Swisscom 94% Peter Wagner Year established 1991

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1 9. DEBITEL AG 9.1 COMPANY INFORMATION Exhibit 21 debitel at a glance Shareholders Public Swisscom 94% CEO Peter Wagner Year established 1991 Revenue billion International activities France, Netherlands, Denmark, Slovenia. Headquarters Stuttgart Customers March million (7.4 million in Germany) Employees March ,710 debitel AG was established in 1991 and is based in Stuttgart. It has grown to be one of Europe s largest telecommunications carriers and is a market leader in mobile, fixed-line and Internet convergence products. Its activities span Europe and it has operations in Denmark, France, the Netherlands and Slovenia. debitel is represented in over 7000 points of sale in Europe. In Germany, debitel attracts over 10,000 new mobile customers every day, while in Europe, the customer base of the debitel group increases by around 15,000 every day. debitel AG has been quoted on the stock exchange since the end of March In January 2001, Swisscom exercised its option with Daimler Chrysler Services AG to buy the latter s 10% holding in debitel for SFr 470 million. Then in July 2001, Swisscom acquired Metro Vermogensverwaltung s 10% holding in debitel AG for SFr 460 million. The acquisitions brings Swisscom s stake in debitel to 94%. debitel is the biggest network-independent telephone company in Europe. Most of its revenue is generated by its mobile operations in Germany where it is the third largest mobile operator behind Deutche Telekom s T-Mobile (D1) and Vodafone s Mannesmann Mobilfunk (D2). The company has a dense and highly differentiated distribution network. In 2001, it had over 5,200 points of sale in Germany and about 7,000 sales partners in the whole of Europe. It markets its products mainly through Website: 61

2 its sales partners Metro-Group, EP:ElectronicPartner, Photo Phorst, Mercedes-Benz, Bosch specialist retailers, Selectric and Chris Keim Com, Ruefach and BMW. With the increasing convergence of mobile telephony and the Internet, the company is becoming more involved in the areas of the mobile Internet and mobile e-commerce (m-commerce). In September 2000, debitel acquired a 4.8% equity holding in paybox.net, Deutche Bank s secure mobile payment system, and in October, acquired a strategic 15% equity holding in Jamba!, a popular German Wireless Access Protocol (WAP) Internet portal. At Germany s Third generation mobile system (3G) licence auction in August 2000, debitel chose to retain its network-independent status when it withdrew from bidding. Instead, in first half 2001, it signed agreements with UMTS licence holders T-Mobil D1, Mannesmann Mobilfunk D2 and Dutch KPN Telecom s E-plus Mobilfunk to gain access to their 3G networks when they become operational in debitel also offers telecommunications services through subsidiaries in Holland, France, Denmark and Slovenia. See Chapter 9.2 Subsidiaries. In May 2001, the company sold its 48% stake in debitel Belgium to Mobistar. For information on these other key companies, see: Deutsche Telekom AG, chapter 10, page 67; Mannesmann AG (Defunct) at Vodafone Group plc, chapter 37, page 274; Swisscom AG, chapter 24, page 175. For more information about the German markets, see separate report: Germany Key Statistics and Telecommunications Market Overview at Year 2001 results Revenue decreased 3% to 2.52 billion, leading to a gross margin of 387 million (up 6%) and a net profit of 48 million (up 20%). The reporting segments have been rearranged so that fixed-line services that are offered to mobiletelephony customers have been transferred to the Mobile Telephony segment. The new Mobile Services segment consists of the former Internet business, the debitel MessageLine Short Message Service (SMS) platform and the development of value-added services in the area of mobile information and communication packages (for example, the Jamba! portal). These activities are carried out by Midray (formerly debitel Network Services). Mobile telephony was down 8%, almost entirely due to the weaker prepaid business. With the acquisition and further development of a technical platform for the operation of debitel MessageLine in 2001, Mobile Services revenues increased 35%. International revenues increased 12%, with all international operations being profitable. Debitel Belgium was sold at the end of May 2001, and contributed revenues of 15 million for the first five months of the year. Table 30 Revenue for years ending December Year Revenue ( billion) Website: 62

3 Table 31 Revenue by segment 2001 Region Proportion Annual change Germany 72% -8% Mobile telephony 70% -8% Mobile services 2% +35% International 28% +12% Table 32 Revenue (Germany) by activity 2001 Activity Proportion Annual change Mobile telephony 77% -1% Fixed-line telephony 2% -8% Hardware and commissions 19% -40% Internet 2% +34% Company history 1991 to Company founded Offered mobile communications services in Germany Founded first foreign subsidiary, debitel France Acquired Europe s No 2 network-independent company, Bosch Telecom Services Founded debitel Netherlands Founded debitel Belgium Founded debitel Denmark Commenced marketing fixed-line services in Germany; Acquired 49% stake in Freecom; Acquired Dutch mobile company Cellway; Founded debitel Slovenia; Enters Internet business through Primus-Online and Metronet Internet services marketed under debitel brand; IPO on Frankfurt Stock Exchange; Swisscom acquired 74% of debitel; dns Internet business commenced operations Contracted with Tesion to supply fixed-line services; Acquired 4.8% of mobile secure payment company paybox.net; At debitel s request, Germany s telecom regulator began proceedings to open up Deutche Telekom s local phone network; Acquired 15% equity participation in popular German WAP portal Jamba! Website: 63

4 9.2 SUBSIDIARIES Organisation debitel AG: debitel Vertriebs - 100%; PP-Mietund Verwaltungsgesellschaft - 100%; Midray - 100%; Debitel France - 100%; Télécom Option - 50%; debitel Dangaard France - 65%; Debitel Danmark %; Dansk GSM Services - 100%; DLG debitel - 50%; debitel Telekomunikacije Ljubljana - 52%; debitel Nederland - 100%; Talkline Nederland - 100%; Debitel Shop - 100%; Dangaard Telecom Holding %; debitel Dangaard France 35%; Debitel Multimedia - 50%; debitel Austria Kommunikationstechnik - 100%; debitel España - 100%; Jamba! - 15%; paybox.net - 4.8% debitel Nederland debitel Nederland was founded in 1995 with a 60% equity investment by debitel. In 1999, the company doubled its market share to about 19% by acquiring rival Cellway (Martin Dawes Telecommunications Netherlands) making it the largest independent telecoms company in the country. In July 2001, debitel became the sole owner by acquiring SAIT Radio Holland s 40% share. See separate reports: the Netherlands at for further information about the country s telecommunications market debitel France Founded in 1993, debitel France, a wholly-owned subsidiary, was the first operation outside Germany. In 1999, the company reached cooperation agreements with France Télécom Mobiles and SFR in retail distribution and customer management. In 2001, debitel France acquired a 50% stake in the TélécomOption retail chain, with more than 20 outlets, and continued to open its own shops within the framework of the Village Télécom partnership. In May 2001, debitel France and Dangaard Telecom Holding signed a joint-venture agreement to create a new 65%:35% company to distribute and service handsets and accessories. More information about the French telecommunications market is available, see separate reports at France Key Statistics and Telecommunications Market Overview; France. Website: 64

5 9.2.4 debitel Danmark debitel Danmark, in which debitel holds a 78% stake, started operations in August 1997 as the first independent telephone company in Denmark. Despite a high penetration rate, debitel Danmark succeeded in achieving a market share of about 6% by end See separate reports: Denmark at for information about the Danish telecommunications market debitel Telekomunikacije Ljubljana The 52% owned company, debitel Telekomunikacije Ljubljana, commenced Slovenian operations in 1998, and was the first independent service provider in South-East Europe. It achieved 3% market share in its first two months of operation, with 120 points of sale. At end-2000, market share rose to around 5% and the company became the second largest mobile operator in Slovenia. For more information on the telecommunications market in Slovenia, see separate report: Slovenia at debitel Network Services debitel Network Services (dns) provides Internet access for the debitel group. The service is free debitel customers. dns specialises on the B2B business-customer segment providing complete mobile system platforms. It has industrial and commercial clients in the finance, automotive, distribution and service sectors. 9.3 OPERATIONS Fixed-line telephony debitel buys access from Deutche Telekom s phone network and re-sells call minutes at its own tariffs. Deutche Telekom (DT) has 98% control of the last mile of network access for local calls and rival telecom operators complain that it has restricted competition in this area. In November 2000, the German telecoms regulator, German Regulative Authority for Telecommunication and Post (RegTP), began proceedings against DT and ruled that DT must provide local-loop services for resellers. At June 2001, DT still had not implemented the ruling. As a result, debitel has positioned its fixed-line service in Germany as a supplementary service for its mobile-telephony customers Mobile telephony The majority of debitel s revenues come from its German mobile market, largely due to its effective marketing through over 5,200 points of sale and around 7,000 sales partners which include Metro- Group, EP:ElectronicPartner, Photo Phorst, Mercedes-Benz, Bosch specialist retailers, Selectric and Chris Keim Com, Ruefach and BMW SMS debitel s MessageLine service offers mobile customers an inexpensive SMS service spanning all networks via its own short-message centre. The service also offers a short fax service, an gateway and information. Use of MessageLine increased by 460% in Website: 65

6 WAP debitel reported that the use of its WAP services has been continuously increasing since the CeBIT 2001 trade fair, the most popular applications being information on share prices, news, weather and traffic reports. To build the customer base, in October 2000, debitel acquired a strategic 15% equity holding in Jamba!, a popular German WAP portal with a mixture of information and entertainment Internet access Internet access is provided free to debitel customers through its subsidiary debitel Network Services (dns) which had 110,000 Internet customers by end M-commerce In September 2000, debitel moved into the mobile commerce area with a strategic 4.8% investment in paybox.net, a Deutche Bank secure payment system. debitel intends to gradually build up a share of 40% in paybox.net s subsidiary, paybox Deutschland, which was founded in August. By the middle of 2002, debitel plans to attract around 1.3 million customers to paybox Deutschland UMTS debitel entered the bidding for Germany s Universal Mobile Telecommunication System (UMTS) licence auctions in August However, it later withdrew following financial concerns. debitel decided instead to become a Mobile Virtual Network Operator (MVNO) offering services through the networks of UMTS licensed operators. In the first half of 2001, debitel secured its future position in the UMTS market with agreements and letters of intent with D2 Vodafone Mannesmann Mobilfunk, D1 Deutche Telecom T-Mobil and Dutch KPN Telecom s E-Plus, the three largest network operators in Germany. In preparation for UMTS network launches in around 2003, debitel intends to develop new UMTS applications and services to position itself as an enhanced service provider. See separate report: Germany Wireless Communications at Customer care debitel places great importance on customer care. Call centres are well staffed throughout Germany, particularly in Stuttgart, Ettlingen and Saarbrucken. A fourth major call centre was launched in Kaiserslautern in late The company offers customers a Confidence Guarantee, replacing handsets every two years, and discounted Family Tariffs. 9.4 OTHER DEVELOPMENTS Year 2001 January Swisscom exercised its option with Daimler Chrysler Services AG to buy the latter s 10% holding in debitel. Website: 66

7 April Signed agreement with Vodafone s Mannesmann Mobilfunk D2 network to access its UMTS network. July Swisscom acquired Metro Vermogensverwaltung s 10% holding in debitel. In cooperation with webmiles, launched a bonus program to reward customer loyalty. May Sold its 48% stake in debitel Belgium subsidiary to Mobistar, Belgium. Made an agreement with Deutche Telekom s T-Mobil D1 network to gain access to its UMTS network. June Made a deal with Dutch KPN Telecom s E-Plus network to gain access to its UMTS network. July Increased equity holding in debitel Nederland to 100% by acquiring SAIT Radio Holland s 40% share. October debitel Nederland acquired the Dutch Talkline, which has 160,000 customers and an annual revenue of 180 million. November debitel and t-mobile signed a cooperation agreement relating to UMTS. December debitel France agreed to acquire the French specialised retail chain Videlec. 9.5 CONTACT DETAILS debitel AG Schelmenwasenstr Stuttgart Tel: GERMANY Website: 67