MUNICH, 6 September 2019

Telefónica Deutschland has signed the German mobile network pact for LTE expansion in return for improved payment terms for 5G spectrum

In the summer of 2018, the federal government, local authorities and network operators signed a declaration of intent on accelerating the LTE expansion in Germany. Today all four mobile network operators signed a national mobile network pact with the federal government to advance Germany's digital transformation.

The signed agreement stipulates that the network operators will commit themselves to further rollout targets. By the end of 2020, 99% of households are to be supplied with nationwide LTE and by the end of 2021 99% per federal state. Telefónica Deutschland will build 333 additional mobile radio sites in white spots by the end of 2021.

In return, politicians have committed themselves to promoting investment. This includes, in particular, improved payment terms for the 5G frequencies auctioned, which gives the company a significant financial advantage. Payments for the spectrum costs from the 2019 5G auction can be deferred with instalment payments to be made between December 2019 and 2030.

In the 5G spectrum auction, Telefónica Deutschland acquired following licenses for which we will now benefit from the following guaranteed instalment payments

- 70 MHz of 3.6 GHz spectrum for a total amount of EUR 1.044 billion: 12 instalments within 12 years after due date (31.12.2019)

- 10 MHz of 2.1 GHz spectrum (availability in 2021) for a total amount of EUR 211 million: 10 instalments within 10 years after due date (31.12.2020)

- 10 MHz of 2.1 GHz spectrum (availability 2026): 5 instalments within 5 years after due date (31.12.2025)

The Federal Government offered improved terms of payment to every successful bidder who in return was willing to enter into additional rollout commitments. Telefónica Deutschland is firmly convinced that the digitisation of Europe's largest economy can succeed only with the close cooperation of all parties involved.

The agreement further enhances our financial flexibility and is thus very beneficial for Telefónica Deutschland. We reiterate our full-year 2019 guidance and the mid-term targets and will provide transparency on 5G investment requirements and a dividend update with H2 2019.

More Information:
Telefónica Deutschland
Investor Relations
Georg-Brauchle-Ring 50
D-80992 München
t +49 (0)89 2442-1010
f +49 (0)89 2442-2000
e [email protected]