Strong market position and relatively stable earnings at core German fixed-line and mobile businesses. Strong cash-generative business with ongoing emphasis on operating and capital efficiency. Good growth prospects in U.S.-based mobile business due to favorable demographics of U.S. mobile market and strategic clarity regarding U.S. presence. Measured financial policy that led to significant debt reduction in 2004. Still-leveraged financial risk profile following significant debt-funded investments in second- and third-generation wireless operations, with little ratings headroom for large-scale acquisitions. Increasing competitive pressures in both fixed-line and mobile markets following regulatory intervention. Threat of continuing migration of voice traffic to mobile networks as the price differential between fixed and mobile calls reduces. This risk is partially hedged, however, by the group's ownership
