Deutsche Telekom Partners With Microsoft to Launch IPTV Services

Agreement will provide Deutsche Telekom customers with a platform for a range of special-interest channels and compelling TV services.

BONN, Germany, and REDMOND, Wash. — March 21, 2006 — Deutsche Telekom AG has reached agreement with Microsoft Corp. on an alliance to deliver Internet Protocol television (IPTV) services to consumers across Germany. The contract will enable Deutsche Telekom Group to deliver next-generation television, as well as complementary interactive services and a range of entertainment products over its VDSL broadband networks. Deutsche Telekom will use the Microsoft TV® IPTV Edition software platform to offer these services. Microsoft will support Deutsche Telekom with joint marketing, in addition to marketing by Deutsche Telekom, to help develop IPTV in Germany. The agreement reached with Deutsche Telekom is Microsoft’s largest IPTV contract in Europe to date and its second largest worldwide.

The platform will enable customers to receive regular TV programs as well as advanced television services including standard- and high-definition programs, interactive TV, digital video recording and video on demand. An onDemand Collections feature will allow viewers to access appealing content packages including selected feature films, TV series or documentaries at the touch of a button.

IPTV services will be delivered through the new VDSL network, which is currently being extended by T-Com. This network is expected to permit bandwidth of up to 50 Mbit/s and is planned for launch starting mid-2006 in 10 major German cities including Berlin, Hamburg, Cologne and Munich.

“In recent months, the experts at T-Online have run the Microsoft TV platform through extensive tests, and we are convinced that we will be able to offer excellent-quality IPTV services that will expand as we need them to,” said Kai-Uwe Ricke, chairman of the Board of Management for Deutsche Telekom AG. “IPTV delivered via VDSL will enable better, more service-oriented, more interactive and, above all, more customized television. With this advanced television service, Deutsche Telekom and Microsoft are writing another chapter in our longstanding cooperation, tapping new markets and together exploring exciting new growth opportunities.”

The Microsoft TV IPTV Edition software platform will enable Deutsche Telekom to offer its customers a better television experience, including a wide range of special-interest channels and compelling pay-TV programs, both live and on demand. Integrated personal video recorder functionality will enable viewers to “time shift” programs at their convenience, pausing live shows or recording them to enjoy later.

The Microsoft TV IPTV Edition platform will also enable viewers to interact with television programs. Unlike many broadcast interactive TV services available today, interactive TV on IPTV leverages the always-connected, two-way, broadband network to deliver richer interactive TV capabilities. This could include applications such as voting, accessing sports scores and league tables, and participating in competitions to win prizes.

“Today’s announcement represents Microsoft’s largest IPTV agreement in Europe to date and is a very significant milestone in our long-standing relationship with Deutsche Telekom,” said Steve Ballmer, chief executive officer of Microsoft. “Working together, Microsoft and Deutsche Telekom will help create a revolution in TV entertainment for consumers across Germany. With its rapidly growing customer base, and the power of next-generation technologies like IPTV, Deutsche Telekom has the potential to deliver exciting new connected-entertainment services across the range of consumer devices in the home.”

About Deutsche Telekom

Deutsche Telekom is Europe’s largest communications company and one of the largest communications carriers worldwide based on 2005 revenues of 59.6 billion Euro. The company is active in the strategic areas Broadband/Fixed-network (T-Com and T-Online), Mobile Communications (T-Mobile) and Business Customers (T-Systems).

For more information about Deutsche Telekom, visit www.telekom.de/international.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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