The ratings on Germany's largest telecommunications services provider Deutsche Telekom AG (DT) primarily reflect the group's solid business position in a number of markets. DT's operations constitute a diversified base of strong underlying free cash flow generation, with a weighting toward Germany and the U.S. The ratings also benefit from DT's continuing substantial market position in Germany, supported by incremental growth in the broadband market, although this slowed over 2009. In addition, the group operates a measured financial policy that includes guidance for leverage--to a range of 2.0x-2.5x reported net debt–to-EBITDA. However, the ratings on DT do not have the headroom to sustain full use of this leverage guidance. The ratings are constrained by the hurdles of overhauling DT's cost
