protect data and infrastructure in our “Ten-point program for increased cyber security.” We also developed new protective products including our Mobile Encryption app designed to ensure end-to-end encryption of mobile communication. OBJECTIVES MEASURES MEASURING SUCCESS § Best possible protection of § Developing data privacy § Online reporting about data users and minors products § Binding Corporate Rules on Privacy § Promoting media skills § Partnerships and alliances protection measures and activities PROTECTING CONSUMERS AND MINORS Data privacy and data security are very important to us. In 2008 we cre- ated a Board of Management department for Data Privacy, Legal Affairs and Compliance as well as the Group Privacy unit. Since 2009, the Board of Management has been advised by an independent Data Pri- vacy Advisory Council comprising reputable experts from politics, sci- ence, business, and independent organizations. In addition, we were the first DAX company to have our data privacy organization reviewed and certified according to the IDWPS980 standard in September 2014. At Deutsche Telekom, data protection and data security are subject to the Group’s Binding Corporate Rules on Privacy and the Group Policy on General Security. The Binding Corporate Rules on Privacy govern the handling of personal data. The related document Binding Interpreta- tions contains specific recommendations and best practice examples for implementing the EU General Data Protection Regulation, which was enacted in May 2018. The Group Policy on General Security includes significant security-related principles followed within the Group. Both guidelines set forth binding standards that are in line with international standard ISO 27001. These policies allow us to guarantee an ade- quately high and consistent level of security and data privacy through- out the Group. Deutsche Telekom has been publishing an annual trans- parency report for Germany since 2014, which covers the types and amount of information we disclose to security agencies. In doing so, we are fulfilling our statutory duty as a telecommunications company. We also provide up-to-date and transparent information about all of our activities and measures regarding data protection and data security on our Group website. Data privacy and security also play a key role in the development of our other products and services. Our Privacy and Security Assessment (PSA) procedure allows us to review the security of our systems in each step of the development process. This procedure applies to newly developed systems as well as existing systems that undergo changes in technology or in the way data is processed. We use a standardized pro- cedure to document the data privacy and data security status of our products throughout their entire life cycle. Youth protection aspects are also taken into consideration in our product and service design. In Ger- many we involve our youth protection officer in all issues regarding plan- ning and designing offers for young people. The youth protection officer can then recommend restrictions or changes. We have appointed a Child Safety Officer (CSO) at each of our national companies within the EU who is responsible for issues pertaining to the protection of minors. The CSO acts as a central contact for members of the community in the respective market. The CSO also plays a key internal role in coordinat- ing topics related to the protection of minors. These measures increase the consistency and transparency of Deutsche Telekom’s involvement in protecting minors. Strategic approach to protecting minors from unsuitable media con- tentOur strategy to protect children and young people from harm when using digital media is based on three pillars: ƒ We provide attractive, age-appropriate offers for children and give parents and guardians tools (filters) that they can use to restrict the access minors have to harmful content, ƒ we participate in combating child abuse and its depiction to the extent that this is permitted within the national legal framework, and ƒ we promote skills to help people use the internet safely. We also collaborate closely with prosecuting authorities and NGOs as well as other partners from business, politics, and society to ban online content that is harmful to children and young people. We have docu- mented our commitment to protecting minors from unsuitable media content in Germany in relevant codes and introduced minimum stand-

CUSTOMERS & PRODUCTS CONSUMER PROTECTION AND DATA SECURITY Consumer and youth protection 85 ƒ Information on cyber criminals, malware and phishing is distributed over thousands of websites on the internet. The www.sicherdigital. de website brings this information together, providing users with easy access to security issues. Young people, adults and businesses can find useful information and specific tips concerning security and data protection. ƒ The “Confidential” issue of our We Care magazine talks about how dangerous hacker attacks can be and how users can protect them- selves. In the issue Inkognito we discuss how to protect one’s pri- vacy without becoming a digital outsider. ƒ Users can track cyber attacks on our website in real time using our security dashboard. We show the countries where the cyber attacks are coming from on a map. For more information on this, go to www. sicherheitstacho.eu. ƒ Our Netzgeschichten (Network Stories) also discuss issues regard- ing protection of minors and consumers. You can watch all of our videos on YouTube: https://www.youtube.com/user/ deutschetelekom EU GENERAL DATA PROTECTION REGULATION (GDPR) BECAME BINDING Laws have to be interpreted in order to be enforced in everyday situa- tions. Group Privacy has drawn up a set of standardized rules for the Group as a whole; they are called Binding Interpretations. They were developed in collaboration with data privacy experts in the national companies. The Binding Interpretations include recommendations and best practice examples to implement the EU regulation. For example, they explain what a customer consent must entail, or how customer data has to be deleted, if this is requested by the customer. From Janu- ary 2017 to May25, 2018, the new requirements based on the Binding Interpretations were introduced throughout the Group. This involved checking and, where necessary, adjusting all the IT systems. All employ- ees have been informed about the GDPR and numerous training ses- sions have been conducted. Once implementation was complete, the monitoring phase began. Affected entities of the Group were asked whether they had implemented all relevant requirements. In addition, spot checks for compliance with the GDPR were carried out at 28 enti- ties. They confirmed that the requirements had been implemented. Our collaboration in the AUDITOR project is also representative of how we are dealing with the new legal conditions. The goal of the project is to develop and test EU-wide data protection certification of cloud ser- vices. In particular, its focus is on translating specifications of the GDPR into international data protection certifications. COLLABORATION FOR THE PROTECTION OF MINORS We want to create a safe and positive online experience for children and young people. We offer them attractive, exciting content on age- appropriate websites. Promotion of standardized child protection offers In 2016, we joined the non-profit organization JusProge.V. The organiza- tion operates the child protection program JusProg. The software pro- tects children and young people on the internet by blocking content through filter lists or customized settings for parents. This software is a general child protection program in Germany that has been officially recognized by Freiwillige Selbstkontrolle Multimedia- Diensteanbieter e.V. (FSM, the Association for the Voluntary Self-Moni- toring for Multimedia Service Providers) pursuant to statutory require- ments (Interstate Treaty on the Protection of Human Dignity and the Pro- tection of Minors in Broadcasting and in Telemedia). The software was most recently evaluated in March 2017. We decided in 2016 to donate the rights to the program code behind our child protection software (Windows) and our child protection app, Surfgarten, (iPhone/iPad) to JusProg e.V. in order to expand our involve- ment in child protection efforts. Commitment to FSM We are a founding member and part of the executive board of FSM, the Association for the Voluntary Self-Monitoring for Multimedia Service Providers. The association published the “Index for Youth Media Protec- tion” for the first time in 2017. It indicates the extent to which the protec- tion of young people from negative experiences online is anchored in the concerns, attitudes, knowledge and actions of parents, learning specialists and teachers, and young people themselves. It provides the basis for recognizing strengths and weaknesses in today’s media regu- lations for youth media protection and the available support measures for media education, which provide starting points for their continued development. The 2018 youth media protection report specifically addressed teachers and educational specialists. Teachtoday in the Aktionsbund Digitale Sicherheit (Digital Security Action Alliance) In addition to these solutions, we also promote safe and responsible media use among children and young people with our Teachtoday initi- ative. The initiative supports children and their families with practical and everyday tips and materials. FIGHTING CHILD PORNOGRAPHY We consider it our obligation to take rigorous action against depictions of child abuse on the internet. We have been involved in an EU-wide fight against the depiction of child abuse since 2007 in the European Framework for Safer Mobile Use by Younger Teenagers and Children. Since 2008 we have been committed to combating the spread of such content together with other mobile providers in a global association. Since 2013 we have been actively participating in two cross-industry coalitions committed to fighting child abuse on the internet, the “CEO Coalition to make the internet a better place for kids” and the “ICT Coalition for Children Online.” For more than 20 years, we have been active as a founding member in the FSM, the Association for the Voluntary Self-Monitoring for Multime- dia Service Providers. Together with eco, the Association of the Internet Industry, it operates theinternet-beschwerdestelle.de, a website for reporting child abuse on the internet. It is the German point of contact for internet users to submit complaints and part of INHOPE, the global umbrella association of internet hotlines for complaints. A particular focus of the hotline is the fight against “gray areas”.

CUSTOMERS & PRODUCTS CONSUMER PROTECTION AND DATA SECURITY Cyber security 87 CYBER SECURITY Criminal hackers are getting more and more professional by the day. Private individuals as well as public organizations or companies are all at risk. Weaknesses in computer systems are often taken advantage of within hours, with attacks being run fully automatically. As a responsible ICT provider, we are fighting this trend. Our business model includes guaranteeing our customers a high degree of security and effectively protecting the data and infrastructure of the people and companies who use our services from unauthorized access. The measures that we undertake to fight cyber attacks on our own infra- structure are also available to other companies. More than 30 German DAX companies and SMEs employ our services for their own protection. New dangers require new solutions Technological innovations can bring new dangers. That is why we develop targeted measures for combating potential new security risks – such as those associated with drones, for example. We developed the Magenta Drone Shield together with our partner Dedrone. OBJECTIVES MEASURES MEASURING SUCCESS § Maximum protection of our inf- § Establish a cyber defense and § Web portal: Data privacy and rastructure from attacks security operation center data security § Guaranteeing data security § Analyzing attacks § Web portal: Telekom Security § Developing defense strategies § Entering into collaborations PROTECTING OURSELVES AND OUR CUSTOMERS In line with our Group strategy, we promote our business with security products and services throughout Europe. In 2016 we united all secu- rity-related departments Group-wide under one roof, thereby expanding our abilities to detect cyber attacks early on and also to quickly intro- duce countermeasures. Our Telekom Security unit focuses on internal security issues and develops security solutions for consumers as well as business customers. This approach enables us to provide our custom- ers even more efficiently with the perfect security solutions along the entire value chain, from product development to applications through to secure, high-performance networks and high-security data centers. We are always working to develop new ways to defend against attacks. We launched a Cyber Emergency Response Team (CERT) in the mid- 1990s, which is responsible internationally for managing security inci- dents for our information and network technologies. Since then, we have continued to expand our activities in relation to cyber defense, information on attacks, and information sharing. In 2017, we opened a new Cyber Defense Center with integrated Security Operation Center (SOC) in Bonn. There we analyze behavioral patterns on the internet and draw up defense strategies. This new defense center is one of the largest and most advanced ones of its kind in Europe, analyzing 2.5 bil- lion pieces of security-relevant data from 3,300 data sources every day. What’s more, the cyber defense center processes about 200 requests, filters about 5,000 viruses and malware programs, and scans about 100 million incoming emails for spam every day. This is how we protect our infrastructure, and hence also our customers’ data. Some 200 security experts work round the clock at the new SOC in Bonn and its affiliated national and international locations. Collaborating in the name of security Cyber security is a communal task. In order to further improve collabora- tion in the area of digital defense, we regularly host the Cyber Security Summit in collaboration with the Munich Security Conference. The last summit was held in May 2018. We also organized the Magenta Security Congress in 2018 for the third time. In addition, we collaborate with research institutes, industry partners, initiatives, standardization committees, public institutions, and other internet service providers on a global scale. Together, we want to fight cybercrime and improve online security. We collaborate, for example, with the German Federal Office for Information Security (BSI) through- out Germany and with the European Union Agency for Network and Information Security (ENISA) at a European level. We also provide up-to-date information about all of our data protection activities on our Group website under data protection and data security. CYBER SECURITY SUMMIT Together with the Munich Security Conference, we organized the Cyber Security Summit (CSS) in May 2018 for the sixth time. The venue for this year’s event was Tallinn. About 150 high-ranking international politi- cians, top managers, and scientists met at the conference to discuss the biggest cyber security challenges. Key topics included critical infra- structures as a target of hacker attacks, strategies to combat terrorist use of the internet and the impact of artificial intelligence or the Internet of Things (IoT) on the future of international conflicts. The summit also discussed which new rules are needed in the digital age. CEO Timo- theus Höttges called for an early warning and coordination system based on the model of the World Health Organization (WHO), which deals with and combats the dangers in virtual space like epidemics.

CUSTOMERS & PRODUCTS CONSUMER PROTECTION AND DATA SECURITY Mobile communications and health (EMF) 89 MOBILE COMMUNICATIONS AND HEALTH (EMF) Electromagnetic fields (EMFs) are a prevalent element in our connected world, even if we are not able to perceive them directly. Their effects on our health remain a topic of discussion. It is very important to make sure that the EMFs employed do not present a problem for people or the environment when we use them in mobile communications. The effects of electromagnetic fields have been thoroughly researched over past decades in numerous scientific studies. The World Health Organization (WHO) analyzes the findings of scientific research and recently made a statement regarding the results in October2014. In its statement the World Health Organization concludes that the current threshold values for electromagnetic fields ensure that mobile commu- nications technology can be used safely but that further research is required. Deutsche Telekom has made a commitment to actively address scien- tific research on mobile communications and health. We provide detailed information on the Group website on the latest technology and scientific risk assessments published by expert committees. To this end, we published a brochure titled “Fakten zu Mobilfunk und Gesundheit” (“Facts about mobile communications and health”) and last revised it in 2017. The document is available on our Group website. OBJECTIVES MEASURES MEASURING SUCCESS § Protect people’s health § EMF Policy § Evaluating the EMF Policy § Voluntary commitment STRIVING FOR SECURE MOBILE COMMUNICATIONS We want to make our mobile communications infrastructure and our new products, as well as the processes on which they are based, as resource-efficient, secure and safe for health as possible. In Germany these activities are based in particular on voluntary commitments by mobile communications providers and an agreement with local authori- ties’ associations. Compliance with these voluntary commitments is reviewed every two years by external experts. In 2018 we once again submitted a current annual mobile communications expert report, co- ordinated by Deutsches Institut für Urbanistik (German Institute for Urban Studies), to the German Federal Government. According to the report, mobile communications expansion is progressing for the most part free of conflict. 9 5percent of the municipalities surveyed said that they had had little or no controversial decision-making cases. The report was published by the German Federal Environment Ministry. What’s more, in collaboration with Telefónica, we also support the information portal www.informationszentrum-mobilfunk.de. Our Group-wide EMF Policy, which we adopted in 2004, plays a pivotal role. The policy specifies standardized minimum requirements in the area of mobile communications and health, requirements that by far exceed those set forth by national laws. Our policy provides our national companies with a mandatory framework that makes sure that the topic of mobile communications and health is addressed in a consistent, responsible way throughout the Group. All of our national companies have officially accepted the EMF Policy and implemented most of the required measures. Our EMF Policy stipulates the following principles and measures: Transparency We place importance on discussing issues involved in mobile communi- cations openly. We make all relevant information regarding our mobile communications equipment in Germany accessible to the public, e.g., on the EMF database operated by the German Federal Network Agency. Information We provide consumer information that is easy to understand and pur- sue a fact-based, sound information policy. On our Group website we provide the latest information to those interested. We also provide our customers with information on the SAR levels of their devices. In addi- tion, customers can get information on SAR levels at many of our shops, via our free environmental hotline or via e-mail. Participation We rely on close collaboration and constructive dialog with all those involved, including communities, when it comes to network expansion. Our goal is to find amicable solutions and negotiate acceptable com- promises, which can only be achieved by responding fairly to critical arguments and being ready to learn from mistakes. Promoting science & partnerships Our guidelines call for promoting targeted research, scientific excel- lence, transparency, objectivity and intelligibility. We conduct ongoing reviews of compliance with our EMF Policy. The findings are used to improve individual aspects and develop solutions in different working groups such as our EMF Core Team and the EMF Technical Working Group.

91 SOCIETY SOCIETY We want to give as many people as possible the opportunity to partici- pate equally in the knowledge and information society. To this end, we are involved in social concerns with our own initiatives and programs and support charitable organizations. In addition, we are committed to integrating refugees into the job market, and encourage the volunteer efforts of our employees.

SOCIETY A RELIABLE PARTNER IN THE DIGITAL WORLD 93 ƒ We support the Digitale Nachbarschaft (Digital Neighborhood) pro- ject, which trains people to be volunteer IT ambassadors. ƒ We are also involved in the Digital-Kompass (Digital Compass) pro- ject, which offers volunteers a platform to help seniors navigate the internet. ƒ In partnership with Bundesarbeitsgemeinschaft der Senioren- Organisationen (BAGSO, German Association of Senior Citizens’ Organizations), we promote media literacy among older people and also support the Goldener Internetpreis (Golden Internet Award) for competent internet users age 60 and up. ƒ Along with four other foundations, the Deutsche Telekom Stiftung fosters the education and digitalization forum Forum Bildung Digital- isierung that aims to improve education and equal opportunities using digital media. ƒ The Deutsche Telekom Stiftung carries out numerous initiatives and projects that cover the full range of institutional education and utilize countless activities and programs to boost achievement in STEM img subjects (science, technology, engineering, and mathematics). If the digitalization process is to succeed, it is vital that people have faith in the confidentiality of their personal data. Data protection and data security are top priorities for us. However, handling personal data with due care and attention is also an important element. We promote this approach through our online advice portal sicherdigital.de and a focus topic in our sustainability magazine “We Care”, for example. The ques- tion of whether and how information and news on the internet can be identified as “true” is also vital to ask. In 2018, we launched our new landing page “Media sure! But secure.” This supports a responsible and critical approach to media and improves people’s participation in the digital world. Supporting implementation With our expertise, we support projects and initiatives that offer digital solutions for social challenges: ƒ As part of our Corporate Volunteering activities, our staff are involved in the eStart program run by the organization Volunteer Vision. They use a video platform to help refugees learn German. ƒ We are making a contribution to dementia research through the virtual reality game “Sea Hero Quest VR”. ƒ We are supporting external initiatives, for instance through our membership of the association Deutschland sicher im Netz e.V. (DSiN – Making Germany Safe on the Net), which serves as a central point of contact for IT security and data protection issues. We are also working to further improve access to modern information technology. Within the scope of the Telekom@School initiative, we offer free broadband access to schools throughout Germany. This gives children and young people the opportunity to learn how to use digital media irrespective of their family background. We also offer special rates to enable low-income customers and people with disabilities to make phone calls and surf the web at reasonable prices. More than one million customers in Germany take advantage of these special plans each year. Strengthening skills Teachtoday is part of our engagement “Media sure! But secure.” and focuses on promoting safe, competent use of media by children, young people and parents as well as teachers by offering hands-on tips and materials. One example is the free children’s magazine “Scroller”. The initiative uses this magazine to encourage children to think about how they use media and play a part in shaping the digital world. Our commitment also encompasses the following: ƒ We have been staging “Code+Design Camps” since summer 2018. Young people attending these camps – who may or may not have any prior experience with programming – get to know new technolo- gies and develop their skills under the guidance of professional mentors.

SOCIETY A RELIABLE PARTNER IN THE DIGITAL WORLD Creating awareness 95 the other partners, drafting preliminary principles and cornerstones for responsible commercial behavior in the digital world. The first step taken by the members of the initiative was to agree a common under- standing of “responsibility” in this context. This included tightening the basic terminology used with regard to Corporate Digital Responsibility, drafting initial common guiding principles, identifying specific fields of action, and agreeing the next steps forward. The initiative is due to be broadened to admit other interested parties in the future. In addition to this, we have also been involved in other dialog and stakeholder forums addressing digital responsibility, such as the Charter of Digital Network- ing and an event run by the Bertelsmann Stiftung foundation entitled “Corporate responsibility in the digital era”, not to mention our own expert groups. SAFETY FIRST – OUR COMMITMENT TO SECURE HANDLING OF DATA Deutsche Telekom works continuously on providing even clearer and more transparent information on data protection for internet users, and on raising their awareness of the need to handle data securely. The sicherdigital.de advice portal, for example, provides information on online risks and protective measures. Our Teachtoday initiativeand our commitment to “Deutschland sicher im Netz (Making Germany safe on the Net)” also help foster more secure and competent media usage. We also explain how internet users can maintain an overview and con- trol over their own data in the section on “Responsibility” on our Group website and in a specially developed self-learning module about this topic on the new 1001 TRUTHS platform. There are also freely accessi- ble workshop concepts that disseminators can use to address this sub- ject in schools or seminars, for example. We are using these measures to boost media users’ digital self-determination. We also ensure the maximum possible data protection and security with regard to our own products and services. We protect our infrastructure, and with that our customers, with state-of-the-art cyber defense meas- ures. To ensure binding high standards throughout our Group, we have also installed a series of our own rules and guiding principles. Further- more, we regularly have our activities audited and certified to recog- nized standards.

SOCIETY A RELIABLE PARTNER IN THE DIGITAL WORLD Honing skills 97 COSMOTE Scholarship Program COSMOTE ran its Scholarship Program for the 17th consecutive year. The program provides 36 scholarships for first-year students facing financial and social difficulties with a total value of € 650,000. Along- side financial support, COSMOTE offered the scholars fixed and mobile products and services free of charge to cover their telecommunication needs for the duration of their studies along with cable TV services. Over a period of 17 years, the program has provided a total of 658 scholarships valued at more than € 5.5 million. SAFER INTERNET & COSMOTE FAMILY IN GREECE In 2018, COSMOTE Family was launched: A series of services, activa- tions, and tools had been designed to help families enter the digital world with safety. The proposition was based on three dimensions: educate parents, join forces with recognized bodies, and launch new services. Parent education included the e-parenting.gr portal, where parents can navigate through articles, e-learning courses, and inter- views. This was all reinforced by collaboration with organizations, such as the Hellenic Safer Internet Center run by the Foundation for Research and Technology (FORTH) and the Hellenic Society for the Study of Inter- net Addiction Disorder. Finally, the services launched were mobile fam- ily rate plans, with data limits for appropriate child use and an advanced parental control application for safe navigation of children on the Inter- net and social media.´ GETTING A HEAD START WITH DIGITAL TECHNOLOGIES – OUR SCROLLER MAGAZINE FOR CHILDREN The Teachtoday initiative’s media magazine Scroller was published twice in 2018. Aimed at children aged nine to twelve, it features exciting stories and interviews revealing what using media safely and proficiently is all about. Handy tips help readers get to grips with the world of digital media. Do-it-yourself elements, games and puzzles encourage children to actively question how they can use media safely. The magazine also provides information for parents and teachers in special supplements. Scroller is available online or as a free printed version that has a circula- tion of 20,000 and 18,000 subscribers. The scroller.de portal is availa- ble in German and English. The first edition “Mobile ready” was reprinted in 2018 and put out in T-Shops. schools, associations for young people, parents, children and young people make the internet a safer place. The awards recognized exem- plary projects by organizations, teachers and schoolchildren that work towards the same aim. DeutscheTelekom’s Teachtoday initiative came second place in the “Organizations” category. CODING WORKSHOPS FOR KIDS IN POLAND Coding is a serious matter for many people and it is associated with complex and painstaking work to save hundreds and perhaps thou- sands of lines of code. However, programming language is no different from the language we use every day as far as IT specialists are con- cerned. That’s why thousands of volunteers encourage ordinary citizens to learn about coding in the EU Code Week and help them to under- stand the principles of programming. For the second year in a row, together with the CoderDojo Foundation, T-Mobile Polska has been promoting coding projects throughout the year 2018. During the summer holidays, the children of the company’s employees had a chance to participate in a day camp, where they learned to program in Scratch and built robots. T-Mobile Polska also holds coding classes every week at the company facilities in Warsaw. There are also classes in Łódź and 15 other cities. These classes are open for everybody who would like to get familiar with the world of coding. These activities culminated in SuperDojo 2018, organized by T-Mobile and the CoderDojo Poland Foundation. It took place on 20 October at the T-Mobile headquarters at ul. Marynarska 12 in Warsaw and was attended by about 350 people. Clubs from all over Poland and the most interesting finalists of the T-Mobile Cool Grants competition all held presentations, lectures and workshops. Super Dojo is a part of The EU Code Week which is a grassroots initia- tive set up six years ago by the Young Advisors’ Group working with the European Commission. Clubs from all over Poland held free and open workshops for children and young people. An important element of the initiative is to engage participants from a variety of sectors, such as teachers, engineers, the business world, non-governmental organiza- tions, schools, etc. in their actions. FOSTERING EDUCATION AND DIGITALIZATION IN GREECE Access to the Digital World Program Because "digital skills do not go with age…", COSMOTE has been con- tributing to the development of technological skills among older people with the "Access to the Digital World" Program. The program has been running since 2012 and aims to promote lifelong learning, improve quality of life, and contribute to the development of technological skills among people with an average age of 64 years. Over the past 5 years, more than 7,000 people have participated in the program. In 2018, a total of five educational centers operated in Athens and Thessaloniki. All the participants learned how to use the tablet, navigate the Internet, enter the "world" of social media, and use applications to make their everyday lives easier (notes, calendar, notifications, webcam, maps, etc.).

SOCIETY A RELIABLE PARTNER IN THE DIGITAL WORLD Honing skills 99 Forum Bildung Digitalisierung (Digitalization education forum) Together with six other German foundations, the Deutsche Telekom Stiftung lends its support to the Forum Bildung Digitalisierung (“Digitali- zation education forum”). The aim is to enhance the education system and promote equal opportunities and participation using digital media. The three core topics are “personalized learning”, “developing skills”, and “shaping change”. When it comes to personalized learning, digital media can be used to give different target groups access to different learning approaches, including people with disabilities, particularly tal- ented people and refugees. The goal of the second core topic is to con- vey the media skills necessary for living an independent life. “Shaping change” focuses on developing an educational concept for using digital media at educational institutions and within the education system. The “schulentwicklung.digital” workshop focuses on changing the school and learning culture through the use of digital media. In the 2018/19 school year, 25 schools that are already successfully incorporating digi- tal media into lessons have been invited to attend this workshop. “Inquisitive minds” day-care center competition“ Inquisitive minds” is a nationwide day-care center competition in Germany initiated by the Deutsche Telekom Stiftung and the Little Scientists’ House foundation. The competition picks out and presents awards to outstanding projects that spark young children’s interest in science, technology, engineering and mathematics. Its founders aim to show their appreciation for the dedicated efforts of day-care center staff and encourage them to continue their excellent work in the field of early learning. The 16 state champions, who received their awards in June 2018 in Berlin, were each given 2,000 euros. On top of that, each of the five national champions also received 3,000 euros to support educa- tional work in their day-care center. Special awards of 2,000 euros were also handed out, with the total prize money amounting to 80,000 euros. The Future of STEM Learning Since 2018, the Deutsche Telekom Stiftung foundation has supported the initiative “The Future of STEM Learning”, developing and testing concepts for high-quality STEM lessons in the digital world and integrat- ing them into teacher training programs in collaboration with five Ger- man universities. In their development work, the universities receive support from experts based in Germany, Estonia, the Netherlands and Austria – including media educationalists, teaching and learning researchers, STEM pedagogy specialists, and school teachers. In total, the Deutsche Telekom Stiftung has invested 1.6 million euros in this project. Vocational schools going digital What must vocational schools teach young people to equip them for their professional and personal lives in a digitalized world? Since 2018, the Deutsche Telekom Stiftung has been cooperating with ten German vocational schools to determine which inter-professional and occupa- tion-specific digital skills vocational school students need to learn – and which conditions need to be established in such schools to incorporate digital media into their lessons and everyday routine in a beneficial way. Findings are made available to other schools. Researchers from the Institute for Information Management at the University of Bremen super- vise the project. Four workshop meetings open to all participants are scheduled by the end of 2019; the first was held on June 4 to 5, 2018 in Bonn, Germany. In return for their dedicated efforts, the schools receive approximately 20,000euros in funding, opportunities to share ideas with experts and development support throughout the project. The STEM reading mentors In collaboration with the German Reading Foundation, the Deutsche Telekom Stiftung looks for volunteer reading mentors to get children between the ages of 3 to 10 excited about STEM content. By the end of 2018, around 1,600reading mentors had signed up for the initiative. The reading mentors receive training in both classroom and online for- mats. They are then able to work with children at day-care centers and elementary schools. At the end of 2018, the Deutsche Telekom Stiftung and the German Reading Foundation were able to offer around 135media and action tips in ten languages. In the reporting year, STEM reading events were held in Germany, Austria, Romania, Spain and the United States. Moreover, a collaborative agreement with the Progress Foundation was made in 2018 with a view to forming a network of STEM reading mentors in Romanian libraries. Early studies in STEM subjects At more than 60 universities across Germany, schoolchildren can expe- rience university-level studies thanks to support from the Deutsche Tele- kom Stiftung. Helping promote excellence in Germany’s higher educa- tion system, the foundation enables universities to offer what is known as “early studies”, whereby highly talented and hard-working schoolchil- dren are given the chance to attend normal lectures and take university exams during term time. The STEM subjects of mathematics, IT, chemis- try and physics are particularly popular among participants. This was confirmed by a non-representative survey conducted by the Deutsche Telekom Stiftung in the 2018 summer semester at the relevant German universities, which found that schoolchildren taking part in the initiative often tend to choose courses in STEM subjects. Other school projects run by the Deutsche Telekom Stiftung ƒ GestaltBar – the digital workshop ƒ Calliope Mini – minicomputers for elementary school students ƒ Junior Engineer Academies FundaMINT FundaMINT is the Deutsche Telekom Stiftung’s grant program for stu- dent teachers in STEM subjects. It helps student teachers get ready for their future career. Up to 35 grants are awarded every year for a period of four semesters each. Since 2017, the Vector Foundation has acted as a project partner and funded five FundaMINT grants in each cohort. As of 2018, this number has increased to ten. Since 2016, the Deutsche Telekom Stiftung has offered its grant holders the chance to complete a school placement in selected countries in Central, Eastern and South- Eastern Europe as part of the Klaus Kinkel scholarship program. This part of the FundaMINT program is run in collaboration with the Pädago- gischer Austauschdienst (PAD), a department of the Standing Confer- ence of the Ministers of Education and Cultural Affairs, and the Central Agency for German Schools Abroad. STEM Didactics Fellowship program In 2018, the Deutsche Telekom Stiftung invited applications for the STEM Didactics Fellowship program for the third time. Up to nine fellow- ships are granted each year to young researchers and scientists in the fields of mathematics, physics, chemistry, biology, computer science, technology and science education. The young fellows can attend semi- nars and workshops on topics such as job negotiations and supervising doctoral candidates and are involved in the Deutsche Telekom Stiftung network.

SOCIETY A RELIABLE PARTNER IN THE DIGITAL WORLD Honing skills 101 In 2018, the focus was on projects that exemplify how innovations and educational success can result from taking new, perhaps even unfamil- iar approaches. The awards went to projects where conventional educa- tional institutes are working together with partners such as parental initi- atives, committed individuals, other educational institutes, or busi- nesses. EDUCATIONAL STEM ACTIVITIES IN CROATIA Support for Pupils and Students through Scholarships and Donations By helping to prepare Croatia for a new wave of technological change, Hrvatski Telekom is making a significant contribution to the populariza- tion of STEM knowledge and skills, and the application of modern tech- nologies in all segments of life. One of the goals of HT’s projects and cooperation with educational institutions is the exchange of STEM knowledge and practices. This means we are often able to facilitate participation by students in international projects during the initial years of their studies and we offer them scholarships or professional mentor- ing opportunities. One of the highlights from last year is that HT donated HRK 300,000 to the Institute for Youth Development and Innovation of Youth (IRIM) for the project entitled "Advanced Internet of Things Technologies (IoT) in Croatian Schools". Over 100 schools throughout Croatia are participat- ing in the project. As a result of the financial assistance provided by HT, Internet of Things (IoT) equipment is available for use in these schools. The basic prerequisites for training and encouraging pupils’ creativity in identifying smart IoT solutions have been met through the equipment provided and appropriate teacher training. HT also supports students in various expert and sports competitions. We supported the team of the Croatian Robotics Society at the RObo- Cup international robotics competition in Canada, as well as MIOC stu- dents at the prestigious All-Star ACSL informatics competition in the United States. Students from Vinkovci High School were also supported at the WERcontest international competition for educational robotics in China, where they won the second place among 8,000 students in robot programming and testing. We supported FOI’s students at the student STEM competition in knowledge and sports – STEM Games. The most Renowned Robot in Croatia – Pepper A special place in the promotion of STEM subjects is also held by our humanoid ambassador – robot Pepper – who plays a major part in HT’s STEM program alongside her marketing role. Pepper promotes STEM subjects in elementary and high schools, and educates the young gen- eration about the importance of digital skills of the future. Pepper was the first robot in Croatia to win the honorary title of robotics assistant in the class Robotics and the Future at Juraj Dobrila University in Pula. The robot gave her first interview on the opportunities offered by new tech- nologies and supported the presentation of the Student Entrepreneur Incubator and the VISIO Science and Technology Institute. She belongs to a more advanced generation of humanoid robots, speaks fluent Croatian, uses gestures, moves her hands and body, and likes to hug. She is 1.2m tall, weighs 30 kilos, and is equipped with 12 sensors, four microphones, two loudspeakers, and two cameras on her forehead and in her mouth. REFUGEE AID: INTEGRATION INTO WORK, INTEGRATION INTO SOCIETY In 2018, Deutsche Telekom made approximately 440 job offers to refu- gees – predominantly as part of a training course, in the form of intern- ships or through our “Internship PLUS direct entry” program. Deutsche Telekom’s commitment to working with refugees started with a first-aid task force in 2015, which provided, for example, free Wi-Fi in refugee reception centers and properties to be used as refugee hous- ing. In addition, employees were assigned to the Federal Office for Migration and Refugees, and employees involved in volunteer refugee work received support. In 2016, the first-aid initiative developed into the current “Deutsche Telekom helps refugees” project, which we success- fully continued in 2018. By now, the focus is on integration of refugees into the labor market. In 2018 alone, there were more than 250 new job placements in the various programs. Up to 100 training positions, entry- level training schemes and cooperative Bachelor’s and Master’s pro- grams were offered. Recruitment days were hosted to find candidates for internships, with the main focus on letting recruiters and applicants get to know each other, rather than inquiring about previous experience or viewing certificates. In 2018, five recruitment days were held at differ- ent locations, during which the majority of the more than 100internships available were filled. Setting our sights in 2018 on long-lasting integra- tion into the world of work, we arranged subsequent training or direct access to employment for as many interns as we could. We succeeded in filling approximately 30percent of the longer-term positions with can- didates who had previously completed an internship at our company. Internship PLUS direct entry: integration into the working world In 2018, Deutsche Telekom also continued and developed the “Intern- ship PLUS direct entry” program, which started off as a collaboration with the Federal Employment Agency, the Deutsche Post DHL Group and Henkel in 2016. For example, we created new jobs in areas in par- ticularly urgent need of staff, such as technical service and customer service. An orientation phase lasting three to six months is followed by a two-year employment contract. The advantage is that refugees have time to improve their language skills and to gradually find their feet in their new roles while working at the same time. In total, we once again assigned 38 relevant positions at Deutsche Telekom in 2018. The first graduates will complete the program at the start of 2019. To help them integrate into the professional world for good, at the end of 2018 we gave the first cohort the unprecedented opportunity to take the “Fit for the German labor market” training course. Those who pass this course also receive a TÜV certificate. In 2018, we received the HR Excellence Award for innovative lighthouse projects in human resources manage- ment for our "Internship PLUS direct entry" program. Scholarships open up opportunities As a sponsor of the “Welcome” grant program initiated by the Deutsche Universitätsstiftung, we help those who have taken refuge in Germany gain academic qualifications. The program offers refugee students in Germany one-on-one counseling with a lecturer from their field of study who lives near their university.

SOCIETY A RELIABLE PARTNER IN THE DIGITAL WORLD Supporting implementation 103 SUPPORTING IMPLEMENTATION We want to motivate people to find creative digital solutions to social challenges. To do this, we provide tangible support and make it easier for them to realize their ideas. Our efforts include, for example, our involvement with the “Deutschland sicher im Netz” association and our collaboration with the German National Association of Senior Citizens’ Organizations (BAGSO) to sponsor media literacy projects for seniors. Furthermore, we support the development of innovative solutions, such as new apps, and we develop our own sustainable products and ser- vices. We want to be a reliable partner in the era of digitalization, which is why we closely evaluate all of the feedback we receive. Our stake- holder dialog gives stakeholders the opportunity to rate sustainability topics according to their importance and assess our performance in the different areas. PARTNER FOR “DEUTSCHLAND SICHER IM NETZ” AND BAGSO The Deutschland sicher im Netz e.V. (DsiN – Making Germany Safe on the Net) association has served as a central point of contact for consum- ers and small businesses interested in the topics of IT security and data privacy for twelve years now. Thomas Kremer, Deutsche Telekom Board Member for Data Privacy, Legal Affairs and Compliance, is chairman of the board at DsiN. As a member of the association, we are committed to working with other companies and organizations on projects such as the IT-Sicherheit@Mittelstand series of workshops (IT security for SMEs), the Digitale Sicherheit (Digital Safety) campaign network, and Digital-Kompass (Digital Compass). We are also contributing to the Sicherheitsbarometer (SiBa, Safety Barometer) app for digital self-pro- tection. Furthermore, we are supporting the project Digitale Nachbarschaft (DsiN, Digital Neighborhood). This trains people as volunteer IT ambas- sadors who will pass on their knowledge and expertise to neighbors and colleagues. The project once again showcased its work during the launch event of the “Woche des bürgerschaftlichen Engagements” (Community Volunteering Week) in Berlin in September 2018. Our own company initiative 1001 TRUTHS, which aims to promote responsible media usage, also presented its aims and strategies there. As a member of the “Security, protection, and trust for society and busi- ness” platform, which is part of Germany’s national Digital Summit, we worked with the DsiN to develop a new educational tool for artificial intelligence. KInsights! is an interactive showroom that offers an insight into the latest AI technologies. Various experts (including scientists, ethicists, data protection officers) offer their views on practical current scenarios from day-to-day life that range from AI-controlled spam filters and chatbots to disaster management using AI. The tool was unveiled to the public by Prof. Günter Krings, Parliamentary State Secretary at the Federal Ministry of the Interior, Building and Community, at the Digital Summit on December 4, 2018. We work with BAGSO, the German National Association of Senior Citizens’ Organizations, to promote media literacy among seniors. As a partner, we sponsor the Goldener Internetpreis (Golden Internet Award). The award recognizes people over the age of 60 who use the internet skillfully and help others to get started in the online world. The last round of prizes in 2017 included a special “Letting ideas grow” award for the Hamburg-based “KulturistenHoch2” (“Culturists squared”) pro- ject. The project, which brings younger and older people together, received support through 2018 and beyond, including advice on how to expand into other cities. In November 2018, all the prize winners met up again in Berlin to review how their projects from the previous year had gone. The next award ceremony is planned for November 2019. In 2018, we again took part in the Deutscher Seniorentag (German Senior Citizens’ Day), which BAGSO organizes every three years. During the event, we showcased products and services that are aimed at peo- ple aged 65 years and over. These included mobile telecommunica- tions, fixed-line and MagentaEINS offerings, special apps for seniors, and security products for Magenta SmartHome. Visitors to our booth had the chance to use a variety of services. For example, we had two technicians available to set up mobile devices and answer technical questions. As an advisory board member, we are also involved in Digital-Kompass (Digital Compass), a joint project by BAGSO and DsiN. Digital-Kompass uses materials and regular meetings on digital issues to support internet guides who help seniors get online and explore the internet. A total of 75 Digital-Kompass locations are also being set up across Germany. Internet guides based at these locations create a trust- worthy (learning) environment for seniors and help them try out digital services and build confidence in using the internet. The Digital-Kom- pass locations are also hubs for others who want to get involved in the project or learn new skills with a view to passing them on. INNOVATIVE SOLUTIONS TO SOCIAL CHALLENGES Technology can also be used to address social challenges. That is why we promote the development of appropriate solutions and educational offerings. These include, for example, the IRMGARD app, which helps adults learn to read and write in German. It is aimed at both German speakers who have difficulties with reading and writing and people who are learning German as a foreign language. The following related devel- opments also took shape in the year under review: Sea Hero Quest – baseline study confirms positive contribution to dementia research Dementia is a huge medical challenge. Some 47million people suffer from dementia today – a number that is set to triple by 2050. Our “Game for Good” initiative aims to help scientists develop new procedures so they can diagnose dementia earlier. Over the last three years, we have worked with scientists and games developers to create the cellphone

SOCIETY ENGAGEMENT@TELEKOM 105 ENGAGEMENT@TELEKOM As a company, we see ourselves as part of society and actively take on our responsibilities. This attitude is reflected in no small part by our social commitment. For us, this also means encouraging our employees to get involved in volunteering. In doing so, they play a major role in strengthening social cohesion and act as ambassadors for our values. Volunteering is also very beneficial when it comes to internal HR devel- opment. It broadens the horizons of the individual, while also having a positive impact on social skills and teamwork. That’s why our corporate citizenship program engagement@telekom pursues two aims – to sup- port our employees’ current involvement and encourage them to find new ways to contribute to society. We give our employees a wide range of opportunities to volunteer, preferably in teaching projects that help develop media skills. This is one of the ways we help simplify and enrich the lives of those around us on a sustainable basis. OBJECTIVES MEASURES MEASURING SUCCESS § Use our core areas of expertise § Corporate volunteering § Social Commitment KPIs to benefit society § Support society as a trusted partner § Corporate giving § Donation Policy § Reviewing compliance with our Donation Policy § Cooperation with non-profit organizations TAKING RESPONSIBILITY IN OUR SOCIETY We contribute to society in a number of ways with our corporate citizen- ship program, engagement@telekom. engagement@telekom is based on two pillars: ƒ Long-term partnerships with non-profit organizations ƒ Corporate volunteering (supporting our employees in their volun- teering activities) and corporate giving (our donation activities) In times of digital transformation, we want to be a trusted partner to society. We contribute our core expertise and the commitment of our employees to these efforts. The work we undertake to honor our social commitment is often done within the context of our long-standing partnerships with organizations such as the TelefonSeelsorge crisis hotline. In addition, we promote media literacy among senior citizens in collaboration with the “German National Association of Senior Citizens’ Organizations” (BAGSO). As a member of “Deutschland sicher im Netz e.V.” (DsiN – Making Germany Safe on the Net), we support its work for IT security and data protection. Beyond this, we participate in the “Civic Involvement Week” sponsored by the National Network for Civil Society. On numerous Social Days, we give our employees the opportunity to get involved in social or environ- mental projects as volunteers – including with our partners. Corporate volunteering programs give our employees the opportunity to actively contribute by teaching media literacy. They can do this, for instance, through the initiative “Media sure! But secure.”, which pro- vides teaching materials that our employees can use for workshops. In doing so, they help people better understand digital phenomena, thus laying the groundwork for participation in the digital world. However, Deutsche Telekom’s corporate volunteering expands into other areas, too. For instance, we also encourage our employees to help integrate refugees into society and support them in learning German online as part of the “eStart” project. Volunteer work is another important part of our training and development programs, and we recognize our appren- tices’ dedication with the Group-wide competition “Responsibility Wins”. Through our corporate giving program, we support the work of aid organizations worldwide – preferably in the form of long-standing part- nerships – and provide rapid assistance in disaster situations. Our Group Donation Policy lays out the guidelines for these activities. For example, we have been working with Germany’s Relief Coalition, Aktion Deutschland Hilft, since 2003. We cooperate closely across national borders when it comes to our social involvement and share experience and best practices. We use a set of KPIs to measure our success: ƒ The “Social Commitment” ESG KPI reflects our performance. ƒ The “Community Investment” ESG KPI reflects our social commit- ment in terms of financial, human, and material resources. ƒ The “Beneficiaries” ESG KPI measures the large number of active contributors as well as the many people they reach as target groups.

SOCIETY ENGAGEMENT@TELEKOM 107 STEM subjects (science, technology, engineering, and mathematics) in a fun way. Around 100 children benefited from this approach in 2018. In total, our employees volunteered 750 hours of their time for the IT@ school initiative in 2018. We are already in talks with an additional 30 schools regarding future collaborations. STEM reading mentors Working in partnership with the German Reading Foundation, the Deutsche Telekom Stiftung is looking for volunteer STEM reading mentors, both in Germany and abroad, who can inspire children aged between three and ten to take an interest in books that deal with mathe- matics, natural sciences, and technology. By late 2018, a total of around 1,700 STEM reading mentors had signed up to the network – including 80 Deutsche Telekom employees (as of October 2018). Christmas toy drive Each year, the annual “Social Day” of our Start up! initiative gives start- ups sponsored by Deutsche Telekom the opportunity to contribute to a charitable cause. In 2018, they supported a toy drive for Eastern Euro- pean children in need, which involved collecting and wrapping Christ- mas gifts. In December 2018, the gifts were sent to Bulgaria, Romania, Moldova, and Ukraine and handed out in orphanages, hospitals, insti- tutes for the disabled, kindergartens, and schools in remote and rural areas. Christmas campaign – making children’s wishes come true In 2018, Deutsche Telekom employees once again volunteered to make the Christmas wishes of children and young people living in institutions come true. The children and young people write their name, age, and wish on a paper star. Each star has a maximum value of 30 euros. Employees take one or several stars, buy the desired present, wrap it in festive gift wrap, and hand it in to the organizational team. Once all pre- sents are gathered, they are handed over to the homes. HELP MEASURED IN KILOMETERS AT T-MOBILE POLSKA Help Measured in Kilometers is a nationwide campaign launched in 2013 and organized by T-Mobile Polska since then. It aims to support physically disabled children by providing prostheses and rehabilitation. All smartphone users who run, cycle, rollerblade, walk, or take part in wheelchair sports are able to join the campaign. The kilometers cov- ered are tracked using the free Endomondo Sports Tracker app installed by all the participants on their smartphones. The secret of the campaign’s success is a combination of three ele- ments: new technologies, a passion for physical activity and a desire to help kids. Since the beginning of the campaign, T-Mobile Polska has been able to continuously increase the number of kilometers collected. After gathering 40 million kilometers in 2013, we notched up more than 150 million kilometers in 2018. In 2018, we invited deaf people to join our project. All our media materi- als were also translated into sign language. For the sixth time running, T-Mobile Polska has turned the collected kilo- meters into zlotys to help children in need. This campaign has already donated 6 million zlotys to the TVN Foundation “You are not alone”. COOPERATION WITH THE MINISTRY OF MIGRATION IN ALBANIA Telekom Albania is cooperating with the Ministry of Migration on a new program offered to migrants. The program assists migrants and asylum seekers returning to Albania by helping them to reintegrate in the socio- economic life of Albania. Migrants who are underpaid or unemployed are given access to higher paying jobs through training courses and job placement schemes. The program includes training in information tech- nology and foreign languages taught by experts in these areas. Partici- pants are given courses lasting 30-40 hours, alongside interview prepa- ration, sector-based job placement services, and career advice. Donations for "Ein Herz für Kinder" In December 2018, 1,040 Deutsche Telekom employees supported the television show in aid of the “Ein Herz für Kinder” children’s charity by volunteering at ten locations. This meant that 140 more Deutsche Tele- kom employees got involved in the campaign this year compared to last year. They volunteered at service centers collecting donations from TV viewers over the telephone. Support for “Aktion Deutschland Hilft” We have been supporting the charitable projects of “Aktion Deutschland Hilft” (Germany’s Relief Coalition) with the help of our employees since 2003. As a long-time partner of the organization, Deutsche Telekom is committed to providing emergency aid and thus supports reconstruction and disaster prevention projects. Deutsche Tel- ekom also made a donation of 50,000 euros immediately after the cata- strophic earthquakes and tsunami on the Indonesian island of Sulawesi in September 2018. The target group is migrants and asylum seekers of different ages who have returned to Albania. The program is intended to help them reinte- grate in the social life they left behind, in schools and workplaces, or to set up a new business. Telekom Albania’s IT infrastructure is used to facilitate these courses. DISASTER RESPONSE IN THE USA From the Hawaii Volcano, to the California wildfires, to hurricanes Lane, Florence, and Michael, T-Mobile USA has been mobilizing its resources and people. T-Mobile’s 24/7 crisis teams worked tirelessly to ensure network reliability and respond to customers in need. We’ve also donated millions of dollars in calls, texts, and equipment to assist relief efforts around the world. The company’s disaster response efforts sup- port communities with network response teams, telecommunications infrastructure, and employee volunteers to lend a hand and ensure net- work reliability. ƒ The T-Mobile engineering and rapid response teams quickly acti- vated emergency equipment such as fuel trucks, mobile Cell on Wheels (COWs) and back-up power solutions, including portable generators.

SOCIETY CULTURAL AND SPORTS SPONSORSHIP 109 CULTURAL AND SPORTS SPONSORSHIP Culture and sports are a source of pleasure and inspiration for society. They create a sense of community and help us come together with oth- ers from different cultural and political backgrounds. As an international business, we believe that sponsoring cultural activities and sports is part of our corporate social responsibility. GOALS MEASURES MEASURING SUCCESS § Broad access to culture § Sponsorship Policy § Reviewing compliance with the § Promoting competitive and § Promoting school sports, Sponsorship Policy recreational sports recreational sports and inclu- sion projects § Supporting cultural offerings HOW WE PROMOTE CULTURE AND SPORT We are one of the leading sponsors of culture and sports in Germany, and our national companies are also engaged in this cause. In addition to providing funding, we help artists, athletes, event organizers and associations with their communication and marketing activities. Being involved in the regions where we are based is another important aspect. Music sponsorship is a long-standing tradition at Deutsche Telekom and a key part of our company’s brand communication activities. It is our goal to facilitate access to cultural events and give people an outlet to share their thoughts and ideas. Our main sponsorship focus is placed on events such as the Beethovenfest and the International Telekom Beethoven Competition in Bonn, which has acted as a springboard for young pianists from all over the world for the past 14 years. We are a partner of Junges Theater Bonn and sponsor a number of pro- jects, including a media education school project aimed at encouraging children at elementary school to learn about new media through fun and creative activities. As part of our sport sponsorship activities, we promote both competitive and recreational sports. Our main focus is on soccer partnerships with DFB (the German Football Association), FCBayern Munich, and other major German league soccer teams. As a Bonn-based Group, we also devote particular effort to supporting the Telekom Baskets Bonn. We also assist athletes through Deutsche Sporthilfe (a German sports aid foundation), the DFB’s Sepp Herberger Foundation, and the National Paralympic Committee Germany. In 2018, we extended our collabora- tion with the latter by another two years. Furthermore, we focus in particular on the aspects of sport that foster a sense of community. Our efforts revolve around recreational sports, school sporting activities, and athletes with disabilities. Our partnership with Deutsche Sporthilfe will continue until at least 2020 and will center on Paralympic sponsorship and athlete career transition – in other words preparing athletes to embark on a new career on leaving their sport. SPARKING A PASSION FOR SPORT WITH THE TELEKOM BASKETS We take responsibility for our immediate social environment, which is why we sponsor the Telekom Baskets in Bonn. As part of our “Tix for Kids” ticket campaign, for example, we raffle off two school group ticket sets (2 x 30) for every home game among schools in Bonn, all of which are eligible to participate in the raffle. Baskets@school student training project Deutsche Telekom’s Baskets@school initiative gives students in fifth through to tenth grade the chance to meet their sporting idols at school. In a training session lasting around 90 minutes, children and young people experience professional basketball training, with the pros on the Telekom Baskets team teaching them the tricks of the trade. The partici- pants also receive their own Baskets@school T-shirt and three Baskets- branded balls per class. School classes were able to apply for two train- ing sessions on November 30 and December 6. The project strengthens team spirit and teaches students from the region more about basketball. A particular highlight during the season was when the Baskets visited Tannenbusch Gymnasium (a secondary school) in Bonn in November 2018. Classified as an elite sporting school by the German Olympic Sports Confederation, Tannenbusch Gymnasium helps young athletes strike a balance between competitive sport and schooling. Under the slogan “Baskets against blades”, the school’s young fencers and the professional basketball players spent two hours showing off their sport- ing abilities to each other. First the schoolchildren, clad head to toe in fencing attire, demonstrated their foil, épée and sabre techniques to the team, then the Baskets put on a display of their dribbling, passing and throwing skills. Baskets Primary School Challenge In 2018, we teamed up with the Telekom Baskets to continued the Baskets Primary School Challenge in collaboration with the City of Bonn. This training project is aimed at encouraging second and third graders to take an interest in exercise and nurturing their sporting ambi- tions. The students are given the opportunity to train with Telekom Bas- kets players – and then go head to head in a challenge against other primary schools. What’s more, Deutsche Telekom provides a free box with training equipment that the schools can keep after the project has finished. The first training session in 2018 was also attended by Ashok Sridharan, the Mayor of Bonn. Primary school classes from Bonn and surrounding areas interested in taking part can register online. In 2018, the number of participating schools rose to 31, compared to 21 in the previous year.

SOCIETY CULTURAL AND SPORTS SPONSORSHIP 111 One of the highlights of 2018 was the “I AM THE MOUTH” exhibition, which ran from January 19 through March 18 at the Museum of Contem- porary Art in Zagreb (MSU) and included several pieces from Art Collec- tion Telekom. Visitors to the 52nd ART COLOGNE fair were also able to experience a virtual tour of “I AM THE MOUTH”. Deutsche Telekom presented the “Art Cologne Award for New Positions” to young artists for the fifth time at the fair. This year, the award went to Lito Kattou from Cyprus, whose sculptures, installations, and performances take space and time as their subjects. Art Collection Telekom launched its own art format in Bonn, the “Young Art Lovers”, to run in parallel with ART COLOGNE. This is an artistic journey through Deutsche Telekom head- quarters that gives young people an exclusive look at the company’s own art collection. The Polish artist Iza Tarasewicz opened the event by presenting her expansive art installation “ONCE INFORMATION HAS PASSED INTO PROTEIN” in person. Videos by Art Collection Telekom were the focus of the exhibition “Temporary Structures 4”, which opened in Ostrava, Czech Republic, in November 2018. Pieces from the collection were also shown at the 2018 viennacontemporary art fair. UNIQUE CONCERT EXPERIENCES – BEETHOVENFEST AND JAZZFEST In 2018, we returned as the main sponsor of Beethovenfest in Bonn and funded two inspiring evening concerts in September. The pianist Alberto Ferro honored Claude Debussy’s memory with a recital entitled “Pour le piano – Debussy zu Ehren” (“For the piano – in honor of Debussy”). Fans of experimental classical music also got their money’s worth – the Music:Eyes ensemble transformed the music of Ludwig van Beethoven into an audiovisual sound experience. The concert was organized by eight students from five secondary schools in Bonn. They are the protagonists of this year’s “Beethovenfest student manager” initiative, which Deutsche Telekom has been supporting for the past eight years. Every year, the team of students spends several months organizing, financing, and promoting the concert. During the period under review, we called on pianists to enter the Inter- national Telekom Beethoven Competition, which has been held every other year since 2005. This allows us to sponsor young professional pianists and offer them an international platform. One of the main things we expect from applicants is that they bring their own interpretations and ideas to their performance. The competition will take place from December 6 through 14, 2019, in Bonn. We also returned as the main sponsor of Jazzfest Bonn in April 2018. As such, we presented a double concert at the sold-out Telekom Forum on April 27, where gripping performances by Brazilian multi-instrumen- talist and soul jazz singer, Ed Motta, and the legendary British acid jazz group, Incognito, wowed an audience of approximately 1,200. use new augmented and virtual reality tools integrated in the renovated Permanent Exhibition Hall of the museum to interact with the museum’s collections and gain a unique and positive experience to share after their encounter. The Telecommunications Museum provides informal education, implements educational programs, and organizes events that reflect its outreach policy and dynamic relationship with society. LOTS OF THEATER FOR YOUNG PEOPLE – OUR PARTNERSHIP WITH JUNGES THEATER BONN Since 2004, we’ve maintained a successful partnership with Junges Theater Bonn (JTB), Germany’s most popular theater for children and young people. Like JTB, we believe theater can make a valuable contri- bution to the development and education of young people, especially in the age of the internet and smartphones. To allow as many children and young people as possible to visit the theater, regardless of where they come from or their social background, we’re offering the “Deutsche Telekom five-euro ticket” in collaboration with JTB, a discounted ticket category for children, young people, and families. On top of that, we also fund around 700 “Deutsche Telekom Sozialtickets” every year for children in school or kindergarten whose parents cannot afford to visit the theater due to their economic circumstances. OTE GROUP TELECOMMUNICATIONS MUSEUM: CHAMPION MUSEUM FOR 2018 IN GREECE The OTE Group Telecommunications Museum was selected as the Honored Museum for 2018 in Greece by the Hellenic Committee of the International Council of Museums (ICOM) on the occasion of the Inter- national Museum Day on 18 May. Under the slogan for this year’s Inter- national Day "Hyperconnected Museums: New Approaches, New Pub- lics", the Telecommunications Museum has scheduled a series of events and educational programs for children, families, and the elderly hosted at the museum’s renovated premises. Visitors to the museum We’ve also been running a media education project with JTB since 2015, the aim of which is to teach children to use the internet, smart- phones, and social media responsibly. The project centers on working with young schoolchildren to stage an original play. In it, the children demonstrate how they experience the web, and what opportunities and risks come with being so interconnected – both for the individual and society as a whole. This day-long project is offered every year to fourth- graders from Bonn and the surrounding areas. Drama teachers are there to help the children combine the short scenes they have developed into a full play. We plan to continue working with JTB till at least 2020.

EMPLOYEES CORPORATE CULTURE AS A SUCCESS FACTOR 113 CORPORATE CULTURE AS A SUCCESS FACTOR Ms. Bohle, you took over the role of Chief Human Resources Officer at Deutsche Telekom on January 1, 2019. Your previous career path included stops at McKinsey and Deutsche Bahn, where you were successful in the role of CEO of DB Fernverkehr AG. What motivated you to move to Deutsche Telekom? It is the people that determine whether a company will achieve lasting success.I have always enjoyed guiding, leading and motivating people – and, in doing do, influencing the success of the business. In my new role as Chief Human Resources Officer, I am responsible for all activities related to human resources – my team and I therefore make an impor- tant contribution to the skills, efficiency and motivation of all employees. I was attracted by this new challenge. And the many remarkable people I have been able to meet at Deutsche Telekom in the past months con- firm my decision. Moreover, the telecommunications industry is one of the most exciting sectors right now. And Deutsche Telekom is the leading player in Europe – we are building the digital infrastructure of the future. Our innovative solutions are changing our lives and society. That was an important reason for my move to Deutsche Telekom. What I also like is that Deutsche Telekom is shaping these changes in a responsible man- ner. And that’s why I also look forward to continuing to shape this com- mitment together with the colleagues from Corporate Responsibility. Focusing on customers and employees is a critical success factor for you. What is your first impression of Deutsche Telekom in this regard? I can see that many areas of Deutsche Telekom have a real pioneering spirit, one that you might otherwise normally expect to find at a younger company. There is so much happening here – from digital forms of col- laboration to new, agile methods, for example. These are excellent pre- requisites when it comes to identifying customer needs at an early stage, developing innovative products, and offering great service. Of course, at a large company it takes time for new developments to find their way through the entire company, that much is clear. And you have to take a close look again and again at what works and what doesn’t. But I have already seen a whole host of exciting things in my first few months. I very much look forward to shaping this path together with our employees. What role does diversity play for you in this regard? There are numerous studies showing that diverse teams are more suc- cessful. For me, diversity means more than just gender, it also includes age, technical background and nationality or culture, for example. By looking beyond our own horizon, we can generate new ideas and better results. Birgit Bohle,Chief Human Resources Officer and Labor Director Shortly after joining Deutsche Telekom, you asked all employees to share their thoughts and wishes with regard to the corporate culture. What is the idea behind this appeal? The culture of a company determine its success. The question is, which culture is the right fit for future business and market trends? What moti- vates people?Do they enjoy going to work, do they feel appreciated, are their accomplishments recognized? How do we want to work together? Right at the start of my new job, it is important for me to “take inventory” to begin with. The feedback is very good. We have a strong culture and many of our colleagues identify with our company and our brand. We need to further reinforce that. And, of course, we also see areas that we need to work on in order to be successful over the long term. The most important for me is that the corporate culture can’t just exist on paper; it has to be tan- gibly put into practice.

EMPLOYEES DIGITALIZATION AND THE WORLD OF WORK 115 DIGITALIZATION AND THE WORLD OF WORK The digital transformation changes the way we live and work. While it opens up new opportunities, it also presents new challenges. Today’s working world is already shaped by flexible work arrangements and the separation of value creation from time and place. Keywords such as artificial intelligence and virtualization are indicators of the revolutionary changes we face. They bring about competitive advantages through automated standardization of products and processes on the one hand and greater user centricity on the other. Both developments call for cre- ativity, which emerges from heterogeneous teams in particular. The effectiveness of these teams is increasingly determined by factors such as diversity, cross-team collaboration and the ability to derive social and ecological meaning from the work. Employees and companies alike must be willing to embrace change and keep on learning new things. ƒ We are trying out and strengthening new ways of collaboration with the initiative #Neues Arbeiten (New Way of Working) ƒ Under the “Agile Blueprint” project we provide initial help to all those company units that decide to implement agility ƒ Online learning platforms, MOOCs, concise learning modules for on the go, and learning games enable individual learning paths and promote lifelong learning ƒ We are taking new approaches in skills management with skillsUP! ƒ We support our managers with levelUP! SHAPING DIGITAL CHANGE The pace of digital transformation captivates many people, but also unsettles them at the same time. Exciting new opportunities are emerg- ing, accompanied by concern about an uncertain future. The surround- ing political debate is often shaped by populism. But the figures say something else: Open and inclusive societies improve prosperity and keep the working population at a record level – despite, or even because of, digitalization. Achieving this primarily requires a modern communications infrastructure, which forms the backbone for the digital transformation of society and the economy, and fair access to this infra- structure. Deutsche Telekom aims to help shape the digital transforma- tion: by expanding our networks and developing innovative solutions. With our company’s slogan “Life is for sharing,” our focus is on people, on both customers and employees. A crucial aspect in dealing with change successfully is optimism about the future. That is why we show our employees the opportunities offered by the digital workplace and create an environment that provides easier access to new ways of work- ing. We want to promote an innovative culture of cooperation that is allowed to question the status quo. It should create space for testing and experiments, where failure is understood as a way to improve per- formance and quality. We support this development on both a staff and organizational level with new ways of working and innovative learning methods. We are also trying out innovative approaches to foster dialog across disciplines and hierarchies. One example of this is our “Kitchen Talks” – informal sessions where topical issues are discussed. The members of the Board of Management also hold regular open discussions, such as the town hall meeting about our Corporate Social Responsibility in September 2018. “You and Me” (YAM), the social network for our employees, has helped us foster a lively culture of dialogue for years and offers employees the chance to engage directly with board mem- bers and managers. In 2017 we launched the blog “We like Working in the Digital Age” where we share our knowledge and experience on the subject of working in the digital world with our employees and inter- ested persons outside our Group. LOOKING INTO THE FUTURE: WORK 2028 What will our working world look like in 2028? How are digitalization and artificial intelligence (AI) impacting our work and life? What will managing people be like in ten years’ time? How will companies have changed? We have examined these and other questions together with our consulting firm Detecon and Henley Business School. 50 influential business leaders from a wide variety of industries and sectors in various countries were surveyed for the study. The results were published in 2018 in the extensive study “Work 2028: Trends, dilemmas and oppor- tunities.” We laid the foundation for dealing with the digital transformation of the working world in 2017 with our position paper (external link). In it, we set forth our stance on shaping the digital world of work. One thing is clear: We do not have a patent recipe, but must try out new things, fail and learn. One of our first steps on this path are new work models, open work environments, digital work tools, and social networks to enable flexible, interdisciplinary working. Those surveyed concurred that AI and man-machine interaction will be a natural part of our everyday professional and private life in 2028. They also believe that technological developments will be the basis for radi- cal transparency in working life: Decisions will be democratized in the future, while leadership will rotate and be multi-directional. However, the participants interpret the effects of this development in a variety of dif- ferent ways, the optimists expressing a belief in a better, more secure future that will provide more space for creativity and new, exciting fields of work. Against them, the skeptics fear that existing work roles, even quite complex ones, will begin disappearing, and that only very few new job profiles will be created to replace them.

EMPLOYEES DIGITALIZATION AND THE WORLD OF WORK 117 also offered as classroom courses. Managers can select their personal learning content, making the learning process perfectly tailored to individual requirements. More than 1,400 managers from Deutsche Telekom took part in levelUP! in 2017 and 2018. MYNET GO: NEW APP FOR EMPLOYEES AT OTE-COSMOTE The application mynet.go is a mobile portal for all employee-related applications and will continue to undergo development with new fea- tures. The employees have access to information, news, and features which facilitate collaboration inside and outside the office. The applica- tion aims to assist in the creation of a better working day that is more flexible, allowing access to information, simple and instant completion of tasks using a mobile device, and from any location. The OTE Group has the vision of becoming an example of digital transformation in order to provide customers and partners with a holistic digital experience. Mynet.go represents a significant step in this direction. Agile working at T-Systems We also promote agile collaboration at T-Systems. The use of agile methods in day-to-day work is a basic requirement for that. Yet the organization must also be flexible enough to support constant change and shape interaction expediently. Crucial to this are managers who think in an agile manner and motivate and enable their employees to adopt this mindset. As a result, they lay the foundation for moving away from an introspective way of working (silo mentality) and toward a customer-oriented approach (client centricity). The Agile Hub plays an important part in that. It comprises HR and Business colleagues with many years of experience in an agile environment. The Agile Hub’s objective is to boost the transparency of agile initiatives and projects at the Group, enhance dialog within T-Systems and with the Group, and promote agile working by means of pinpointed expertise and advice. In 2017, T-Systems became a partner of the diGAP (Good Agile Project Work in the Digitalized World) research project sponsored by the Fed- eral Ministry of Education and Research. The three-year project is exam- ining agile working in order to derive recommended actions for design- ing the working environment of agile teams and how they work together. T-Systems is implementing the “Development and practical test for scaling of good agile project work” project as part of this. Various work- shops and interviews were held in 2018. The results will be incorpo- rated in the research project in 2019. SKILLS MANAGEMENT IN THE DIGITAL AGE: SKILLSUP! There are 5,500 different job descriptions at Deutsche Telekom in Germany alone. Many of them have literally become outdated in the wake of digitalization: They no longer match today’s tasks and required skills and will therefore also not meet our future requirements. The skillsUP! project we launched in 2018 aims to cut the number of job profiles to less than 1,000 and adapt them so that they last the next three to five years. That will also ensure the basic profiles can be sup- plemented in the future to reflect the business units’ latest requirements at little cost and effort. However, skillsUP! involves more than just mod- ernizing job profiles: The new, up-to-date job descriptions are linked to the Group’s skills management so as to ensure holistic, integrated HR planning. It is easier for managers and employees to identify possible gaps in the skills, initiate training measures, or advertise new jobs. Importantly, all phases of HR planning are linked together by means of special software, giving employees and managers simple access to the system at any time. Deutsche Telekom is the first large German com- pany to have such a mechanism. skillsUP! is the Group-wide implemen- tation of several pilot projects that have been conducted since 2016. LEARNING DIGITAL LEADERSHIP: LEVELUP! Managers today need different skills and have to be able to apply new methods than was the case just a few years ago. That is why we launched levelUP!, a ten-month training program for successful leader- ship in the digital world, for our executive staff in 2017. For the levelUP! program, we are cooperating with the internationally renowned busi- ness school Duke Corporate Education (Duke CE) in Durham, North Carolina (USA). The program not only helps to expand and improve leadership skills, but also conveys new perspectives and ways of think- ing through dialog with leading innovators and management experts. levelUP! comprises modules that can be combined flexibly: Interactive learning formats are mainly available in digital form, although some are

EMPLOYEES DIALOG AND COLLABORATION 119 EMPLOYEE RELATIONS AT OUR NATIONAL COMPANIES What progress have our national companies been making in implement- ing our Employee Relations Policy (ER Policy)? We determine such pro- gress using special reviews. Two to three national companies are sub- ject to such a review each year. They use the results of the review to further improve their relations with employees. The results also help us conduct a Group-wide assessment of employer/employee relations and any human rights risks involved in our business activities. In 2018, we carried out reviews in Malaysia, Singapore and Hungary. We are publishing the detailed results on our website. Hungary (Magyar Telekom): The ER Policy and its core elements have been successfully integrated throughout the company. Employees know the policy and what it means for their everyday work. The training and development opportunities for employees and managers should also be highlighted. The management feels it is important to strike the right bal- ance between achieving the transformation targets and hiring new employees: The company needs to find new, innovative talents and inte- grate them quickly in a larger, multi-generational team, yet it must also improve its long-term performance. Magyar Telekom was chosen as one of the top 10 employers in Hungary in 2017, which is reflected in its good results for employee loyalty, team spirit and collaboration. Singapore (T-Systems Singapore): The ER Policy has been in effect at T-Systems Singapore since the end of 2012 and has become an inte- gral part of the company’s everyday work. This is confirmed by the on- site review and discussions with the workforce. The ER Policy’s success- ful implementation is demonstrated, for example, in the regular town hall meetings, after which all employees assemble, or in the spirit of open collaboration in teams. Despite the great competitive pressure, T-Systems Singapore is economically successful. The local manage- ment is therefore highly respected among the workforce. This is proven by the good survey results in the categories of employee loyalty, team spirit and collaboration. Malaysia (T-Systems Malaysia): Extensive discussions with manage- ment and numerous employees of T-Systems Malaysia showed that all elements of the ER policy introduced in 2012 had been successfully implemented. Employees stated that they were very satisfied with their employer and cooperation with colleagues and management. However, they suggested that the components of the ER Policy should be made more widely known. That applies in particular to the general guidelines and grievance channels. In addition, the workforce would like to see the contents of the policy as the subject of a special town hall meeting. SOCIALLY RESPONSIBLE STAFF RESTRUCTURING CONTINUED The transformation of our Group was a key issue in past years and will continue to be so in coming years. It entails extensive staff restructuring, which we again accomplished in a socially responsible manner in 2018. As part of that, we continue to employ tools such as severance pay- ments, dedicated retirement, and phased retirement. The principal developments are outlined below: Vivento: service provider for staff restructuring Our HR service provider Vivento continued to support us in socially responsible staff restructuring in 2018. It identifies new career perspec- tives outside and at the Group for our civil servants. In 2018, the focus was primarily on transfers of civil servants to the Federal Office for Migration and Refugees, the Federal Employment Agency, the Federal Armed Forces, and customs agencies. Employees were assisted in find- ing positions with federal, state and local administrative authorities. About 326 civil servants employed at Deutsche Telekom opted for a permanent transfer to federal, state or local authorities in 2018. Since Vivento was established 15 years ago, it has helped more than 51,374 employees (as at December 31, 2018) to gain a new career perspective. Fundamental transformation of T-Systems Deutsche Telekom’s Systems Solutions business is undergoing an extensive process of transformation. The goal is to position T-Systems as an attractive, flexible partner for digitalization. The foundation for the future reorganization in Germany was laid in 2018. From January 2019, T-Systems will have a new setup geared toward portfolio units, such as SAP, Internet of Things, Security or Digital Solutions,which work increas- ingly in flexible organizational structures. Cost cuts are intended to help fund investment in new growth areas, such as the cloud, the Internet of Things and security, as well as ensure competitive prices. The reorgani- zation will enable us to make our administration and sales structures much leaner. Capacity requirements will be reduced by a total of some 5,600 jobs in Germany by the end of 2020, while new jobs will be added in growth areas. Apart from the corporate structure, our location struc- ture in Germany will also be streamlined. The current 230 office loca- tions in more than 100 cities will be merged at 25 cities in the future. Shared functions, such as Communication, Finance and HR, will be pooled at the central locations Hamburg, Berlin, Bonn, Darmstadt, Frankfurt am Main, Leinfelden and Munich. We aim to shape the restructuring in a socially responsible way using tools such as phased retirement, early retirement, and severance pay- ments. The T-Systems service provider Job Service & Placement (JSP), established in 2014, will provide employees with advice and support in the change process under an extensive program. Employees without a job in the new organization will transfer to JSP, where new employment will be found for them within the Deutsche Telekom Group and else- where. Compulsory redundancies are to be avoided wherever possible. Our employees will be supported by various initiatives during the change process – for example, with Outward Mindset workshops, which will help them reflect positively on the transformation in a wider context. We trained more than 2,500 employees in this approach in 2018. Realignment of Telekom Deutschland GmbH Deutsche Telekom’s business in Germany continues to change, with the goal of being even more competitive and service-oriented. The transfor- mation project comprised three major changes: ƒ A new service organization was founded to provide services for consumer, business and carrier customers from one source. ƒ A new sales organization was created for business customers. ƒ A consumer sales organization was formed from T-Shop Gesellschaft.

EMPLOYEES DIALOG AND COLLABORATION 121 IMPLEMENTATION OF THE 2017 COLLECTIVE BARGAINING ROUND AND OTHER HARMONIZATIONS IN 2018 In the course of the 2018 collective bargaining round, the incomes of employees covered by collective agreements at Deutsche Telekom in German were increased. Changes with effect from January1, 2018: ƒ Conversion from an annual target salary to a fixed annual salary, in conjunction with performance-related bonuses, for consumer sales. ƒ Standardization of the times for increments in the salary range for ƒ Starting in 2018, the salaries of roughly 60,000 employees covered each salary group. by collective agreements at Deutsche Telekom AG and in the Ger- many operating segment were raised by a total of 5.2 percent for employees in the lower pay groups and 4.8 percent for employees in the higher pay groups. The first salary increase took effect on May1, 2018. The second salary increase will be implemented on May1, 2019. The duration of the new collective wage agreements is mostly 26 months and they are scheduled to end on March 31, 2020. ƒ Salaries at T-Systems for some 20,000 employees under collective agreements will be raised in two phases by a total of 5.5 percent for employees in the lower pay groups and 4.5 percent for employees in the higher pay groups. After the first increase on January 1, 2019, the second increase will take place on January 1, 2020. The collec- tive wage agreement has a term of 33 months and will expire on December 31, 2020. ƒ The wages of apprentices and students in cooperative study pro- grams will also be increased in two phases. After the first increase of 40 euros effective May1, 2018, there will be another increase of 30 euros in May 2019. Subsistence allowance for apprentices not living with their parents was increased by 20 euros to 250 euros. The standardization and harmonization of our German remuneration systems adopted in the 2016 collective bargaining round was further driven forward. The first successful collective bargaining took place in 2017; the results will be implemented on January 1, 2018, and January 1, 2019. Collective bargaining on additional harmonization topics was continued in 2018. Apart from a sharp increase in salary, we also intend, where possible, to introduce the new “additional days off” part-time model at companies covered by a collective bargaining agreement in the Group in Germany. Under the new part-time model, employees have the option to reduce their contractual weekly working hours, but to continue to work full-time and take the hours they have earned as block leave over the course of the year. Harmonization of remuneration systems In the course of the 2016 collective bargaining round, we and the union identified that there was a need to harmonize the remuneration systems within the Group in Germany and subsequently conducted negotiations on that issue. Salaries will be harmonized at all companies in Germany covered by a collective bargaining agreement, with the exception of T-Systems. The following step-by-step adjustments were agreed: ƒ Gradual conversion of non-sales from an annual target salary to a fixed annual salary. The current compensation system is retained for 2018; however, the target achievement and hence payment of the variable component was set at 100 percent. Changes with effect from January 1, 2019: ƒ Complete conversion of non-sales employees to a fixed annual sal- ary, hence elimination of variable compensation for non-sales. ƒ The arrangements on variable remuneration will also be gradually harmonized at T-Systems as of 2019. Non-sales at T-Systems will likewise be converted to a fixed annual salary in 2021. GREAT INTEREST IN EMPLOYEE SURVEY Our employee survey, which is conducted every two years, is an impor- tant tool for obtaining feedback from our employees, discovering weak- nesses, and implementing suitable measures to eliminate those weak- nesses. The twice-yearly pulse survey additionally helps us obtain a current snapshot of the mood at the company and verify whether the introduced measures have been successful. This lets us make quick adjustments if necessary. Some 75 percent of employees throughout the Group took part in the last employee survey in 2017. The Group index value for commitment – our gage for employee satisfaction – was 4.1 on a scale of 1 to 5, with 5 being the highest. The pulse survey in November 2018 saw a 72 per- cent response rate among employees. 70 percent of participants expressed high satisfaction with their employer. TRUST-BASED COOPERATION WITH EMPLOYEE REPRESENTA- TIVES Co-determination rights play a key role with respect to digital transfor- mation. We want to create the working world of the future alongside employee representatives and unions – with an eye toward the needs of our workforce and the success of our company. We negotiated and adopted over 150 agreements in 2018 through constructive dialog with our works councils. Two key transformation projects we conducted in 2018 in close coordination with the works councils were the organiza- tional measures “Technology & Innovation 2018” and “T-Systems Trans- formation”. In addition, 85 collective agreements were concluded with the union ver.di in 2018. Apart from the collective bargaining agree- ments, the focus in 2018 was on concluding arrangements on harmo- nizing the Group’s remuneration systems as far as possible. Collective bargaining plays an important role and has a long tradition at our com- pany, a fact made clear by the percentage of employees covered by collective agreements. As of December 31, 2017, some 71percent of employees in Germany were covered by collective agreements.

EMPLOYEES OCCUPATIONAL HEALTH AND SAFETY 123 OCCUPATIONAL HEALTH AND SAFETY Measures that promote health within the company not only help individ- ual employees and ensure long-term business success, but also have positive effects on society as a whole. We use corporate health manage- ment to take on social responsibility and proactively promote a culture of health. Digitalization also plays an important role here: It places new demands on health management and, at the same time, opens up many new opportunities that we are actively making use of. GOALS MEASURES MEASURING SUCCESS § Promoting employee health § Occupational health and safety § External and internal audits and performance management system § Consulting offers § Preventive measures § Assessing risks, e.g., as part of the employee survey § Regular workplace inspections § Accident rate § Health rate § Evaluating measures and offers § Employee satisfaction and health index from the employee survey and collective agree- ment on stress prevention PROMOTING THE HEALTH OF OUR WORKFORCE Clear responsibilities and high standards The Board of Management has overall responsibility for occupational, health, safety and environmental protection. In this connection, the health rate is reported to the Board every quarter. We combine and #control our programs for “Safety and Health at Work” at Group level; health and safety managers are responsible for implementing these pro- grams locally. Our Health & Safety Environment handbook describes +the details of our health and safety management system, including the parties involved, their duties, and the programs. The handbook serves to harmonize, simplify, and align our management systems with com- mon targets across the Group. Occupational health and safety is effectively incorporated into our +structures via certified management systems and appropriate policies and guidelines. Until xx 2018, the basis for this was the internationally recognized management standard OHSAS18001. Since 2018, we +have instead used ISO standard 45001. We were one of the first DAX companies to have our management systems certified according to ISO 45001. During the reporting year, 90 German and international loca- tions were audited according to ISO 45001 and ISO 14001. Their certifi- cation was renewed in all cases. We systematically assess the effectiveness of our measures. This includes reviewing the results of our employee survey, evaluating stress prevention measures under collective agreements, competitor analyses, and other indicators. Our Group-wide employee survey in particular helps us determine the mental stress in the workplace, the available resources, and the effects of stress. We support managers and teams with specific offerings based on these findings. We give high priority to the topics of awareness, prevention and personal responsibility. Different performance indicators reflect the effectiveness of our commitment: ƒ In 2017, we set ourselves the goal of achieving a Group-wide health rate (not counting people with long-term illnesses) of 95.9 percent by 2020. At Deutsche Telekom in Germany, the health rate for 2018 (not counting people with long-term illnesses) was 95.3 percent (previous year: 95.4 percent). Group-wide, the health rate for 2018 (not counting people with long-term illnesses) was 93.6 percent (previous year: 93.7 percent). ƒ The accident rate in Germany for 2018 was 8.7 accidents (resulting in over three days of absence) per thousand employees, well below the industry average. ƒ The Group-wide health index – calculated in 30 countries as part of the last employee survey in 2017 – increased positively by 0.1 to 3.6 (on a scale of 1 to 5). The next survey is scheduled for 2019. In 2018, Health & Safety Management was honored at several locations, including Greece, Mexico and the Czech Republic. Further information is available here. ACTIVELY COMBATING LACK OF MOVEMENT AND ITS CONSEQUENCES Lack of movement at work is a major risk factor in the development of musculoskeletal disorders and cardiovascular illnesses. As the work- force ages, the frequency of such illnesses will continue to grow if suitable preventive countermeasures are not taken in due time. Recent scientific studies show that taking regular breaks can effectively prevent the negative effects associated with extreme lack of movement at work. To help employees with this we have implemented a number of different measures and, for example, employed mobile fitness coaches on site. They instruct our employees on simple exercises that can be performed right at the workplace. We added a new exercise offer in 2016 with the Active Workplace pro- ject. Desk exercise bikes give our employees a simple opportunity to integrate exercise into their workday. Since their launch, some 15,000employees have used the desk bikes. The project was scientifi- cally followed by a study conducted by Berufsgenossenschaft Verkehr (the occupational accident insurer of the transportation industry), the Institute for Occupational Safety and Health of the German Social Acci- dent Insurance (IFA) and the German Sport University Cologne. The academics examined the participants’ levels of acceptance and well- being, their physiological activity parameters, energy conversion levels and body posture. Not only were participants having fun while exercis- ing, their mental activity also increased. Another positive side effect was

EMPLOYEES TRAINING AND DEVELOPMENT 125 TRAINING AND DEVELOPMENT The working world is undergoing radical change. Work is becoming more digital, flexible, and versatile. Employees and companies alike must be willing to learn and to change. After all, existing professions will change and new job profiles in business areas such as cyber security, artificial intelligence or the Internet of Things will emerge. That is why we offer our employees a wide range of individual training and develop- ment options, which we are continuously enhancing to reflect needs. This way we can strengthen our company’s competitiveness and pre- pare ourselves for the digital future. INTERNAL GOALS MEASURES MEASURING SUCCESS § Promoting our employees’ skills development and performance § Training offers § Number of openings for app- § Training and development § Management development § Talent programs § Digital learning formats rentices § Participation in training and development opportunities § Percentage of digital learning formats used § Employee satisfaction HOW WE SHAPE THE DIGITAL WORLD OF WORK We can only master the dynamic challenges of our industry with excel- lently skilled and motivated employees. We therefore offer all employ- ees diverse development opportunities – whether they are entry-level professionals, experts or managers. The cornerstones of our vocational training and development programs are our Employee Relations Policy, the Guiding Principles and our Leadership Principles. Training and lifelong learning ensure employability We help the experts of tomorrow gain qualifications thanks to our com- prehensive training and continued education offers in both the techni- cal and commercial fields. In the 2018/2019 training year, we employed 6,000 apprentices and students on cooperative degree programs – that makes us one of Germany’s biggest training providers. In 2018, we provided 2,200 training positions throughout the Group, of which 1,300 were apprenticeships, 700 openings for Bachelor’s students and 100 for Master’s students. Up to 100 training positions were available to young refugees. We promote lifelong learning in all phases of employment and support our employees on their individual learning path. To be able to identify individual needs for development in a targeted manner and provide tailored offerings, we obtain an overview of our employees’ skills. We offer our employees a wide range of individual training and develop- ment options, such as work abroad or work/study programs. Under the Bologna@Telekom program, we give employees the chance to partici- pate in a part-time university program – and gain qualifications ranging from Bachelor’s to Master’s degrees. A total of 1,500 employees have taken up this offer since it was launched 10 years ago. Digitals skills are the key to the future Digital literacy – in other words, the ability to use digital offerings com- petently and actively shape digitalization – is of great importance at Deutsche Telekom. That does not just involve repeatedly familiarizing yourself with new technical developments, but also acquiring skills that will be particularly required in the future. That is why we continuously analyze which skills will be in demand at the company in the future and develop appropriate training measures. We take strategic key areas such as big data, AllIP and security as our guide. Since 2014, for exam- ple, we have offered an annual part-time training program where employees can qualify as a Cyber Security Professional. 19 employees are already working as Cyber Security Professionals throughout the Group now that the first two years’ intake has completed the program. Digital learning is becoming standard We have been promoting digital learning at our Group for many years. In 2018 more than 41 percent of all course hours were completed in digital form – and that ratio is to increase to 60percent by 2020. We use online learning formats and our Massive Open Online Courses (MOOCs) as well as innovative formats such as simulations, concise learning mod- ules for on the go, and learning games. We also rely increasingly on self- organized digital learning. For instance, experts rub minds and share ideas about future topics in Communities of Practice (CoPs). Strengthening leadership skills in the digital age We also adapt our management development programs to the chal- lenges of the digital age. Since 2017, our extensive training catalog has included not only in-person courses, but in some cases also completely digital offerings. As a result, we not only strengthen leadership skills, but also the virtual leadership abilities, and offer many opportunities to network. As part of our “Lead to win” performance and development process, our top-level managers receive feedback on their current performance profile and the chance to address their needs for development. We have consistent tools for performance assessment in Germany in the shape of “Compass” for employees covered by collective agreements and civil servants, and Performance & Potential Review for managers and employees not covered by collective agreements. Performance & Poten- tial Review is also used at many national companies. A MAGNET FOR GLOBAL DIGITAL TALENT As a leading European ICT service provider, we need the best minds: creative thinkers and employees with a knack for technology that want to help us design the digital transformation. We look for top talent in all countries, which also contributes to the further internationalization of our Group. Our global Employer Value Proposition showcases what distinguishes us as an employer.

EMPLOYEES TRAINING AND DEVELOPMENT 127 Digital support in learning: flexible and tailored To make learning more location- and time-independent, we equip our apprentices and students with modern laptops, smartphones and access to our Group’s media. We are continuously expanding our digital learning formats when communicating career- and study-specific exper- tise. Additionally, our apprentices and students in cooperative degree programs use the TelTec learning platform, with which they can inde- pendently plan, document and assess their learning processes. Since 2018, our apprentices have used the ePortfolio on this platform. It pro- vides them with an overview of the requirements during their period of training and study. This tool helps them plan, document and reflect on their learning modules even better. Their trainers and coaches also gain an overview of the progress they have made in their studies and devel- opment and can give them tailored recommendations. TRAINING PROGRAM FOR CYBER SECURITY PROFESSIONALS ENTERS ITS FIFTH ROUND Data security experts are still in short supply on the German labor market, which is why we launched our part-time training program for cyber security professionals (certified by the Chamber of Commerce and Industry) in 2014. Deutsche Telekom apprentices and students in cooperative study programs can apply for the two-and-a-half-year course after completion of their vocational training or course of study. If they are accepted, the program is integrated into their regular tasks and sup- plemented by topic-based and general modules in a variety of formats (classroom courses, e-learning, blended learning). Those who complete the development program receive a certificate for IT security profession- als from the German Chamber of Commerce and Industry. Given the great demand, including from other companies and public agencies, we have decided to open up our further training to employees from other organizations. The fifth year’s intake embarked on the program in 2018 and comprises ten employees from Deutsche Telekom and five participants from other companies. The verdict now that the first two years have completed the program is a positive one. Of the 20 graduates from the 2014 and 2015 intake, 19 were kept on at Deutsche Telekom. They can obtain credits in their Bachelor’s and Master’s program for the skills they have acquired as part of the further training. Existing IT occupations in Germany that require training are currently being revised and updated. The profile of the Cyber Security Profes- sional is being used as a proposition by the expert commission. ENCOURAGING AND RETAINING TALENT Dedicated, technology-minded and service-oriented employees are pivotal to the success of our business. The aim of our global talent man- agement is to identify such employees at the company, support and involve them, give them opportunities for further development and ulti- mately retain them. Global Talent Pool: Group-wide process simplifies staffing Employees planning their next career step or who want to amass experi- ence in projects can join the Global Talent Pool and present themselves there in talent profiles. HR experts and all executive staff can access the profiles posted there. With more than 1,200 employee profiles, more than a third more employees than the year before introduced them- selves on the platform during the reporting year. As in the previous year, the share of female colleagues was 25percent, while the number of international employees on the platform remained constant at 56per- cent. The platform is a useful tool for increasing talent visibility and sim- plifying staffing processes throughout the Group. The Global Talent Pool starts every summer and extends over around 12 months. It also helps us encourage employees to gain experience at different business units or national companies and in a range of functions, furthering diversity at the Group. Talent conferences offer opportunities to engage in dialog In September 2018, around 350 employees from 19 countries attended the annual talent summit. For the first time, this year’s summit was linked to an event for 300 managers. The focus was on the topic of net- working. The event offered participants the opportunity to network with around 13 business units and initiatives at Deutsche Telekom. SUCCESSION MANAGEMENT ENSURES THE COMPANY IS READY FOR THE FUTURE Top-level management plays a key role in business success. If manag- ers at that level leave the company, their position must be filled in a timely manner, with a qualified candidate. In 2017, we introduced a global systematic succession management process, which obligates around 1,800managers in executive positions to be involved in succes- sion planning. The process helps these managers to decide who could serve as their direct successor and who has the mid-term potential to take on their role. When nominating potential candidates, our execu- tives must make sure that they are aware of exactly which skills are necessary for their positions now and in the future. The process is supported by a digital platform. This year the timing of the process was aligned with the start of the “Global Talent Pool” in order to allow for the identification and promo- tion of talents with an executive potential. Within 6 weeks Talent Man- agement identified and presented 70 talents to be proposed for succes- sion and concrete executive vacancies.In 2018 4,400 potential candi- dates (DT internal and external) were evaluated in special succession meetings (25 percent of which were female professionals). As a result of the process, 82 percent of positions have at least one interim and one immediate successor, which is 10 percent more than in 2017. Since 2018 executives have been informed directly for which positions they were nominated and what their further need for development looks like. Thanks to the new nomination guidelines and the feedback process, a number of diverse and highly qualified potential successors are available when the need arises and keep the company in motion. The accompanying process to fill open executive positions ensures that the succession plans are actually implemented. This, in turn, increases commitment and employee retention. MANAGER PERFORMANCE REVIEWS CONTINUE TO BE REVISED Our “Lead to win” performance and development process is a Group- wide, systematic process for the assessment and development of our managers. Our performance review includes an annual feedback pro- cess in which employees from all hierarchy levels have had the chance since 2018 to rate the leadership behavior of top-level managers. The objective is to assess the manager’s potential and derive concrete development plans. Since 2017, we have been focusing on the manag-

EMPLOYEES TRAINING AND DEVELOPMENT 129 perform interviews, HR administration, repair computer equipment and solve technical issues, manage customer events, and so much more. They have integrated so well into the organization that TSSA decided to introduce the graduate internship in order to provide employment to the interns for another year and also because of the value that they add to the business. The In the Zone Leadership Development Program is a signature leadership development program specifically developed for TSSA in conjunction with GIBS. The aim of the program is to develop employees’ leadership competencies and organizational capabilities so as to achieve our vision. We shape the future of a connected business world and society by creating value added for our customers, employees, and communities through innovative ICT solutions in South Africa. The pro- gram not only focusses on growth for the company, but also on personal growth for each employee attending. At least 50% of the employees tak- ing part are women. The program is aligned with the T-Systems Interna- tional (TSI) leadership agenda. EMPLOYEE DEVELOPMENT AND SATISFACTION AT MAKEDONSKI TELEKOM During 2018, Makedonski Telekom ran a number of training and devel- opment programs for employees that focused on activities for expand- ing Growth Mindset. At the beginning of 2018, the company collected information about development needs and implemented a vendor selection procedure. This involved collecting information about training providers to cover different topics and organizing training sessions and team-building activities in MKT. We then launched team-building activi- ties, since this is a very productive way to foster collaboration and understanding among employees from the same units or different ones. We organized training sessions for our PMP professionals, PMP certifi- cation, and SDI certification, etc. Development of Front Line Employees Every three months, Makedonski Telekom organized training courses to develop communication skills for new employees in direct contact with customers. The training sessions are based on SDI methodology, and they provide them with outstanding and practical methodology for improving the communication skills they need and their approach to dealing with customers. The company also started the process of implementing training ses- sions in order to develop advanced sales skills in all the employees working in our shops. Before training started, the needs and challenges of our employees were analyzed. MKT also defined potential solutions for improving management and professionalism across all the opera- tions in teams and in interactions with our customers. MKT is organizing Level Up Training for about 70 employees in the B2B and B2C segment as part of the learning program: sales process and sales skills, field sales coaching, conflict resolution, and conflict man- agement. different units have taken part in this training. Moreover, training ses- sions were organized for employees on digital marketing, digital PR, and Adobe Photoshop. Talent Management Program This year the management of Makedonski Telekom identified 23 employees as valuable assets for our company. These employees were promoted as part of the Global Talent Pool and they took part in the Talent Summit 2018 held in Bonn. Leadership Development At the end of the year, Makedonski Telekom embarked on the process of implementation for F2F training sessions in leadership, responsibility, and teamwork for team leaders at the call center. The company worked on implementation of a program for developing leadership skills for managers in a complex business environment. We also implemented global leadership programs such as the Level Up pro- gram and the Open Leadership Portfolio program. Managers who have recently taken up their first MG4, MG5 leadership position in Makedon- ski Telekom took part in the LeadFirst program. Nine of them started the program to gain a clear understanding of their new role and to build a robust leadership foundation. Promotion of Digital Learning At the end of the year, we started to operate the HR Suite platform. This is a platform for digital learning. It is available for all employees in the organization and everybody has 24/7 access to digital-learning offerings tailored to the individual. This is a flexible scheme designed to acquire any necessary skills. The HR Suite digital platform provides content on PC skills (Office, Microsoft, SAP, etc.), IT (software, network, OS, database development, etc.) and business administration (soft- skills, management, project management, sales, human resources, strategy, etc.). Employees also have an opportunity to learn languages through Learnlight, a digital platform for learning English and German. Let’s Grow Initiative Employees from Makedonski Telekom were part of the biggest initiative for Growth Mindset organized in DT Europe. This initiative started in London where our CEO was part of the Learning Journey program. 123 employees from different units in MKT took part in the Growth Lab pro- gram. The participants worked together in international teams to create pilot projects in nine different areas. Three employees were members of the winning teams that presented their projects to the DT EU Manage- ment in Bonn. The topics they worked on were Digitization, FMCC, and Design EU 5G Story. Eight of our leaders are part of the Growth Leaders program. Three of our employees are part of the Influencers program. While the program is running, we work together, learn how to communi- cate better, talk about our mistakes, learn how to give and receive feed- back so as to create a beneficial working atmosphere. At the beginning of 2019, MKT is going to start the local transfer of Growth Mindset activ- ities and launch a project to create a more modern organizational cul- ture within the company. Digitization and Agile Work Makedonski Telekom is seeing a need for learning and developing dif- ferent ways of working, and diverse approaches and skills. Starting from September, the company has therefore been carrying out training for design thinking and agile methodology. Up to now, 85 employees from We recognize Best Performance This year Makedonski Telekom marked a milestone in recognizing best performance. The company created a special Program aiming at salut- ing best performers and their successful results. A culture of recogni-

EMPLOYEES DIVERSITY AND EQUAL OPPORTUNITY 131 DIVERSITY AND EQUAL OPPORTUNITY § Encouraging international diversity and intercultural experiences the number of women in managerial positions company § Percentage of women in managerial positions Social trends such as globalization, demographic developments or dif- ferent understandings of roles cannot be allowed to lead to the exclu- sion of individual groups from the labor market. Equal opportunity is not only essential to a stable society, but to our company as well. Respect- ing human individuality and harnessing individuals’ distinctive traits for joint success is just as important for our Group as developing a shared identity. OBJECTIVES MEASURES MEASURING SUCCESS § Commitment to increasing § Percentage of women at the § Filling 30 percent of manage- § Work-life balance offers ment positions with women § Multiplier and mentor programs § Percentage of employees for experts and managers § Action plan to promote inclusion § Entry-level training scheme for disadvantaged young people § Job rotation and international talent and leadership programs working part-time or on parental leave § Percentage of employees with disabilities § Percentage of disadvantaged young people starting an apprenticeship SUPPORTING DIVERSITY At our company, women and men, young and old as well as people with different abilities and cultural backgrounds from some 150 countries work together very successfully. This diversity helps us remain competi- tive around the world with good ideas and outstanding products and consolidate our position as an attractive employer. For us, diversity means that we offer our employees numerous opportu- nities to develop professionally and grow personally, regardless of their gender, age, sexual preference, health situation, ethnic background, religion, or culture. Our Group-wide Diversity Policy, the five Guiding Principles, the Group’s Employee Relations Policy as well as our “Code of Human Rights & Social Principles” form the foundation of our com- mitment to diversity. We are also a founding member of the corporate initiative “Diversity Charter” and aim to promote and use diversity both within and outside of the company. In 2018, we also signed the “European Diversity Pledge”. The pledge is part of the “Embrace Difference” initiative set up by the European Roundtable of Industrialists. More than 50 companies are among the signatories. They pledge to create an environment in which all employ- ees can achieve their full potential. As early as during the hiring process we emphasize diversity and con- sider options other than just traditional educational and life paths. Good examples of this are our entry-level training schemefor young people who are disadvantaged in terms of their social and educational back- ground and our part-time apprenticeships/degree programsfor single parents. To enable all employees to get the most out of their skills, we support a work-life balance with an extensive work-life portfolio. This includes day- care offers and assistance with caring for family members; these offers exceed legal requirements. Examples include different options for reducing working hours, the lifetime work account, and a guaranteed return to full-time work that exceeds legal requirements. At the end of 2018, 12.9 percent of employees covered by collective agreements and 15.2 percent of Deutsche Telekom civil servants throughout Germany were working part-time. The number of disabled employeesworking for us in Germany puts us well over the statutory quota of 5 percent. Equal opportunity is a particularly important issue for us - one for which we have been fighting for more than two decades. Our goal is to increase the number of women in expert and managerial positions; we want to fill 30 percent of leadership positions in middle and upper man- agement worldwide with women. To that end, we have initiated several measures. In December 2018, the percentage of women in middle and upper management was 25.4 percent (previous year: 25.4 percent); the share of women in our Group’s Supervisory Board was 40 percent (previous year: 45 percent). Our commitment to the integration of refugees into the labor marketalso promotes diversity within our company. We offer entry opportunities for refugees through an internship or apprenticeship and the “Internship PLUS direct entry” program. We offer multiplier and mentor programs to establish managers as r ole models and ambassadors who encourage diversity. Many of our employees have become actively involved in addressing various aspects of diversity, for example as members of internal initiatives such as MagentaPride, a network of lesbian, gay, bisexual, and transsexual employees, or of the numerous women’s networks that have been established within the Group thanks to their commitment. Since 2015, we have also used videos and digital workshops to raise awareness among our employees about how unconscious bias can influence their thoughts and actions. We regularly assess the effectiveness of our measures for encouraging diversity and report the findings to the Group Board of Management. SIXTH GERMAN DIVERSITY DAY: MANAGERS DISCUSS DIVERSITY AT WORK The Diversity Charter is an independent economic initiative that is supported by around 3,000 companies and institutions in Germany. The Charter’s goal is to create a work environment free of prejudice. All employees deserve respect and appreciation – regardless of gender, nationality, ethnic origin, religion or belief, disability, age, sexual orienta- tion and identity. Deutsche Telekom is a founding member of the initia- tive. As in past years, we participated in the sixth nationwide German

EMPLOYEES DIVERSITY AND EQUAL OPPORTUNITY 133 if they opt to forge a career in IT. With this in mind, T-Systems sponsors the “rising star” award for women in tech under the age of 26. Jake Attfield, HR Director at T-Systems Ltd. is on the judging panel for the awards and Alison Dodd, the new Managing Director will present the “rising star" award on the night. T-Systems views the Diversi-T Program as an important part of its strat- egy and will continue to support it in 2019. SENTIENT COMPANY PROJECT AT SLOVAK TELEKOM A key project in the field of corporate social responsibility and inclusion at Slovak Telekom over the past two years has been the launch of the Sentient Company project. Employees who come into direct contact with disadvantaged customer groups developed hard and soft skills. Training exerted an impact on 700 customer service representatives. The project focused on 3 areas: 1. Training for colleagues from customer service leading staff toward perceiving the needs of customers from disadvantaged and vulnerable groups, and the barriers they face. 2. Building an inclusive corporate culture – a campaign for all employ- ees to combat prejudice, stereotypes, leading staff to perceive the needs and barriers faced by colleagues and people from disadvan- taged groups. 3. Partnership with the Eduma non-profit organization – institutional support and collaboration in the context of emotional awareness. The ambition of the project is to move forward with the continuous process of education and to integrate the system into the adaptive process of new employees, as well as in development training for senior staff and all front-line staff. DIVERSITY & INCLUSION AT MAGYAR TELEKOM At the beginning of 2018, the Corporate Sustainability efforts of Magyar Telekom have expanded to embrace and reorganize our efforts toward enhancing Diversity Culture and Inclusion within the group of compa- nies. Magyar Telekom took a momentous step in January and launched an anonymous employee survey of perceptions about the state of D&I culture within the company. Nearly 1300 colleagues give their candid opinions on topics ranging from gender equality to perceptions of dis- crimination for vulnerable social groups (such as Roma, people living with disabilities, members of LGBTQI, single mothers, and 50+ employ- ees a non-management level, etc.). The results of this survey helped us to identify key areas for our Diversity & Inclusion plan with clear and quantifiable objectives up to 2020 ranging from corporate policy to equality-driven revision of specific internal processes along the employee experience cycle, including focus areas like recruitment and talent management. In November 2017, Magyar Telekom adapted the renewed Code of Human Rights and Social Principles of the Deutsche Telekom Group. On the basis of these reforms, the company was the first within the DT Group to launch e-learning on human rights at an all-employee level informing our employees, close partners, and student workers about our responsibilities in relation to human rights, the responsible ways to take action, and the whistleblower channels available to take a stand against suspected human-rights violations. The obligatory e-learning course was taken by more than 10 000 people and it is now part of the mandatory portfolio of courses at Magyar Telekom.

SUPPLIERS SUSTAINABLE PROCUREMENT STRATEGY 135 SUSTAINABLE PROCUREMENT STRATEGY Fundamental norms and standards Our Supplier Code of Conduct is part of the General Terms and Condi- tions for Purchasing and must therefore be accepted by our suppliers. Ethical, social and ecological principles as well as fundamental human rights are codified in this Code of Conduct. Sustainability concerns are given a weighting of 10 percent in selecting suppliers in bidding pro- cesses. The Supplier Code of Conduct is based on our overarching Group policies “Code of Conduct” and “Code of Human Rights & Social Principles”. The values and principles stated therein largely coincide with those of telecommunications provider Orange – our partner in the BuyIn procurement joint venture. In connection with their joint venture, Orange and Deutsche Telekom harmonized their Supplier Codes of Conduct in 2017 to ensure that they both now place exactly the same requirements on suppliers. The following guidelines are also binding for our suppliers: ƒ Group Policy on Avoiding Corruption ƒ Statement on Extractives ƒ List of banned substances With our Supplier Code of Conduct we have made a commitment to complying with the fundamental principles and standards set forth by the International Labour Organization, the Organisation for Economic Co-operation and Development, the Universal Declaration of Human Rights and the UN Global Compact. For our strategic suppliers who exhibit a higher CR risk, we have on-site audits conducted regularly by external auditors to check compliance with the Supplier Code of Conduct. There are still places in the world where human rights are not a respected. We may be exposed to country- and supplier-specific risks through our global procurement activities; these include, for instance, the use of child labor or poor local labor and safety conditions. Compli- ance with human rights and protection of the environment are very important to our Group. This applies to both internal and external com- pany dealings and thus likewise to our business partners and suppliers. To also ensure compliance with human rights outside of our Group, we expressly require our about *20,000 active suppliers in more than 80 countries to assume this responsibility as well. *In the past, the number of our suppliers referred to our approx. 30,000 total business relationships. We now have more precise reporting capa- bilities that allow us to specify the number of suppliers with whom we had an active business relationship in 2018. OBJECTIVES MEASURES MEASURING SUCCESS § Implementing a sustainable § Standards and guidelines § Sustainable Procurement ESG procurement strategy § Group-wide implementation by the Sustainable Procurement Working Group KPI § CR-Qualified Top 200 Suppliers ESG KPI § Employee training courses § CDP Supply Chain ESG KPI § Stakeholder engagement § Sustainability rankings § Established escalation procedure for serious cases § Monitoring supplier sustain- ability performance MANAGING SUSTAINABILITY IN PROCUREMENT PROCESSES We have been working to improve sustainability throughout our supply chain for many years. We have laid the foundation for this with our sus- tainable procurement strategy: We adhere to principles for socially and environmentally friendly procurement throughout the Group and man- age our processes with the help of internal and external performance indicators and management tools. Our sustainability criteria therefore apply to the entire procurement process, i.e. from the initial request to contract signing.

SUPPLIERS SUPPLIER MANAGEMENT 137 SUPPLIER MANAGEMENT We maintain business relationships with some 20,000 active suppliers in over 80 countries. Our relationships with suppliers are based on trust and dialog combined with performance monitoring and providing con- crete support for the implementation of sustainability standards. We have a variety of tools, methods, and measures in place to help us improve the sustainability of our supply chain. Our basic aim is to recognize the cause of any problems and to work closely together with our suppliers to resolve them. Leading up to the supplier evaluation, we classify our categories as critical or non-critical based on risk and opportunity. We have formed 14 Corporate Social Responsibility (CSR) risk criteria and four CSR opportunity criteria on the basis of expert interviews. The criteria incor- porate a wide range of sustainability aspects and risks, including risks for forced or child labor, or environmental pollution, as well as opportu- nities such as potential to reduce energy consumption. OBJECTIVES MEASURES MEASURING SUCCESS § Ensure sustainability in the sup- § Weighting sustainability § Online surveys ply chain aspects at 10 percent for bids § Supplier Code of Conduct (SCoC) § Supplier risk analysis § Results of the social audits § Sustainable Procurement ESG KPI § CR-Qualified Top 200 Suppliers § Supplier surveys and self- ESG KPI assessments § CDP Supply Chain Coverage § Supplier monitoring and ESG KPI development § Escalation process for violations IMPROVING SUSTAINABILITY IN THE SUPPLY CHAIN Depending on the risk rating and development status of the supplier relationship, we use different tools to make our supply chain more sus- tainable. When selecting a new supplier, the topic of sustainability is included in our decision-making process with a weighting of tenpercent. This creates strong incentives for suppliers to make their business more sustainable and to offer more sustainable products and services. As a rule, we use a three-step approach to minimize risks and encour- age our suppliers to improve their practices. The funnel chart illustrates the process: In the first step, all suppliers (critical and non-critical categories) are asked to accept our Supplier Code of Conduct. It places strict ethical, social, ecological, and human rights requirements on our suppliers. In addition, a risk assessment by an external audit firm is carried out as part of the supplier onboarding process. A comprehensive external investigation is performed to determine if one of our supplier compa- nies presents increased risks with regard to certain sustainability criteria.

SUPPLIERS SUPPLIER MANAGEMENT 139 Within the framework of the JAC Academy, we trained five of our key suppliers in 2018. This included not only designing and implementing internal audits in accordance with our JAC standards and rules, but also developing a deeper understanding of relevant sustainability topics for manufacturing companies (e.g., content of health and safety standards). for example, can be made visible. Once the SDP participants have successfully completed the development program, they can use it independently and, in turn, help their own suppliers to improve when it comes to sustainability issues. Our aim is to extend the impact of the program to downstream levels of the supply chain. We expect to see these companies obtain similar results to those achieved by the participants of our previous supplier program Among these suppliers we achieved not only social and ecological improve- ments but also measurable economic benefits: Better working condi- tions reduce the days of absence for employees, have a positive impact on their motivation and boost productivity. All of this also improves prod- uct quality, which in turn reduces the number of complaints regarding out products. The ecological improvements include the conservation of resources, for example, for energy and water consumption. The diagram shows the areas in which we audit the suppliers participat- ing in our program. Using the results, we work with them to develop a plan for remedying any issues. Suppliers receive support from Deutsche Telekom experts as well as professional external consultants in apply- ing these measures. All activities and results are documented so that we can gage the effectiveness of the measures employed. These are corrected, if needed. In 2018 we also established a comprehensive system of risk monitoring for suppliers in Procurement. This involves an expanded risk analysis for the existing supplier base, with the suppliers initially being classified (segmented) based on the following criteria: ƒ Procurement volume ƒ Critical components ƒ Dependence on suppliers Appropriate risk monitoring is carried out depending on the segmenta- tion result: ƒ Basic monitoring:Financial, CSR and compliance scoring is per- formed (by an external audit firm) for all suppliers within the scope of a ongoing review process. ƒ Active risk monitoring:The highest-risk suppliers are additionally monitored for all other risks occurring on a global scale (e.g., natural disasters, political risks) by means of a proactive risk monitoring system. In cases of blatant disregard of the requirements set forth in our Sup- plier Code of Conduct, we initiate an escalation process to effect fast resolution in accordance with our sustainability standards. If employees have concerns along our supplier chain regarding compliance with laws, internal guidelines, and standards of conduct, they can report these anonymously using our whistleblower portal. The portal is publicly accessible for all of our stakeholders – alongside employees of our suppliers it can also be used, for example, by customers or business partners. DEMAND AND PROMOTE: INDUSTRY-WIDE DEVELOPMENT PROGRAM FOR SUPPLIERS We collaborate as partners with our suppliers to make sure they are able to meet our high sustainability criteria. Within our multi-award-win- ning development program for strategically important suppliers, we have worked with the participants over the past few years to develop solutions for issues such as environmental protection, regulations for working hours, or health protection. In 2018, we placed our supplier program under the umbrella of the Global e-Sustainability Initiative (GeSI) ICT industry association as an industry approach. It is being con- tinued there as the “Sustainable Development Program” (SDP). In this way, we hope to help make the global supply chains for ICT products more sustainable, even beyond our own value chain. In the second half of 2018, we launched the SDP as a pilot project with four suppliers. From 2019, other ICT companies, their suppliers and sub-suppliers will then join the program. One new key feature of the SDP industry approach is an online tool that makes it easier to collect and evaluate sustainability-related data. The tool also makes it easy to measure the success of all SDP activities effectively using various KPIs. As a result, contributions toward individual sustainable development goals (SDGs),

SUPPLIERS SUPPLIER MANAGEMENT 2018 audit results 141 2018 AUDIT RESULTS In the audit program, which was established and is controlled at the Group level, a total of 117audits were carried out in 2018. As in previ- ous years, we concentrated our auditing activities on suppliers in Asia, in particular in China and neighboring countries such as India, Malay- sia, South Korea, and Thailand, as well as in Brazil, Mexico, and Eastern Europe. Audited suppliers included manufacturers in the areas of IT hardware, software, and services, as well as networks and devices. During the audits, we identified one case of bribery and consequently ended the business relationship with the supplier with immediate effect. Beyond this, no other cases of corruption or bribery nor any critical violations of compliance policies or the right to intellectual property were found. THE 2018 AUDIT RESULTS AT A GLANCE Legend: Area (Number of violations) DETAILED RESULTS Our audit activities do not include all suppliers with whom we have an active business relationship (around *20,000), but instead focus on stra- tegically important and/or particularly high-risk supplier groups. We focus on roughly 250 suppliers that are regularly audited every two to three years. The majority of these audits are conducted within the scope of the Joint Audit Cooperation (JAC). ƒ Labor standards ƒ Social standards ƒ Living standards ƒ Environmental requirements The JAC Guidelines require suppliers to grant their employees the free- dom of association and the right to collective bargaining, as well as a healthy and safe working environment. The following minimum require- ments are applicable regarding working hours: a maximum of 48 work- ing hours per week, a maximum of twelve hours of overtime each week and one day off after six consecutive days of work. We also demand a fair wage that enables employees a decent standard of living. Compli- ance with all these requirements is reviewed regularly during our on-site audits. This also includes inspection of the features and quality of the working, sleeping, and cafeteria areas. We do not require our suppliers to obtain external environmental or social certificates. If no certificates are available for the “Environment” and “Social Accountability” fields, such as ISO14001 and SA8000, we nevertheless expect comparable management systems to be used. Our auditing experience shows, however, that the majority of our relevant manufacturing suppliers have an external certificate or comparable management systems. Verification of important social and ecological aspects as well as fundamental human rights during our audits is in line with internationally recognized guidelines and standards: these include the ILO Labour Standards, the UN Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises. Of the 117 suppliers we audited in 2018 (13 of which were in accord- ance with the validated audit processes of the Responsible Business Alliance), around 24percent (29 audits) were direct suppliers and 76percent (88 audits) were tier 2, 3 and 4 suppliers – that is, indirect suppliers. The audits carried out in 2018, revealed a total of 768violations of Deutsche Telekom’s supplier requirements. In the process, a total of 594 violations were corrected in 2018, including several open improve- ment measures from previous years. Among the violations were 49 unacceptable incidents and 193critical findings; 191violations were rectified. Here are some examples of unacceptable and critical viola- tions as well as the measures taken to improve these situations. Critical findings were discovered at 49 suppliers in the area of occupational health and safety field, at seven suppliers in the area of environmental protection, at three suppliers with regard to labor practices, at 50 suppli- ers with regard to working hours, and at nine suppliers with regard to wages and performance-related remuneration. There were no critical findings in the business ethics area. As in past years, most of the viola- tions were related to occupational health and safety (47percent, com- pared to 46 percent in 2017), followed by working hours with 16 per- cent (17 percent in 2017). The business ethics area took the third spot, with 14 percent (13 percent in 2017). *In the past, the number of our suppliers referred to our approx. 30,000 total business relationships. We now have more precise reporting capa- bilities that allow us to specify the number of suppliers with whom we had an active business relationship in 2018.

SUPPLIERS SUPPLIER MANAGEMENT 2018 audit results 143 Occupational health and safety There are not enough emergency exit signs on the main routes of the sewage treatment plant to ensure proper evacuation in an emergency. This makes it difficult to find the emergency exit. 1. The entire sewage treatment plant Closed will be inspected and new signs will be installed in areas without adequa- te emergency exit signage. 2. All other areas of the company will also be checked for emergency exit signs and new signs installed if necessary. Fire alarms and alarm systems are tested by a fire safety company once a month. 1. A fire safety company checked the Closed Finding: One of the fire alarms in the hazardous waste room did not work. This means there is a lack of fire protection. During the plant tour, it was found that in the storage area for flammable chemicals and in the printing area where work involves chemicals, there was no emergency shower/eye irrigation station. Finding: The factory began operations in October 2017, even though a firefighting certificate had not yet been issued for building no. 4 (25194 square meters, completed in June 2017). Comment: The factory has completed its fire protection concept for building no. 4. Acceptance for firefighting systems was underway but the acceptance procedures were very complex. This was in violation of the following article of the fire protection law of the People’s Republic of China (2008): Article 11: For the construction of large facilities intended for use by large numbers of people or special construction projects as stipulated by the national safety authority of the State Council, the employer is required to present the fire protection documents to the fire protection department of the national safety authority for review. The law specifies that the fire protection department of the national safety authority is responsible for the result of the review. Article 13: When construction work is completed on a project that requires fire protection planning according to national fire protection standards, fire protection acceptance testing or submission of the relevant documents is to be carried out as follows: 1. or 2. For a construction project pursuant to Article 11 of the law, the employer must apply to the fire protection division of the authority for public safety for fire protection acceptance testing; For any other construction project, the employer must report successful acceptance to the fire protection division of the authority for public safety for archival purposes, and the fire protection division of the authority will conduct spot checks. A construction project that is by law subject to a fire protection inventory, but does not undergo or successfully pass the inventory may not begin operation. Construction projects that fail a random inspection may no longer be used. Finding 1: A metal warehouse with approx. 600 square meters area had just one safety exit at the time of the audit. This is in violation of the Code of Design on Buildings Fire Protection and Prevention (GB50016-2006), Article 3.8.2: Every storage site must have at least two exits. One exit is sufficient for storage sites with an area of less than 300 square meters. There must be at least two exits leading to a hallway, a stairway or outside from every zone of the warehouse. One door is sufficient for building sections with an area of less than 100 square meters. The door leading to the hallway or stairway should be a class B fire protection door. Finding 2: 20% of the emergency exits in building no. 4 had a net width of 0.75 meters. This does not meet legal requirements. Comment: The factory began implementing corrective measures prior to the final meeting. This was in violation of the Code of Design on Buildings Fire Protection and Prevention (GB50016- 2014), Article 3.7.5: The net width of the evacuation stairs should be at least 1.10 m, the net width of the evacuation route at least 1.40 m and the net width of the door at least .90 m. The width of the evacuation stairs should correspond to the number of workers on all levels. The net width of the lower stairway therefore corresponds to the number of workers on all floors. The net width of the exterior door on the first floor also corresponds to the number of workers on all floors. The net width of the door must be at least 1.20 m. The evacuation plan in the dormitories did not correspond to the actual layout. This was in viola- tion of the Code of Design of Dormitory Buildings (JGJ36-2005), Article 4.1.4: Dormitories must have an emergency evacuation plan and clearly visible evacuation signs posted. fire alarm system in this area and completed maintenance. 2. All other areas of the company will also be checked and any improve- ment measures taken immediately. Every department must identify and provi- de the appropriate safety equipment. Closed We have meanwhile received the certifica- te for the fire protection concept covering all buildings.w Ongoing 1. There are two safety exits for the Ongoing metal warehouse. 2. Modifications were made to the door width and the contract with the supplier was signed. 3. The modified doors were installed. 1. The evacuation plan was updated Ongoing and posted in the dormitories. 2. The annual internal audits will take account of this item in the future.

SUPPLIERS RESOURCE SCARCITY AND RAW MATERIALS SOURCING 145 RESOURCE SCARCITY AND RAW MATERIALS SOURCING Production of electronic devices like smartphones is harmful to the envi- ronment and requires large amounts of water and energy. Because the production facilities of suppliers and manufacturers are often located in regions where water is scarce or the population does not have sufficient access to electricity, the availability of resources plays a more significant role there than it does in countries like Germany. Moreover, valuable raw materials like metals are used in producing smartphones and other ICT products. Some metals, including tantalum, gold, tin and tungsten, are extracted from ores, some of which are extracted in the eastern part of the Democratic Republic of Congo under conditions that are inhumane and/or associated with civil war. The parties involved in conflict in the region use the profit for purposes such as financing civil wars. However, Deutsche Telekom does not man- ufacture any ICT products itself. We purchase these products from inter- national manufacturers and sell them at our stores, offer them in the context of service provision, or use them in our network infrastructure. We require our suppliers to refrain from using any of these conflict resources. We also support industry initiatives like the Responsible MineralsInitiative, which work toward a more sustainable supply chain. OBJECTIVES MEASURES MEASURING SUCCESS § Sustainable use of resources and responsible raw material procurement § Support of the Responsible § Annual reporting Minerals Initiative (RMI) § Conflict-free resources integrated into our manufactu- rer product requirements § Coltan Statement § Statement on Extractives § Research project on recycling tantalum SUPPORTING RESPONSIBLE RESOURCE EXTRACTION We require our suppliers to protect the environment and use resources responsibly. We have set forth these requirements in the document “Code of Human Rights & Social Principles”; they are also described in detail in our Supplier Code of Conduct. We require our suppliers to pro- vide information on their activities as part of a self-assessment and con- duct supplier audits to emphasize the importance of these requirements (Link to audit results). In the scope of the audits, we check whether our suppliers use an environmental management system and how they manage their energy and water consumption, as well as other factors. We also explicitly ask them about their waste management system. Handling critical raw materials We collaborate with suppliers and industry initiatives to effect responsi- ble raw materials sourcing. Although we do not purchase any raw mate- rials ourselves, we do require our manufacturing suppliers not to use any conflict minerals or other such resources in their products. Our requirements are expressly and comprehensively set out in our “Coltan Statement” and “Statement on Extractives.” These are an integral part of our contracts with manufacturing suppliers. The goal is for both our direct suppliers as well as their sub-suppliers to decrease social and societal risks that could be associated with the mining of resources. We verify implementation of our guidelines regarding conflict resources during our supplier controls as well. As a GeSI member we also actively support the ICT industry activities on the topic of Responsible Minerals Initiative (RMI). We strongly encourage our direct and indirect suppliers to utilize the RMI tools for ensuring responsible resource procurement. Tantalum is a conflict resource. Recycled tantalum, on the other hand, is considered conflict-free, Telekom Deutschland is conducting a research project on reclaiming precious metals such as gold and tantalum from outdated network infrastructure components. TOGETHER AGAINST CONFLICT RESOURCES Deutsche Telekom has supported the Responsible Minerals Initiative (RMI) since it was founded in 2008 under the name Conflict-Free Sourc- ing Initiative (CFSI). RMI is the largest business initiative for responsible raw materials sourcing. Its objective is to identify conflict resources and prevent their extraction and sale. RMI is based on a working group that was founded in 2008 by the Global e-Sustainability Initiative and the Responsible Business Alliance industry associations (Extractives Working Group) to address sustaina- ble raw materials extraction. Since then, the number of metal process- ing companies and smelters participating in RMI has continued to grow. A total of 258 of these companies have been audited in compliance with the standard audit protocol (as of December 2018).

CLIMATE & ENVIRONMENT CLIMATE STRATEGY 147 CLIMATE STRATEGY One of our goals is to reduce the negative environmental impact of our business activities. One important milestone is our climate target. By the year 2020, we are planning to reduce the absolute amount of CO2 emis- sions we produce by 20percent compared to the base year 2008 (excluding T-Mobile US). That is why we are investing in energy-efficient network technologies, for example, and increasing our proportion of renewable energy. In 2018, we developed a new climate goal for the period beyond 2020. This new goal was only adopted in 2019 and will lead to a further significant reduction in our emissions in the period to 2030. Many of our products and solutions also help our customers reduce their CO2 emissions and thus make a significant contribution to climate protection. The GeSI SMARTer2030 study shows that information and communications technology may be part of the solution in the fight against climate change. OUR INTEGRATED CLIMATE STRATEGY We designed our integrated climate strategy in line with our Group strat- egy. This is how we ensure our climate protection measures are closely connected with our core business. We have defined objectives and/or key performance indicators for each of the four aspects of our climate strategy (CO2 emissions, renewable energy, energy efficiency, and sus- tainable products). CO2 emissions We record all direct and indirect emissions using the globally recog- nized Greenhouse Gas (GHG) Protocol. The goal is to reduce our emis- sions by 20percent by the year 2020 compared to the base year 2008 (excluding T-Mobile US). As we implement our measures to reduce CO2 emissions, we are focusing on areas with especially high energy con- sumption, such as our networks and data centers. This has already allowed us to moderately reduce our emissions over the past few years (excluding T-Mobile US), despite rapidly growing data volumes and the necessary network build-out. At the same time, we are expanding our proportion of renewable energy. However, the majority of our overall emissions are accounted for by indirect emissions (Scope 3 emissions). That is why we are including our suppliers in our climate protection measures and also helping our customers reduce their CO2 emissions with relevant products and services. Renewable energy We are researching and evaluating various options to increase our pro- portion of green energy. Possibilities include purchasing energy certifi- cates from renewable sources and using cogeneration (“CHP”) plants to generate our own renewable energy. Some national companies are setting a great example: T-Mobile Austria and OTE in Greece obtained 100percent of their electricity from renewable sources in 2018. When purchasing electricity, we take a variety of sustainability factors into consideration on a Group-wide level. These include, for instance, the average emission factor of the electricity mix (i.e., the amount of emis- sions for every kilowatt hour of electricity used) and the proportion of renewable energy. These parameters help us make our energy mix more transparent and increase the share of energy obtained from renewable sources at our company. Energy efficiency Because the operation of our network infrastructure calls for a consider- able amount of energy, we are investing in modernization and energy- efficient technology. For instance, we are migrating our network infra- structure to IP technology, which is not only more powerful, but also consumes less electricity than existing technologies. In addition, we are working to process data traffic from no more than a few, particularly effi- cient data centers. Higher energy efficiency also always brings a reduc- tion in CO2 emissions. In order to measure our progress, we use two key performance indicators (KPIs). They show the relationship between our energy consumption or carbon footprint and transported data volume. Sustainable productsand enablement Many of our products and services provide sustainability advantages. They can help reduce energy consumption and CO2 emissions, improve healthcare, and make logistics more efficient. Using the “Sustainable Revenue Share” KPI, we record the proportion of our overall sales accounted for by sustainable products. “Sustainable products” are products that provide sustainability advantages and that do not entail any significant sustainability risks. We also use our “Enablement Factor” ESG KPI to correlate our emissions with the potential savings for our customers. This helps us evaluate our overall performance in relation to climate protection.