1. ===!"§ Deutsche Telekom Deutsche Telekom AG Corporate Innovation Deutsche Telekom Key Note TeleSoft EcoSystem Meeting Dr. Heinrich M. Arnold Vice President, Deutsche Telekom, Head of New Products and Services Laboratory October 29, 2004

2. Page 1 Agenda Deutsche Telekom Corporate Innovation at Deutsche Telekom Venture Capital Partnering as a Driver for Innovation

3. Page 2 Deutsche Telekom 4 Business Divisions: T-COM: Fixed line communication T-MOBILE: Mobile communication T-SYSTEMS: Systems integration, Outsourcing, IT-Services T-ONLINE: ISP, portal services Facts & figures (2003) Revenue: 55.8 Billion Euro EBITDA: 18.5 Billion Euro Employees: 251 000 Phone lines: 57.9 Million Mob. Subs.: 66.2 Million One of the leading telecommunications operators worldwide. Become leading connectivity provider of fixed and mobile broadband services Integrated telecommuni- cations operator

4. Page 3 Corporate initiatives Perfectly positioned to generate future growth. Innovation Quality Efficiency

5. Page 4 Agenda Deutsche Telekom Corporate Innovation at Deutsche Telekom Venture Capital Partnering as a Driver for Innovation

6. Page 5 Business impact of innovation Cost savings, enhanced and new business define requirements for innovation in an increasingly competitive market. Today‘s Business EBIT Market  Internet telephony  Fixed/mobile substitution  Saturation New Competition  Device manufacturers  Service solutions embedded in devices  Alternative operators  Google, Ebay… Enhanced Business Increasing quality and adoption of existing services by enhancing usability and seamlessness New Business The cost to performance ratio of the production platform has to be optimised continuously Enable new products and services to better satisfy individual customer requirements Threats Cost savings Organic growth (number of Subscribers and ARPU) is slowing down.

7. Page 6 Defining the focus DT’s view on innovation is based on “4 Is”: intuitive usability, integrated communication, intelligent access, and infrastructure development. Develop Early Recommendations to Enable Future Business Examples: DSM and WiMAX to complement DSL Methods for Cost-efficient network- enhancement Federated ID-Management required Full Seamlessness between networks Intelligent profiling across applications Derive Corporate R&D-Portfolio Enhanced User-interfaces Pervasive Communication Multi-Access Service Framework Tracking & Tracing Overarching AAA Broadband Wireless Access NGN / GSN Integrated Communication Innovation Activities in and across Divisions Intuitive Usability Infrastructure Development Intelligent Access

8. Page 7 Focus of strategic development Emerging Technologies; Architectures and Services; Next Generation Packet Interconnection Machine-2-Machine Communication; Security; Personal Communication Assistant; “Information Tags” Automatic Equipment Recognition; Smart Devices; Future Comm. Environments Emerging Technologies and Architectures; Applications & Business Models for WiMAX; DxB; Broadband Mobility “Always Best Located” Scenarios; Evaluation of T&T Technologies Value/New Business of MASF; Local networking technologies; Content Adaptation Value and New Business of Overarching Solutions; Relevant Biometrical Technologies; AAA Solutions Overarching AAA Enhanced User Interfaces Multi-Access Service Framework Broadband Wireless Access Tracking and Tracing Pervasive Communication Next-Generation-Networks/GSN Project Fields Permanent monitoring and updating Currently relevant topics Derived from innovation strategy, current focus is on 7 project fields. MASF-Demonstrator, T-Box, Content Post Production VoiceIdent; ID & Role Management BroadWave; CorWin Permission Tracking & Tracing Ongoing projects Customer Care Automation; Future User Interfaces GSN+ RFID Business Models

9. Page 8 Stakeholders in innovation Technology & Platforms (ZB TP) Divisions T-Venture Applications/ Products/Services Process-supporting IT platforms Network & IT platform technology (including OSS) Evaluation (projects/pilots) Introduction/ deployment Operations "Run""Build""Plan" Early technologies/ future business models Innovation Management (ZB I) Corporate units and divisions have complementary responsibilities.

10. Page 9 Agenda Deutsche Telekom Corporate Innovation at Deutsche Telekom Venture Capital Partnering as a Driver for Innovation

11. Page 10 Service provider and precursor for innovation transfer. T-Venture‘s role in DT‘s innovation  Investment strategies as platforms for ongoing fund business - definition of investment areas based on defined market segments  Focus on innovation - leveraging operational business through venture investments into defined investment areas to  support growth strategies of Deutsche Telekom‘s Business Units  facilitate and leverage innovation transfer for Central Unit Innovation (Corporate Development) through corporate fund  Complement and enhance Business Unit‘s view through pro-active scouting  Continuous stimulation – new investment areas/opportunities Service Provider Precursor

12. Page 11 Corporate VC fund on top of four existing divisional funds to support corporate innovation activities Access to innovation activities in start-up companies in relevant areas of technology Optimal usage of T- Venture´s presence in USA Active partnering with a strong and well networked VC in Silicon Valley Leveraging the corporate fund Corporate innovation activities to be supported by VC Selection process started in April 2003 10 candidates addressed by T-VoA, all showed initial interest Intensive talks with all candidates about mutual benefits as well as strategic directions  3 VC firms considered "First Cut"  3 VC firms considered "worthwhile to continue talks"  4 VC firms considered as "not the right partner" for T-VoA Requirements for corporate fund

13. Page 12 Telesoft is by far the most promising partner: Excellent performance Investment portfolio so far has ideal focus Telesoft’s future plans are ideal complement and can be supported by T-Venture Telesoft offers excellent value for Corporate Fund investment Telesoft shows high interest to partner with T-Venture Selecting the right partner TeleSoft emerged as the partner of choice after thorough due diligence with two candidates. Driving the partnership: T-VoA‘s investment director works out of Telesoft‘s office in San Mateo T-Venture‘s investment director for the corporate fund is well connected into the corporate R&D activities