General Matters Relating to U.S. Federal Income Tax Discussions

As used in these discussions, the term "U.S. holder" means, before the merger, a beneficial owner of VoiceStream common shares or Powertel shares, as applicable, or an employee stock option to acquire such shares, and, after the merger, a beneficial owner of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares or VoiceStream common shares, as applicable, who is for U.S. federal income tax purposes:

- a citizen or resident of the United States;

- a corporation created or organized in the United States or under the law of the United States or any state or the District of Columbia; or

- a partnership, trust, or estate that is treated as a United States person.

These discussions do not address all aspects of U.S. tax law that may be relevant to a U.S. holder in light of his particular circumstances or who is subject to special provisions of such law. For example, these discussions do not address all aspects of U.S. tax law that may be relevant to U.S. holders:

- who are liable for alternative minimum tax;

- who hold their VoiceStream common shares, Powertel shares, Deutsche Telekom ADSs, or Deutsche Telekom ordinary shares as part of a straddle, hedge, synthetic security, conversion transaction or other integrated investment composed of one or more other investments;

- whose "functional currency" is not the U.S. dollar; or

- who are financial institutions, insurance companies, tax-exempt organizations, traders in securities that elect mark-to-market accounting treatment, or broker-dealers.

In addition, these discussions are limited to U.S. holders who hold their VoiceStream common shares, Powertel shares, Deutsche Telekom ADSs or Deutsche Telekom ordinary shares as capital assets. The discussion also does not address U.S. state or local taxation or taxation by countries other than the United States and Germany.

The U.S. tax discussions are based on existing U.S. federal income tax law, including statutes, regulations, administrative rulings, and court decisions, all as in effect on the date of this proxy statement/prospectus. All of these authorities are subject to change, or change in interpretation, possibly with retroactive effect. These discussions assume that each merger will be completed in accordance with the terms of the relevant merger agreement. Any change in any of the foregoing authorities or failure of the assumption to be true could alter the tax consequences discussed below. The parties will not request, and none of the mergers is conditioned on, a ruling from the Internal Revenue Service as to any of the U.S. federal income tax consequences of such merger. As a result, there can be no assurance that the IRS will not disagree with or challenge any of the conclusions set forth in the discussions.

In these discussions, when we refer to the completion of any of the mergers, we mean the effective time of those mergers, which occurs when a certificate of merger is filed and becomes effective.

Each VoiceStream shareholder and Powertel shareholder is urged to consult his own tax advisor as to the U.S. federal income and other tax consequences to him of the relevant merger, including the income tax consequences arising from his own unique facts and circumstances, and including any estate, inheritance, gift, state, local or non-U.S. tax consequences of the relevant merger.

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DEUTSCHE TELEKOM/VOICESTREAM MERGER TO U.S. HOLDERS OF VOICESTREAM COMMON SHARES

Subject to the limitations and qualifications set forth under "-- General" and in this section, the discussion in this section represents the opinion of Jones, Day, Reavis & Pogue, tax counsel to VoiceStream, and Wachtell, Lipton, Rosen & Katz, special counsel to VoiceStream, as to the material U.S. federal income tax consequences of the Deutsche Telekom/VoiceStream merger to U.S. holders of VoiceStream common shares. Each counsel has confirmed this opinion to VoiceStream.

Tax Opinion Condition to Closing

The obligation of VoiceStream to complete the Deutsche Telekom/VoiceStream merger is conditioned on the receipt of an opinion from tax counsel to VoiceStream and/or special counsel to VoiceStream substantially to the effect that the Deutsche Telekom/VoiceStream merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code and that each transfer of property to Deutsche Telekom by a shareholder of VoiceStream pursuant to the Deutsche Telekom/VoiceStream merger will not be subject to Section 367(a)(1) of the U.S. tax code. Counsel's tax opinion will be based on assumptions noted in the opinion, including an assumption that any "five-percent transferee shareholder" of Deutsche Telekom, as defined in Treasury regulations promulgated under Section 367(a) of the U.S. tax code, will file a "gain recognition agreement" as defined in such regulations, and on factual representations of VoiceStream and Deutsche Telekom contained in certificates signed by officers of VoiceStream and Deutsche Telekom to be delivered at the time of the Deutsche Telekom/VoiceStream merger. VoiceStream does not intend to waive the receipt of its counsel's opinion as a condition to its obligation to complete the Deutsche Telekom/VoiceStream merger, and will not waive the receipt of an opinion as a condition to its obligation to complete the merger without recirculating this document in order to resolicit stockholder approval. Counsel's opinion will not be binding on the IRS or any court.

It is assumed for purposes of the remainder of the discussion in this section that both counsels will deliver an opinion to VoiceStream at closing that satisfies the requirements set forth in the prior paragraph.

U.S. Holders Whose Merger Consideration Does Not Consist Solely of Cash

For U.S. federal income tax purposes, the Deutsche Telekom/VoiceStream merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code and each transfer of property to Deutsche Telekom by a shareholder of VoiceStream pursuant to the Deutsche Telekom/VoiceStream

merger will not be subject to Section 367(a)(1) of the U.S. tax code. Accordingly, a U.S. holder of VoiceStream common shares whose merger consideration does not consist solely of cash:

- will not recognize any loss upon his receipt of merger consideration in the Deutsche Telekom/VoiceStream merger, and

- will recognize gain upon his receipt of merger consideration in the Deutsche Telekom/VoiceStream merger equal to the lesser of the gain realized, if any, with respect to each VoiceStream common share exchanged and the cash, if any, received for the VoiceStream common share.

The amount of gain realized with respect to each VoiceStream common share exchanged will equal the excess of:

- the sum of the fair market value at the completion of the Deutsche Telekom/VoiceStream merger of the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares and the cash, if any, received for the share, over

- the U.S. holder's tax basis in such share.

As discussed further below, different rules apply to any shareholder of VoiceStream who, immediately after the Deutsche Telekom/VoiceStream merger, will be a "five-percent transferee shareholder" of Deutsche Telekom, as defined in Treasury regulations promulgated under Section 367(a) of the U.S. tax code, and to any cash received in lieu of fractional shares in the Deutsche Telekom/VoiceStream merger. Any recognized gain generally will be capital gain, and generally will be long-term capital gain with respect to VoiceStream common shares held by the U.S. holder for more than 12 months at the completion of the Deutsche Telekom/VoiceStream merger. In some cases, if the shareholder actually or constructively owns Deutsche Telekom ADSs or Deutsche Telekom ordinary shares other than those received as a result of the Deutsche Telekom/VoiceStream merger, the recognized gain could be treated as having the effect of the distribution of a dividend, under the tests set forth in Section 302 of the U.S. tax code, in which case such gain would be treated as ordinary dividend income.

The aggregate tax basis of the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received by a U.S. holder in the Deutsche Telekom/VoiceStream merger, including any fractional interests to which the U.S. holder would be entitled but for the special treatment of fractional interests described below, will equal the aggregate tax basis of the VoiceStream common shares exchanged for the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares, increased by the amount of gain, including any gain that is treated as a dividend, recognized by the U.S. holder as a result of his exchange of VoiceStream common shares in the Deutsche Telekom/VoiceStream merger, and decreased by the amount of cash received by the U.S. holder in the Deutsche Telekom/VoiceStream merger, other than cash received in lieu of a fractional Deutsche Telekom ADS or Deutsche Telekom ordinary share. The holding period of the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received will include the holding period of the VoiceStream common shares exchanged therefor.

Fractional interests in Deutsche Telekom ADSs or Deutsche Telekom ordinary shares will not be issued to VoiceStream shareholders in the Deutsche Telekom/VoiceStream merger. Instead, any fractional interests VoiceStream shareholders otherwise would have been entitled to receive will be sold and the proceeds will be paid to those shareholders. A U.S. holder who receives cash in respect of a fractional interest in a Deutsche Telekom ADS or Deutsche Telekom ordinary share will recognize gain or loss equal to the difference between the cash received for the fractional share and the U.S. holder's tax basis in the VoiceStream common shares exchanged which is allocable to the fractional interest. Any such gain or loss generally will be capital gain or loss, and generally will be long-term capital gain or loss with respect to VoiceStream common shares held for more than 12 months at the completion of the Deutsche Telekom/VoiceStream merger.

A U.S. HOLDER WHO IS A "FIVE-PERCENT TRANSFEREE SHAREHOLDER" OF DEUTSCHE TELEKOM IMMEDIATELY AFTER THE DEUTSCHE TELEKOM/VOICESTREAM MERGER, AS DEFINED IN TREASURY REGULATIONS PROMULGATED UNDER SECTION 367(a) OF THE U.S. TAX CODE, WILL QUALIFY FOR NON-RECOGNITION TREATMENT AS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS ONLY IF THE U.S. HOLDER FILES WITH THE IRS A "GAIN RECOGNITION AGREEMENT," AS DEFINED IN SUCH TREASURY REGULATIONS. ANY U.S. HOLDER OF VOICESTREAM COMMON SHARES WHO MAY BE A FIVE-PERCENT TRANSFEREE SHAREHOLDER IS URGED TO CONSULT HIS TAX ADVISOR CONCERNING THE DECISION TO FILE A GAIN RECOGNITION AGREEMENT AND THE PROCEDURES TO BE FOLLOWED IN CONNECTION WITH THAT FILING.

U.S. Holders Whose Merger Consideration Consists Solely of Cash

A U.S. holder of VoiceStream common shares that receives only cash in the Deutsche Telekom/VoiceStream merger will generally recognize gain or loss for U.S. federal income tax purposes equal to the difference between the amount of cash received and the U.S. holder's tax basis in the VoiceStream common shares surrendered in the Deutsche Telekom/VoiceStream merger. Except as described in the next sentence, such recognized gain or loss generally will be capital gain or loss, and generally will be long term with respect to VoiceStream common shares held by the U.S. holder for more than 12 months at the completion of the Deutsche Telekom/VoiceStream merger. In some cases, if the shareholder actually or constructively owns Deutsche Telekom ADSs or Deutsche Telekom ordinary shares, the recognized gain could be treated as having the effect of the distribution of a dividend, under the tests set forth in Section 302 of the U.S. tax code, in which case such gain would be treated as ordinary dividend income.

U.S. Holders Who Are Dissenting Shareholders

Subject to the discussion below, a U.S. holder who exercises his right to dissent from the Deutsche Telekom/VoiceStream merger will recognize gain or loss on the exchange of his VoiceStream common shares for cash in an amount equal to the difference between:

- the cash received, other than amounts, if any, which are or are deemed to be interest for U.S. federal income tax purposes, which amounts will be taxed as ordinary income; and

- his tax basis in his VoiceStream common shares.

Such gain or loss generally will be capital gain or loss and generally will be long-term capital gain or loss with respect to VoiceStream shares held for more than 12 months at the completion of the Deutsche Telekom/VoiceStream merger. A dissenting shareholder may be required to recognize any gain or loss in the year the Deutsche Telekom/VoiceStream merger closes, irrespective of whether the dissenting shareholder actually receives payment for his or her shares in that year. In some instances, cash received by a dissenting VoiceStream shareholder could be taxed as ordinary dividend income if the shareholder actually or constructively owns Deutsche Telekom ADSs or Deutsche Telekom ordinary shares under the tests set forth in Section 302 of the U.S. tax code after the Deutsche Telekom/VoiceStream merger.

U.S. Holders of Employee Stock Options

The exchange pursuant to the Deutsche Telekom/VoiceStream merger by a U.S. holder of an employee stock option to acquire VoiceStream common shares for an option to acquire Deutsche Telekom ADSs or Deutsche Telekom ordinary shares will not be taxable for U.S. federal income tax purposes. A U.S. holder of an option to acquire a Deutsche Telekom ADS or Deutsche Telekom ordinary share who received that option in exchange for an option to acquire VoiceStream common shares that was received as compensation, and who exercises that Deutsche Telekom option, generally will recognize ordinary income for U.S. federal income tax purposes in an amount equal to the excess of the fair market value on the exercise date of the Deutsche Telekom ADS or Deutsche Telekom ordinary share received pursuant to the exercise over the price paid for the Deutsche Telekom ADS or Deutsche Telekom ordinary share pursuant to the option, and generally will be subject to applicable withholding taxes. A U.S. holder's tax

basis in Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received as a result of the exercise of the option will equal the fair market value of the Deutsche Telekom ADS or Deutsche Telekom ordinary share on the exercise date and a U.S. holder's holding period will begin on the exercise date. Thereafter, the U.S. holder will be subject to the rules discussed below with respect to U.S. holders of Deutsche Telekom ADSs and Deutsche Telekom ordinary shares.

The foregoing discussion does not address the U.S. federal income tax consequences of the exercise of any option that is treated as an incentive stock option within the meaning of Section 422(b) of the U.S. tax code. Any U.S. holder of an option that is treated as an incentive stock option is urged to consult his own tax advisor concerning the consequences to him of the Deutsche Telekom/VoiceStream merger and exercise of the option.

U.S. Backup Withholding

Under the U.S. tax code, a U.S. holder of VoiceStream common shares may be subject, under certain circumstances, to backup withholding at a rate of 31% with respect to the amount of cash, if any, received in the Deutsche Telekom/VoiceStream merger, including cash received in lieu of fractional shares or upon exercise of dissenters' rights, unless the U.S. holder provides proof of an applicable exemption or correct taxpayer identification number and otherwise complies with applicable requirements of the backup withholding rules. Any amount withheld under the backup withholding rules is not additional tax and may be refunded or credited against the U.S. holder's federal income tax liability, so long as the required information is furnished to the IRS.

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DEUTSCHE TELEKOM/POWERTEL MERGER TO U.S. HOLDERS OF POWERTEL COMMON SHARES

Subject to the limitations and qualifications set forth under "-- General" and in this section, the discussion in this section represents the opinion of Morris, Manning & Martin, LLP, counsel to Powertel, and Cleary, Gottlieb, Steen & Hamilton, counsel to Deutsche Telekom, as to the material U.S. federal income tax consequences of the Deutsche Telekom/Powertel merger to U.S. holders of Powertel common shares. Each counsel has confirmed this opinion to Powertel or Deutsche Telekom, as applicable.

Tax Opinion Condition to Closing

The obligation of Powertel to complete the Deutsche Telekom/Powertel merger is conditioned on the receipt of an opinion from Morris, Manning & Martin, LLP, counsel to Powertel, and the obligation of Deutsche Telekom to complete the Deutsche Telekom/Powertel merger is conditioned on the receipt of an opinion from Cleary, Gottlieb, Steen & Hamilton, counsel to Deutsche Telekom, each opinion substantially to the effect that the Deutsche Telekom/Powertel merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code and that each transfer of property to Deutsche Telekom by a shareholder of Powertel pursuant to the Deutsche Telekom/Powertel merger will not be subject to Section 367(a)(1) of the U.S. tax code. Counsels' tax opinions will be based upon assumptions noted in the opinions, including an assumption that any "five-percent transferee shareholder" of Deutsche Telekom, as defined in Treasury regulations promulgated under Section 367(a) of the U.S. tax code, will file a "gain recognition agreement" as defined in such regulations, and on factual representations of Powertel and Deutsche Telekom contained in certificates signed by officers of Powertel and Deutsche Telekom to be delivered at the time of the Deutsche Telekom/Powertel merger. Powertel does not intend to waive the receipt of its counsel's opinion as a condition to its obligation to complete the Deutsche Telekom/Powertel merger, and will not waive the receipt of an opinion as a condition to its obligation to complete the merger without recirculating this document in order to resolicit stockholder approval. Counsels' opinions will not be binding on the IRS or any court.

It is assumed for purposes of the remainder of the discussion in this section that each counsel will deliver an opinion to Powertel or Deutsche Telekom, as applicable, at closing that satisfies the requirements set forth in the prior paragraph.

U.S. Holders of Powertel Common Shares

For U.S. federal income tax purposes, the Deutsche Telekom/Powertel merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code and each transfer of property to Deutsche Telekom by a shareholder of Powertel pursuant to the Deutsche Telekom/Powertel merger will not be subject to Section 367(a)(1) of the U.S. tax code. Accordingly, a U.S. holder of Powertel common shares generally will not recognize any gain or loss upon his receipt of merger consideration in the Deutsche Telekom/Powertel merger, except with respect to cash received in lieu of fractional shares, as discussed further below.

The aggregate tax basis of the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received by a U.S. holder in the Deutsche Telekom/Powertel merger, including any fractional interest to which the U.S. holder would be entitled but for the special treatment of fractional interests described below, generally will equal the aggregate tax basis of the Powertel common shares exchanged for the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares. The holding period of the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received will include the holding period of the Powertel common shares exchanged therefor.

Fractional interests in Deutsche Telekom ADSs or Deutsche Telekom ordinary shares will not be issued to Powertel shareholders in the Deutsche Telekom/Powertel merger. Instead, any fractional interests in Deutsche Telekom ADSs or Deutsche Telekom ordinary shares that a U.S. holder of Powertel common shares otherwise would have been entitled to receive will be sold and the proceeds will be paid to those shareholders. A U.S. holder who receives cash in respect of a fractional interest in a Deutsche Telekom ADS or Deutsche Telekom ordinary share will recognize gain or loss equal to the difference between the cash received for the fractional share and the U.S. holder's tax basis in the Powertel common shares exchanged which is allocable to the fractional interest. Any such gain or loss generally will be capital gain or loss, and generally will be long-term capital gain or loss with respect to Powertel common shares held for more than 12 months at the completion of the Deutsche Telekom/Powertel merger.

A U.S. HOLDER WHO IS A "FIVE-PERCENT TRANSFEREE SHAREHOLDER" OF DEUTSCHE TELEKOM AFTER THE DEUTSCHE TELEKOM/POWERTEL MERGER, AS DEFINED IN TREASURY REGULATIONS PROMULGATED UNDER SECTION 367(a) OF THE U.S. TAX CODE, WILL QUALIFY FOR NON-RECOGNITION TREATMENT AS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS ONLY IF THE SHAREHOLDER FILES WITH THE IRS A "GAIN RECOGNITION AGREEMENT", AS DEFINED IN SUCH TREASURY REGULATIONS. ALTHOUGH NO SUCH PERSONS ARE EXPECTED TO EXIST SOLELY AS A RESULT OF THE DEUTSCHE TELEKOM/POWERTEL MERGER, ANY U.S. HOLDER OF POWERTEL SHARES WHO IS CONCERNED THAT HE MAY BE A FIVE-PERCENT TRANSFEREE SHAREHOLDER IS URGED TO CONSULT HIS TAX ADVISOR CONCERNING THE DECISION TO FILE A GAIN RECOGNITION AGREEMENT AND THE PROCEDURES TO BE FOLLOWED IN CONNECTION WITH THAT FILING.

U.S. Holders of Employee Stock Options

The exchange pursuant to the Deutsche Telekom/Powertel merger by a U.S. holder of an employee stock option to acquire Powertel common shares for an option to acquire Deutsche Telekom ADSs or Deutsche Telekom ordinary shares will not be taxable for U.S. federal income tax purposes. A U.S. holder of an option to acquire a Deutsche Telekom ADS or Deutsche Telekom ordinary share who received that option in exchange for an option to acquire Powertel common shares that was received as compensation, and who exercises that Deutsche Telekom option, generally will recognize ordinary income for U.S. federal income tax purposes in an amount equal to the excess of the fair market value on the exercise date of the Deutsche Telekom ADS or Deutsche Telekom ordinary share received pursuant to the exercise over the price paid for the Deutsche Telekom ADS or Deutsche Telekom ordinary share pursuant to the option, and generally will be subject to applicable withholding taxes. A U.S. holder's tax basis in Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received as a result of the exercise of the option will

equal the fair market value of the shares on the exercise date and a U.S. holder's holding period will begin on the exercise date. Thereafter, the U.S. holder will be subject to the rules discussed below with respect to U.S. holders of Deutsche Telekom ADSs and Deutsche Telekom ordinary shares.

The foregoing discussion does not address the U.S. federal income tax consequences of the exercise of any option that is treated as an incentive stock option within the meaning of Section 422(b) of the U.S. tax code. Any U.S. holder of an option that is treated as an incentive stock option is urged to consult his own tax advisor concerning the consequences to him of the Deutsche Telekom/Powertel merger and exercise of the option.

U.S. Backup Withholding

Under the U.S. tax code, a U.S. holder of Powertel shares may be subject, under certain circumstances, to backup withholding at a rate of 31% with respect to the amount of cash, if any, received in the Deutsche Telekom/Powertel merger, including cash received in lieu of fractional shares, unless the U.S. holder provides proof of an applicable exemption or correct taxpayer identification number and otherwise complies with applicable requirements of the backup withholding rules. Any amount withheld under the backup withholding rules is not additional tax and may be refunded or credited against the U.S. holder's federal income tax liability, so long as the required information is furnished to the IRS.

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DEUTSCHE TELEKOM/POWERTEL MERGER TO U.S. HOLDERS OF POWERTEL PREFERRED SHARES

Subject to the limitations and qualifications set forth under "-- General" and this section, the discussion in this section represents the opinion of Morris, Manning & Martin, LLP, counsel to Powertel, as to the material U.S. Federal income tax consequences of the Deutsche Telekom/Powertel merger to U.S. holders of Powertel preferred shares. Counsel has confirmed this opinion to Powertel. Furthermore, it is assumed for purposes of the remainder of the discussion in this section that counsel to Powertel will deliver an opinion at closing that satisfies the requirements set forth under "-- U.S. Federal Income Tax Consequences of the Deutsche Telekom/Powertel Merger to U.S. Holders of Powertel Common Shares -- Tax Opinion Condition to Closing."

Generally, the tax treatment for a U.S. holder of Powertel preferred shares will be the same as described above for U.S. holders of Powertel common shares. Pursuant to Section 1.05(b)(iv)(B) of the Deutsche Telekom/Powertel merger agreement, however, the holders of Powertel Series E preferred shares and Powertel Series F preferred shares are entitled to additional Deutsche Telekom ADSs or Deutsche Telekom ordinary shares in satisfaction of any accrued or declared but unpaid dividends on the Powertel Series E preferred shares or Powertel Series F preferred shares on the date of the completion of the Deutsche Telekom/Powertel merger. To the extent any accrued dividends on a Powertel stockholder's Powertel Series E preferred shares or Powertel Series F preferred shares have been declared (as distinguished from dividends which have accrued but are undeclared) and remain unpaid upon the completion of the Deutsche Telekom/Powertel merger, the receipt by that Powertel stockholder of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares in satisfaction of those declared but unpaid dividends on its Powertel Series E preferred shares or Powertel Series F preferred shares will be treated as a distribution with respect to that Powertel stockholder's Powertel Series E preferred shares or Powertel Series F preferred shares and will be either taxable to that stockholder, a return of capital to that stockholder, or a combination of both, under Section 301 of the U.S. tax code and the regulations and other authorities promulgated thereunder.

The basis of the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received by a holder of Powertel Series E preferred shares or Powertel Series F preferred shares in satisfaction of any declared but unpaid dividends on that stockholder's Powertel Series E preferred shares or Powertel Series F preferred shares will equal the fair market value of such Deutsche Telekom ADSs or Deutsche Telekom ordinary shares on the date of the completion of the Deutsche Telekom/Powertel merger. Further, the

basis of the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received by a holder of Powertel Series E preferred shares or Powertel Series F preferred shares in exchange for its Powertel preferred shares, and not in satisfaction of any declared but unpaid dividends, will equal the aggregate tax basis of the shares exchanged for the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares, subject to a downward adjustment to the extent that any Deutsche Telekom ADSs or Deutsche Telekom ordinary shares which represent declared but unpaid dividends on a stockholder's Powertel Series E preferred shares or Powertel Series F preferred shares are treated as a return of capital on that stockholder's preferred shares for tax purposes.

The holding period for determining long-term capital gains treatment for any Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received by a holder of Powertel Series E preferred shares or Powertel Series F preferred shares in satisfaction of any declared but unpaid dividends with respect to those shares will commence on the day following the completion of the Deutsche Telekom/Powertel merger.

Each holder of Powertel preferred shares should consult its tax advisor in connection with the tax implications of any Deutsche Telekom ADSs or Deutsche Telekom ordinary shares received in satisfaction of any declared but unpaid dividends with respect to the stockholder's preferred shares.

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE VOICESTREAM/POWERTEL MERGER TO U.S. HOLDERS OF POWERTEL COMMON SHARES

Subject to the limitations and qualifications set forth under "-- General" and in this section, the discussion in this section represents the opinion of Morris, Manning & Martin, LLP, counsel to Powertel, Jones, Day, Reavis & Pogue, tax counsel to VoiceStream, and Preston Gates & Ellis LLP, counsel to VoiceStream, as to the material U.S. federal income tax consequences of the VoiceStream/Powertel merger to U.S. holders of Powertel common shares. Each counsel has confirmed this opinion to Powertel or to VoiceStream, as applicable.

Tax Opinion Condition to Closing

The obligation of Powertel to complete the VoiceStream/Powertel merger is conditioned on the receipt of an opinion from Morris, Manning & Martin, LLP, counsel to Powertel, and the obligation of VoiceStream to complete the VoiceStream/Powertel merger is conditioned on the receipt of an opinion from Preston Gates & Ellis LLP, counsel to VoiceStream and/or Jones, Day Reavis & Pogue, tax counsel to VoiceStream, each opinion substantially to the effect that the VoiceStream/Powertel merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code. Counsels' tax opinions will be based upon assumptions noted in the opinions and on factual representations of Powertel and VoiceStream contained in certificates signed by officers of Powertel and VoiceStream to be delivered at the time of the VoiceStream/Powertel merger. Powertel does not intend to waive the receipt of its counsel's opinion as a condition to its obligation to complete the VoiceStream/Powertel merger, and will not waive the receipt of an opinion as a condition to its obligations to complete the merger without recirculating this document in order to resolicit stockholder approval of the waiver. Counsels' opinions will not be binding on the IRS or any court.

It is assumed for purposes of the remainder of the discussion in this section that each counsel will deliver an opinion to Powertel or VoiceStream, as applicable, at closing that satisfies the requirements set forth in the prior paragraph.

U.S. Holders of Powertel Common Shares

For U.S. federal income tax purposes, the VoiceStream/Powertel merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code. Accordingly, a U.S. holder of Powertel common shares generally will not recognize any gain or loss upon his receipt of merger consideration in the VoiceStream/Powertel merger, except with respect to cash received in lieu of fractional shares, as discussed further below.

The aggregate tax basis of the VoiceStream common shares received by a U.S. holder in the VoiceStream/Powertel merger, including any fractional interests to which the U.S. holder would be entitled but for the special treatment of fractional interests discussed below, generally will equal the aggregate tax basis of the Powertel common shares exchanged therefor. The holding period of the VoiceStream common shares received will include the holding period of the Powertel common shares exchanged therefor.

Fractional interests in VoiceStream common shares will not be issued to Powertel shareholders in the VoiceStream/Powertel merger. Instead, cash will be paid in lieu of any fractional interests in VoiceStream common shares that a U.S. holder of Powertel common shares otherwise would have been entitled to receive. A U.S. holder who receives cash in lieu of a fractional share of VoiceStream common share will recognize gain or loss equal to the difference between the cash received for the fractional share and the U.S. holder's tax basis in the Powertel common shares exchanged which is allocable to the fractional interest. Any such gain or loss generally will be capital gain or loss, and generally will be long-term capital gain or loss with respect to Powertel common shares held for more than 12 months at the completion of the VoiceStream/Powertel merger.

U.S. Holders of Employee Stock Options

The exchange pursuant to the VoiceStream/Powertel merger by a U.S. holder of an employee stock option to acquire Powertel common shares for an option to acquire VoiceStream common shares will not be taxable for U.S. federal income tax purposes. A U.S. holder of an option to acquire VoiceStream common shares who received that option in exchange for an option to acquire Powertel common shares that was received as compensation, and who exercises that VoiceStream option, generally will recognize ordinary income for U.S. federal income tax purposes in an amount equal to the excess of the fair market value on the exercise date of the VoiceStream common shares received pursuant to the exercise over the price paid for the VoiceStream common shares pursuant to the option, and generally will be subject to applicable withholding taxes. A U.S. holder's tax basis in VoiceStream common shares received as a result of the exercise of the option will equal the fair market value of the shares on the exercise date and a U.S. holder's holding period will begin on the exercise date.

The foregoing discussion does not address the U.S. federal income tax consequences of the exercise of any option that is treated as an incentive stock option within the meaning of Section 422(b) of the U.S. tax code. Any U.S. holder of an option that is treated as an incentive stock option is urged to consult his own tax advisor concerning the consequences to him of the VoiceStream/Powertel merger and exercise of the option.

U.S. Backup Withholding

Under the U.S. tax code, a U.S. holder of Powertel common shares may be subject, under certain circumstances, to backup withholding at a rate of 31% with respect to the amount of cash, if any, received in the VoiceStream/Powertel merger, including cash received in lieu of fractional shares, unless the U.S. holder provides proof of an applicable exemption or correct taxpayer identification number and otherwise complies with applicable requirements of the backup withholding rules. Any amount withheld under the backup withholding rules is not additional tax and may be refunded or credited against the U.S. holder's federal income tax liability, so long as the required information is furnished to the IRS.

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE VOICESTREAM/POWERTEL MERGER TO U.S. HOLDERS OF POWERTEL PREFERRED SHARES

Subject to the limitations and qualifications set forth under the heading "-- General" and this section, the discussion in this section represents the opinion of Morris, Manning & Martin, LLP, counsel to Powertel, as to the material U.S. Federal income tax consequences of the VoiceStream/Powertel merger to U.S. holders of Powertel preferred shares. Counsel has confirmed this opinion to Powertel. Furthermore, it is assumed for purposes of the remainder of the discussion in this section that counsel to Powertel will

deliver an opinion at closing that satisfies the requirements set forth under "-- U.S. Federal Income Tax Consequences of the VoiceStream/Powertel Merger to U.S. Holders of Powertel Common Shares -- Tax Opinion Condition to Closing."

Generally, the tax treatment for a U.S. holder of Powertel preferred shares will be the same as described above for U.S. holders of Powertel common shares. Pursuant to Section 1.06(c)(ii)(B)(2) of the VoiceStream/Powertel merger agreement, however, the holders of Powertel Series E preferred shares and Powertel Series F preferred shares are entitled to additional VoiceStream common shares in satisfaction of any accrued or declared but unpaid dividends on the Powertel Series E preferred shares or Powertel Series F preferred shares on the date of the completion of the VoiceStream/Powertel merger. To the extent any accrued dividends on a Powertel stockholder's Powertel Series E preferred shares or Powertel Series F preferred shares have been declared (as distinguished from dividends which have accrued but are undeclared) and remain unpaid upon the completion of the VoiceStream/Powertel merger, the receipt by that Powertel stockholder of VoiceStream common shares in satisfaction of those declared but unpaid dividends on its Powertel Series E preferred shares or Powertel Series F preferred shares will be treated as a distribution with respect to that Powertel stockholder's Powertel Series E preferred shares or Powertel Series F preferred shares and will be either taxable to that stockholder, a return of capital to that stockholder, or a combination of both, under Section 301 of the U.S. tax code and the regulations and other authorities promulgated thereunder.

The basis of the VoiceStream common shares received by a holder of Powertel Series E preferred shares or Powertel Series F preferred shares in satisfaction of any declared but unpaid dividends on that stockholder's Powertel Series E preferred shares or Powertel Series F preferred shares will equal the fair market value of such VoiceStream common shares on the date of the completion of the VoiceStream/Powertel merger. Further, the basis of the VoiceStream common shares received by a holder of Powertel Series E preferred shares or Powertel Series F preferred shares in exchange for its Powertel shares, and not in satisfaction of any declared but unpaid dividends, will equal the aggregate tax basis of the shares exchanged for the VoiceStream common shares, subject to a downward adjustment to the extent that any VoiceStream common shares which represent declared but unpaid dividends on a stockholder's Powertel Series E preferred shares or Powertel Series F preferred shares are treated as a return of capital on that stockholder's preferred shares for tax purposes.

The holding period for any VoiceStream common shares received by a holder of Powertel Series E preferred shares or Powertel Series F preferred shares in satisfaction of any declared but unpaid dividends with respect to those shares will commence on the day following the completion of the VoiceStream/Powertel merger.

Each holder of Powertel preferred shares should consult its tax advisor in connection with the tax implications of any VoiceStream common shares received in satisfaction of any declared but unpaid dividends with respect to the stockholder's preferred shares.

U.S. FEDERAL INCOME TAX AND GERMAN TAX CONSIDERATIONS FOR U.S. RESIDENT HOLDERS OF DEUTSCHE TELEKOM ADSS AND DEUTSCHE TELEKOM ORDINARY SHARES

The following is a summary of the material U.S. federal income tax and German tax considerations related to the acquisition, ownership and disposition of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares by a holder that is a resident of the United States for purposes of the income tax convention between the United States and Germany, which in this document we refer to as the "Income Tax Treaty", and is fully eligible for benefits under the Income Tax Treaty. We refer in this document to such holder as a "U.S. resident holder". The summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to any particular investor, including tax considerations, that arise from rules of general application or that are generally assumed to be known by investors. In particular, the summary does not deal with U.S. resident holders that do not hold Deutsche Telekom ADSs or Deutsche Telekom ordinary shares as capital assets. The summary does not address the tax treatment of holders that are subject to special rules, such as banks, insurance companies, dealers in

securities or currencies, persons holding property as part of an integrated investment, including a "straddle", that includes one or more other positions, persons that own, directly or indirectly, 10% or more of Deutsche Telekom's voting shares and holders whose "functional currency" is not the U.S. dollar. The summary is based on laws, treaties and regulatory interpretations in effect on the date hereof, all of which are subject to change.

Holders should consult their own advisors regarding the tax consequences of the acquisition, ownership and disposition of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares in light of their particular circumstances, including the effect of any state, local, or other national laws.

The beneficial owner of a Deutsche Telekom ADS or Deutsche Telekom ordinary share generally will be entitled to Income Tax Treaty benefits, and therefore will be a U.S. resident holder, if it is the following:

- an individual resident of the United States, a U.S. corporation, or a partnership, estate or trust to the extent its income from whatever source derived is subject to taxation in the United States in its hands or in the hands of its partners or beneficiaries;

- not also a resident of Germany for German tax purposes; and

- not subject to an anti-treaty shopping article that applies in limited circumstances.

The Income Tax Treaty benefits discussed below generally are not available to U.S. taxpayers that hold Deutsche Telekom ADSs or Deutsche Telekom ordinary shares in connection with the conduct of business through a permanent establishment, or the performance of personal services through a fixed base, in Germany. This summary does not discuss the treatment of such holders.

In general, for U.S. federal income tax purposes and for purposes of the Income Tax Treaty, beneficial owners of Deutsche Telekom ADSs will be treated as the beneficial owners of the Deutsche Telekom ordinary shares represented by those Deutsche Telekom ADSs.

Dividends

As described more fully below, dividends paid by German corporations generally are subject to German withholding tax at an aggregate rate of 26.375%, consisting of a 25% withholding tax and a 1.375% surcharge.

Under the Income Tax Treaty, the German withholding tax rate is reduced to 15% of the declared dividend. During the period in which the existing corporate tax imputation system continues to apply to individuals under German law, U.S. resident holders are entitled to claim an additional reduction in German withholding tax equal to 5% of the gross dividend. Accordingly, a U.S. resident holder would be entitled to receive a refund payment from the German tax authorities equal to 16.375% of the declared dividend. The Income Tax Treaty provides that 11.375% of the declared dividend will be treated for U.S. tax purposes as a reduction in German withholding tax to the generally applicable Income Tax Treaty rate of 15%, and the remaining 5% of the declared dividend will be treated as the net amount of an additional dividend of 5.88% of the declared dividend that has been subject to a 15% German withholding tax.

Thus, if Deutsche Telekom declares a dividend of 100, a U.S. resident holder initially will receive 100 minus the 26.375% withholding tax, which equals 73.625. The U.S. resident holder then can claim a refund from the German authorities of 16.375 and thereby will receive total cash payment of 90, or 90% of the declared dividend. For U.S. tax purposes, the holder will be deemed to have received gross dividends of 105.88, consisting of the declared dividend of 100, plus the deemed additional dividend of 5.88 that is associated with the Income Tax Treaty refund.

As discussed under "-- German Tax Considerations for Non-German Holders of Deutsche Telekom ADSs and Deutsche Telekom Ordinary Shares -- Taxation of Dividends," pursuant to the Tax Reduction Act adopted by the German Parliament on July 14, 2000, the German corporate tax imputation system will be abolished. Under the Income Tax Treaty, a U.S. resident holder will still be entitled to a reduction in the German withholding tax rate to 15%. For a declared dividend of 100, a U.S. resident holder would initially receive 78.9 and could claim a refund from the German tax authorities of 6.1 and would therefore

receive a total cash payment of 85. For U.S. federal income tax purposes, a U.S. resident holder would be deemed to have received gross dividends of 100.

As discussed under "-- German Tax Considerations for Non-German Holders of Deutsche Telekom ADSs and Deutsche Telekom Ordinary Shares -- Taxation of Dividends," the Tax Reduction Act will, in principle, enter into force on January 1, 2001. However, transition rules exist under which certain changes will only become effective in 2002. Dividends paid in 2001 out of earnings that accrued prior to the end of the year 2000 will still be subject to the corporate tax imputation system.

The gross amount of dividends received by a U.S. resident holder, including the additional dividend associated with the Income Tax Treaty refund and amounts withheld in respect of German withholding tax, generally will be subject to U.S. federal income taxation as foreign source dividend income, and will not be eligible for the dividends received deduction generally allowed to U.S. corporations. German withholding tax at the 15% rate provided under the Income Tax Treaty will be treated as a foreign income tax that, subject to generally applicable limitations under U.S. tax law, is eligible for credit against a U.S. resident holder's U.S. federal income tax liability or, at the holder's election, may be deducted in computing taxable income. Thus, for a declared dividend of 100, under the current German corporate tax imputation system, a U.S. resident holder would be deemed to have paid German taxes of 15.88, but under the Tax Reduction Act, a U.S. resident holder would be deemed to have paid German taxes of 15. For foreign tax credit purposes, dividends paid by Deutsche Telekom will be foreign source "passive income" or, in the case of certain U.S. resident holders, "financial services income". Foreign tax credits will not be allowed for withholding taxes imposed in respect of certain short-term or hedged positions in Deutsche Telekom ADSs or Deutsche Telekom ordinary shares or in respect of arrangements in which a U.S. resident holder's expected economic profit, after non-U.S. taxes, is insubstantial. U.S. resident holders should consult their own tax advisors concerning the implications of these rules in light of their particular circumstances.

Dividends paid in non-U.S. currency will be included in the income of a U.S. resident holder in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt by the holder or, in the case of Deutsche Telekom ADSs, by the depositary bank for the ADSs, regardless of whether the payment is in fact converted into U.S. dollars. In this document we refer to the depositary bank as the "Depositary". If dividends paid in foreign currency are converted into U.S. dollars on the date of receipt, U.S. resident holders generally should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. resident holder may be required to recognize domestic-source foreign currency gain or loss on the receipt of a refund in respect of German withholding tax to the extent the U.S. dollar value of the refund differs from the U.S. dollar equivalent of that amount on the date of receipt of the underlying dividend, but not with respect to the portion of the Income Tax Treaty refund that is treated as an additional dividend.

Refund Procedures

Pursuant to administrative procedures introduced on a trial basis, claims for refunds payable under the Income Tax Treaty to U.S. resident holders must be submitted to the German tax authorities by the Depositary collectively on behalf of all such U.S. resident holders. However, this procedure is not available for U.S. resident holders entitled to refunds in excess of DM 300 for the calendar year; such holders must file separate claims. Claims must be filed within four years of the end of the calendar year in which the dividend was received.

Details of the collective refund procedure are available from the Depositary. Individual claims for refunds are made on a special German form, which must be filed with the German tax authorities: Bundesamt fur Finanzen, Friedhofstrasse 1, 53221 Bonn, Germany. Copies of the required form may be obtained from the German tax authorities at the same address or from the Embassy of the Federal Republic of Germany, 4645 Reservoir Road, N.W., Washington, D.C. 20007-1998.

As part of the individual refund claim, a U.S. resident holder must submit to the German tax authorities the original bank voucher, or the certified copy thereof, issued by the paying entity documenting the tax withheld, and an official certification on IRS Form 6166 of its last filed U.S. federal

income tax return. IRS Form 6166 may be obtained by filing a request with the Internal Revenue Service Center in Philadelphia, Pennsylvania, Foreign Certificate Request, P.O. Box 16347, Philadelphia, PA 19114-0447. Requests for certification must include the holder's name, Social Security number or Employer Identification number, tax return form number, and tax period for which the certification is requested. Requests for certification can include a request to the IRS to send the certification directly to the German tax authorities. If no such request is made, the IRS will send a certificate on IRS Form 6166 to the U.S. resident holder, which then must submit the certification with its claim for refund.

Refunds under the Income Tax Treaty are not available in respect of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares held in connection with a permanent establishment or fixed base in Germany.

Capital Gains

Under the Income Tax Treaty, a U.S. resident holder will not be subject to German capital gains tax in respect of a sale or other disposition of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares unless the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares were held in connection with a permanent establishment or fixed base in Germany.

Gain or loss realized by a U.S. resident holder on the sale or disposition of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares will be capital gain or loss, and will be long-term gain or loss if the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares were held for more than one year. The net amount of long-term capital gain realized by an individual holder generally is subject to taxation at a present maximum rate of 20%. A U.S. resident holder's ability to offset capital losses against ordinary income is subject to limitations. Deposits and withdrawals of shares in exchange for Deutsche Telekom ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes.

Inheritance and Gift Tax

Under the current estate, inheritance and gift tax treaty between the United States and Germany, which in this document we refer to as the "Estate Tax Treaty", a transfer of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares by gift or by reason of the death of a U.S. resident holder generally will not be subject to German gift or inheritance tax unless the donor or transferor, or the heir, donee or other beneficiary, is domiciled in Germany for purposes of the Estate Tax Treaty at the time gift was made, or at the time of the donor's or transferors' death, or the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares were held in connection with a permanent establishment or fixed base in Germany.

The Estate Tax Treaty provides a credit against U.S. federal estate and gift tax liability for the amount of inheritance and gift tax paid in Germany, subject to certain limitations, in a case where Deutsche Telekom ADSs or Deutsche Telekom ordinary shares are subject to German inheritance or gift tax and U.S. federal estate or gift tax.

Information Reporting and Backup Withholding

Dividends on Deutsche Telekom ADSs or Deutsche Telekom ordinary shares, and payments of the proceeds of a sale of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares paid within the United States or through certain U.S.-related financial intermediaries are subject to information reporting and may be subject to U.S. backup withholding at a 31% rate unless the holder:

- is a corporation or other exempt recipient; or

- provides a taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred.

Holders that are not United States persons generally are not subject to information reporting or backup withholding. However, such a holder may be required to provide a certification to establish its non-U.S. status in connection with payments received within the United States or through certain U.S.-related financial intermediaries.

GERMAN TAX CONSIDERATIONS FOR NON-GERMAN HOLDERS OF DEUTSCHE TELEKOM ADSS AND DEUTSCHE TELEKOM ORDINARY SHARES

The following is a brief summary of material German tax considerations for beneficial owners of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares that are not German residents for German income tax purposes and do not hold Deutsche Telekom ADSs or Deutsche Telekom ordinary shares as part of a permanent establishment or a fixed base in Germany, which in this document we refer to as "Non-German Holders". This summary is based upon German law and typical tax and other treaties between Germany and other countries in effect as of the date hereof and is subject to changes in German law or in such treaties. The following is not meant to be a comprehensive discussion of all of the German tax consequences which may be relevant for Non-German Holders. Prospective holders of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares should consult their tax advisors regarding the German federal, state and local tax consequences of the acquisition, ownership and disposition of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares in light of their particular circumstances.

The following discussion does not purport to be a comprehensive discussion of all German tax consequences which may be relevant for Non-German Holders.

Company Taxation in Germany

In general, German corporations are subject to trade tax on income and to corporate income tax at a rate of 40% on non-distributed profits and of 30% on distributed profits. Since January 1, 1998, the corporate income tax liability has been subject to a 5.5% solidarity surcharge (Solidaritatszuschlag). This currently results in an effective aggregate corporate income tax charge of 31.94% on distributed profits. German resident taxpayers, including foreign investors that hold shares or ADSs as part of a permanent establishment or a fixed base in Germany, are entitled to a refundable tax credit in the amount of three-sevenths of the gross amount before dividend withholding tax of profits distributed, which credit also reduces the basis for the 5.5% surcharge on the German taxpayer's income tax liability. That credit or refund is not available to Non-German Holders.

In addition, German corporations are subject to a profit-related trade tax, the exact amount of which depends on the municipality in which the corporation maintains its business establishments. Trade tax is a deductible item in computing the corporation's tax base for the corporate income tax purposes.

Taxation of Dividends

A 25% withholding tax, plus a solidarity surcharge of 5.5 percent thereon resulting in a withholding tax burden of 26.375, is imposed on gross dividend distributions by a German corporation. With respect to a Non-German Holder, this rate may be reduced by a tax treaty applicable to such Non-German Holder. Under most tax treaties the withholding tax rate is reduced to 15%. The reduction is granted by way of a refund of the difference between the tax withheld at the statutory rate of 25% plus the surcharge and the applicable treaty rate upon application to the German tax authorities (Bundesamt fur Finanzen), located at Friedhofstrasse 1, 53225 Bonn, Germany. For Non-German Holders of ADSs entitled to the benefits of the Income Tax Treaty a special refund procedure may apply, as described under "-- U.S. Federal Income Tax and German Tax Considerations for U.S. Resident Holders of Deutsche Telekom ADSs and Deutsche Telekom Ordinary Shares."

Under the Income Tax Treaty, during the period in which the corporate tax imputation system continues to apply to individuals under German law, qualifying U.S. shareholders are entitled to an additional reduction in German tax equal to 5% of the gross amount of the dividend, which is refundable together with the general treaty refund discussed in the preceding paragraph. Special U.S. tax rules applicable to this additional refund are discussed under "-- U.S. Federal Income Tax and German Tax Considerations for U.S. Resident Holders of Deutsche Telekom ADSs and Deutsche Telekom Ordinary Shares -- Refund Procedures."

On July 14, 2000, the German parliament adopted a Tax Reduction Act (Steuersenkungsgesetz) which, in principle, will enter into force on January 1, 2001. However, transition rules exist under which certain changes will only become effective in 2002. Pursuant to the Tax Reduction Act, the corporate tax

imputation system will be abolished and the withholding tax and corporate income tax rates will be reduced effective January 1, 2001. Corporate profits will be subject to tax separately at corporate and shareholder levels. The corporate income tax rate will be 25%, plus solidarity surcharge of 1.375%, on distributed and retained earnings. Dividends received by Non-German Holders will be subject to withholding tax at a rate of 20%, plus a 5.5% solidarity surcharge resulting in an effective rate of 21.1%. The withholding tax rate for Non-German Holders may be lower under the provisions of an applicable double tax treaty. The abolishment of the corporate income tax imputation system will result in U.S. resident holders being subject to a maximum dividend withholding rate of 15% under the Income Tax Treaty, without further reduction. Dividends paid in 2001 out of earnings that accrued prior to the end of the year will still be subject to the imputation system.

Capital Gains

Under German domestic tax law, gain which Non-German Holders derive from the sale or other disposition of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares is not subject to tax in Germany, provided the Non-German Holder has not held, directly or indirectly, 10% or more of the shares at any time during the five-year period immediately preceding the disposition. Effective January 1, 2002, this participation threshold will be reduced to 1% pursuant to the Tax Reduction Act mentioned above. Most tax treaties concluded by Germany with other countries, including the Income Tax Treaty, provide that Non-German Holders resident in the respective treaty state are not subject to German income tax on such capital gains.

Inheritance and Gift Tax

Under German law, German gift or inheritance tax will be imposed on transfers of shares or ADSs by gift or at death of a Non-German Holder only if:

- the donor or transferor, or the heir, donee or other beneficiary, was domiciled in Germany at the time of the transfer or, with respect to German citizens who are not domiciled in Germany, if such donor, transferor or beneficiary has not been continuously outside of Germany for a period of more than five years or had a residence in Germany during such absence; or

- the Deutsche Telekom ADSs or Deutsche Telekom ordinary shares subject to such transfer consist or form part of a portfolio of 10% or more of such Deutsche Telekom ADSs or Deutsche Telekom ordinary shares held directly or indirectly by the donor or transferor himself or together with one or more related persons.

The few German estate tax treaties currently in force, for example, the Estate Tax Treaty, usually provide that German gift or inheritance tax may only be imposed if the first condition above is met or if the ordinary shares or ADSs were held in connection with a permanent establishment or fixed base in Germany.

Other Taxes

No German transfer, stamp or other similar taxes apply to the acquisition, sale or other disposition of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares by Non-German Holders.

SUMMARY OF THE DEUTSCHE TELEKOM/VOICESTREAM
TRANSACTION DOCUMENTS

THE DEUTSCHE TELEKOM/VOICESTREAM MERGER AGREEMENT

The following is a summary of the principal provisions of the Deutsche Telekom/VoiceStream merger agreement. This summary is qualified in its entirety by reference to the Deutsche Telekom/VoiceStream merger agreement, a copy of which is incorporated by reference and attached as Annex A to this proxy statement/prospectus. VoiceStream stockholders are urged to read the Deutsche Telekom/VoiceStream merger agreement in its entirety, as it is the legal document governing the Deutsche Telekom/ VoiceStream merger.

The Deutsche Telekom/VoiceStream Merger

A Delaware corporation formed by Deutsche Telekom will merge with and into VoiceStream and, as a result, VoiceStream will become a wholly-owned subsidiary of Deutsche Telekom.

Effective Time and Timing of Closing

The Deutsche Telekom/VoiceStream merger will be completed and become effective when VoiceStream files a certificate of merger with the Secretary of State of the State of Delaware or at such later time as is specified in the certificate of merger in accordance with Delaware law. We expect the Deutsche Telekom/VoiceStream merger to become effective on the same day as the closing of the Deutsche Telekom/VoiceStream merger. The closing of the Deutsche Telekom/VoiceStream merger will take place on the fifth business day, or on such other date that Deutsche Telekom and VoiceStream may agree, after the conditions to the Deutsche Telekom/VoiceStream merger have been satisfied or waived. In addition, on the closing date of the Deutsche Telekom/VoiceStream merger or as soon as possible after the closing date, Deutsche Telekom and VoiceStream will undertake a number of additional actions, including making filings with regulatory and stock exchange authorities necessary to permit the issuance of the Deutsche Telekom/VoiceStream merger consideration.

TYPE OF ELECTION                               CONSIDERATION TO BE RECEIVED PER VOICESTREAM COMMON SHARE
----------------                               ---------------------------------------------------------
- Mixed......................................  $30 in cash and 3.2 Deutsche Telekom shares
- All Stock..................................  3.7647 Deutsche Telekom shares
- All Cash...................................  $200 in cash

VoiceStream stockholders who fail to make an election will be deemed to have made a mixed cash and stock election.

ELECTION EXAMPLES (SUBJECT TO PRORATION AND ADJUSTMENT)

- Choosing the mixed election. If you own 100 VoiceStream common shares and you make the mixed election, you will receive $30 multiplied by 100, or $3,000 in cash, and 3.2 multiplied by 100, or 320 Deutsche Telekom shares.

- Choosing the all-stock election. If you own 100 VoiceStream common shares and you make the all-stock election, you will receive 3.7647 multiplied by 100, or 376 Deutsche Telekom shares. In addition, you will receive a cash payment equal to .47 of the market price of a Deutsche Telekom share in lieu of the remaining fractional share.

- Choosing the all-cash election. If you own 100 VoiceStream common shares and you make the all-cash election, you will receive $200 multiplied by 100, or $20,000 in cash.

You will receive Deutsche Telekom shares in the form of Deutsche Telekom ADSs, which are traded on the NYSE under the symbol "DT", or, if you prefer, in the form of Deutsche Telekom ordinary shares, which trade principally on the Frankfurt Stock Exchange under the symbol "DTE".

Proration. The total number of Deutsche Telekom shares that will be issued and the total amount of cash that will be paid in the Deutsche Telekom/VoiceStream merger is 3.2 and $30, respectively, multiplied by the total number of VoiceStream common shares outstanding immediately prior to the completion of the Deutsche Telekom/VoiceStream merger. Therefore, the all-stock and all-cash elections are subject to proration to preserve these limitations on the amount of cash to be paid and Deutsche Telekom shares to be issued.

As a result, even if you elect to receive the all-stock or all-cash consideration, you may nevertheless receive a mix of Deutsche Telekom shares and cash. VoiceStream stockholders who make the mixed election will not be subject to proration.

We illustrate below how the proration mechanism will be used. For ease of reference, we refer to the number of Deutsche Telekom shares derived by multiplying 3.2 and the number of VoiceStream common shares outstanding immediately prior to the completion of the Deutsche Telekom/VoiceStream merger as the "Deutsche Telekom share issuance number." Similarly, we refer to the amount of cash derived by multiplying $30 and the number of VoiceStream common shares outstanding immediately prior to the completion of the Deutsche Telekom/VoiceStream merger as the "aggregate cash amount."

Proration if Too Much Cash Is Elected. If the all-cash election is oversubscribed so that the amount of cash issuable in the Deutsche Telekom/VoiceStream merger exceeds the aggregate cash amount, then VoiceStream stockholders making an all-cash election will receive a combination of cash and Deutsche Telekom shares calculated in the following way:

- Step 1. Derive the available cash election amount: the available cash election amount is the aggregate cash amount less the amount of cash to be paid in respect of shares as to which a valid mixed election is made.

- Step 2. Derive the cash election amount: the cash election amount is the product of $200 and the number of VoiceStream common shares as to which a valid all-cash election is made.

- Step 3. Derive the cash proration factor: the cash proration factor equals the available cash election amount divided by the cash election amount.

- Step 4. Derive the prorated cash consideration: each VoiceStream common share as to which a valid all-cash election is made will be converted into the right to receive an amount in cash equal to the product of $200 multiplied by the cash proration factor.

- Step 5. Derive the stock consideration: each VoiceStream common share as to which a valid all-cash election is made will be converted into the right to receive a number of Deutsche Telekom ordinary shares equal to the product of 3.7647 and the number equal to one minus the cash proration factor.

Example. If the all-cash election of VoiceStream stockholders is oversubscribed, we would calculate the cash proration factor as illustrated above. Assuming that the cash proration factor is 0.6, then if you own 100 VoiceStream common shares and make an all-cash election, you would receive:

- the amount of cash equal to 0.6 multiplied by $200, multiplied by the number of VoiceStream common shares you hold, or 100, for a total of $12,000 in cash; and

- the number of Deutsche Telekom shares equal to 3.7647 multiplied by 0.4, multiplied by the number of VoiceStream common shares you hold, or 100, for a total of 150 Deutsche Telekom shares (plus cash for .588 of a Deutsche Telekom share).

Proration if Too Many Deutsche Telekom Shares Are Elected. If the all-stock election is oversubscribed so that the number of Deutsche Telekom shares issuable in the Deutsche Telekom/VoiceStream merger exceeds the Deutsche Telekom share issuance number, then VoiceStream stockholders making an all-stock election will receive a combination of cash and Deutsche Telekom shares calculated in the following way:

- Step 1. Derive the available cash election amount: the available cash election amount is the aggregate cash amount less the amount of cash to be paid in respect of shares as to which a valid mixed election is made.

- Step 2. Derive the cash election amount: the cash election amount is the product of $200 and the number of VoiceStream common shares as to which a valid all-cash election is made.

- Step 3. Derive the excess cash amount: the excess cash amount is the difference between the available cash election amount and the cash election amount.

- Step 4. Derive the prorated cash consideration: each VoiceStream common share as to which a valid all-stock election is made will receive an amount in cash equal to the excess cash amount divided by the number of VoiceStream common shares as to which a valid all-stock election is made.

- Step 5. Derive the stock proration factor: the stock proration factor is a fraction the numerator of which is $200 minus the per share cash consideration calculated in Step 4 and the denominator of which is $200.

- Step 6. Derive the prorated stock consideration: each VoiceStream common share as to which a valid all-stock election is made will be converted into the right to receive a number of Deutsche Telekom ordinary shares equal to the product of 3.7647 and the stock proration factor.

Example. If the all-stock election of VoiceStream stockholders is oversubscribed, we would calculate the cash consideration as illustrated above. Assuming that the prorated cash consideration is $20 per share, then the stock proration factor would be 0.9. If you own 100 VoiceStream shares and make an all-stock election under these circumstances, you would receive:

- $20 multiplied by the number of VoiceStream shares you hold, or 100, for a total of $2,000; and

- the amount of Deutsche Telekom ordinary shares equal to 3.7647 multiplied by 0.9, multiplied by the number of VoiceStream common shares you hold, or 100, for a total of 338 Deutsche Telekom shares plus cash for .823 of a Deutsche Telekom share.

Adjustments. In order to preserve the tax-free treatment of the receipt of Deutsche Telekom shares by VoiceStream stockholders for U.S. federal income tax purposes and permit the delivery of the requisite tax opinion pursuant to the Deutsche Telekom/VoiceStream merger agreement, the aggregate cash consideration paid to all VoiceStream stockholders, plus approximately $625 million of Deutsche Telekom's investment in VoiceStream voting preferred shares, cannot exceed 20% of the total value of the shares and cash delivered by Deutsche Telekom to VoiceStream's stockholders. VoiceStream stockholders would potentially be subject to this adjustment regardless of whether they make an all-stock, all-cash or mixed election. Based on a number of factors, including the exchange rate between the euro and the U.S. dollar immediately before the closing of the Deutsche Telekom/VoiceStream merger, the number of outstanding VoiceStream shares at the time of the Deutsche Telekom/VoiceStream merger and the number of VoiceStream stockholders who exercise dissenters' rights, the adjustment generally would be triggered if the trading price of Deutsche Telekom shares immediately prior to the completion of the merger is less than approximately $____, but could also be triggered at a higher trading price. Accordingly, depending on the value of Deutsche Telekom shares at the time the Deutsche Telekom/VoiceStream merger is completed and other factors, the cash portion of the Deutsche Telekom/VoiceStream merger consideration may be reduced. The value of the reduction would be made up by an increased number of Deutsche Telekom shares based on a price of the Deutsche Telekom shares calculated as described in the next paragraph. The amount of any adjustment will be determined by VoiceStream in consultation with

Deutsche Telekom. IF THE MERGER HAD CLOSED ON THE VOICESTREAM RECORD DATE AND NO DISSENTERS' RIGHTS HAD BEEN EXERCISED, THE ADJUSTMENT WOULD HAVE BEEN NECESSARY AND, AS A RESULT, THE AMOUNT OF CASH AVAILABLE TO VOICESTREAM STOCKHOLDERS WOULD HAVE BEEN REDUCED BY APPROXIMATELY ____%, WITH ADDITIONAL DEUTSCHE TELEKOM SHARES, WHICH WOULD HAVE BEEN OF A LESSER VALUE, ISSUED IN SUBSTITUTION.

If a cash adjustment is made, then for purposes of determining the number of Deutsche Telekom shares to which a holder is entitled in lieu of the amount by which the cash portion of the Deutsche Telekom/VoiceStream merger consideration is reduced, the price of Deutsche Telekom ordinary shares is calculated by taking the volume weighted average trading price in euros of Deutsche Telekom ordinary shares on the Frankfurt Stock Exchange on seven trading days randomly selected from the 15 trading days immediately preceding the date the determination is to be made, converted into U.S. dollars at a fixed exchange rate of one euro to 0.9216 of a U.S. dollar. If this calculated average price would otherwise be less than 33 euros, then 33 euros, and not the calculated average price, will be used. If the calculated average price is less than 33 euros or if the euro depreciates from the fixed exchange rate of one euro to 0.9216 of a U.S. dollar, the aggregate market value of the Deutsche Telekom shares that VoiceStream stockholders receive to compensate for the reduction in cash consideration generally would be less than the amount by which the cash consideration was reduced to permit delivery of the required tax opinion. As of the VoiceStream record date, the euro had depreciated from the fixed exchange rate of one euro to 0.9216 of a U.S. dollar. See "Exchange Rates." Accordingly, had the Deutsche Telekom/VoiceStream merger closed on the record date, the value of the additional Deutsche Telekom shares substituted would have been less than the amount of the cash reduction.

Example. If you own 100 VoiceStream common shares, made a mixed election and therefore would have otherwise received $30 in cash per share as part of your merger consideration, you would have received a total of $3,000 and 320 Deutsche Telekom shares, absent adjustment. We could be required to adjust the cash payment to permit delivery of the required tax opinion by reducing it from $30. In the event the cash payment is reduced to $25, you then would receive in lieu of the $500, or $5 per VoiceStream common share, that number of Deutsche Telekom shares equal in value to $500 based on a calculated average price of the Deutsche Telekom ordinary shares in euros on the Frankfurt Stock Exchange during a measurement period close to the time the Deutsche Telekom/VoiceStream merger is completed, converted into dollars at an exchange rate of one euro to 0.9216 U.S. dollars, with cash paid in lieu of fractional shares. However, if the calculated average price would otherwise be 33 euros or less, the price of a Deutsche Telekom ordinary share will be deemed to be 33 euros for purposes of the calculation. In addition, the euro to dollar exchange rate is fixed at one euro to 0.9216 U.S. dollars, even if the exchange rate at the time of the merger is lower than 0.9216. In this example, if the price of Deutsche Telekom shares is lower than 33 euros at the time of the merger or if the exchange rate between the euro and U.S. dollar is lower than the fixed one euro to 0.9216 U.S. dollar exchange rate at that time, the value of Deutsche Telekom shares you receive generally would be less than the $500 value of the cash adjustment.

Other Potential Adjustments. The amount and form of the Deutsche Telekom/VoiceStream merger consideration will be adjusted in the event that before the completion of the Deutsche Telekom/VoiceStream merger:

- a reclassification, split-up, stock-split, reverse stock-split, stock dividend, stock combination, recapitalization, redenomination of share capital, merger or similar transaction or an exchange offer causes a change to the Deutsche Telekom ordinary shares outstanding, or the number of Deutsche Telekom ordinary shares represented by a Deutsche Telekom ADS is changed; or

- all of the outstanding Deutsche Telekom ordinary shares, or more than 80% of the outstanding Deutsche Telekom ordinary shares pursuant to an exchange offer for all outstanding Deutsche Telekom shares, are changed into or exchanged for a different number or kind of shares of Deutsche Telekom, or into shares of another entity owning more than 80% of the Deutsche Telekom shares.

For example, if prior to completion of the Deutsche Telekom/VoiceStream merger, Deutsche Telekom, in order to facilitate future acquisitions, were to establish a new German holding company that acquired through an exchange offer more than 80% of the outstanding Deutsche Telekom shares, holders of VoiceStream common shares would receive shares of the new holding company instead of Deutsche Telekom shares in the Deutsche Telekom/VoiceStream merger.

Treatment of Other Capital Stock, Warrants and Exchange Rights

2 1/2% Convertible Junior Preferred Shares. On ____________, 2000, a subsidiary of Hutchison Whampoa Ltd. converted each 2 1/2% convertible junior preferred share of VoiceStream, par value $0.001 per share, into VoiceStream common shares, at the conversion rate of $29 per VoiceStream common share according to the terms of that series of VoiceStream preferred shares.

Omnipoint 7% Convertible Preferred Shares. If the Deutsche Telekom/VoiceStream merger is not completed before May 1, 2001, then at any time on or after May 1, 2001 until the Deutsche Telekom/VoiceStream merger is completed, Deutsche Telekom may, subject to some restrictions, require VoiceStream to issue a notice of redemption with respect to all the shares of 7% cumulative convertible preferred shares, par value $0.001, of Omnipoint. The redemption price will be the redemption price in effect on the redemption date, as provided by the terms of that series of preferred shares. If all the 7% convertible preferred shares have not been redeemed before the Deutsche Telekom/VoiceStream merger is completed, holders become entitled to receive Deutsche Telekom ordinary shares and/or a cash payment and:

- any Deutsche Telekom ordinary shares to which the holders are entitled will be issued by a special trust established for the benefit of the holders of the 7% convertible preferred shares; and

- any cash payment to which the holders are entitled will be paid by Deutsche Telekom.

Voting Preferred Shares Issued to Deutsche Telekom. The VoiceStream voting preferred shares acquired by Deutsche Telekom under the investment agreements described under "-- The Deutsche Telekom Investment Agreements" will remain outstanding and will not be affected by the Deutsche Telekom/VoiceStream merger.

Omnipoint Warrants. If any of the warrants granted pursuant to the Omnipoint remainder warrant certificate have not been exercised before the Deutsche Telekom/VoiceStream merger is completed the holders of warrants become entitled to Deutsche Telekom ordinary shares at any time after the Deutsche Telekom/VoiceStream merger, any Deutsche Telekom ordinary shares to which the warrant holder becomes entitled will be issued from a special trust established for the benefit of the warrant holders and any cash to which the warrant holder becomes entitled will be paid by Deutsche Telekom. These warrants expire by their terms on August 2, 2001.

Cook Inlet Exchange Rights. If any of the Cook Inlet Partners receive VoiceStream common shares before the Deutsche Telekom/VoiceStream merger is completed as a result of exercising their rights to exchange interests in any of the Cook Inlet Joint Ventures or their affiliates for VoiceStream common shares, such Cook Inlet Partners will have all the rights with respect to those VoiceStream common shares which a VoiceStream stockholder has.

To the extent that any of the Cook Inlet Partners have not received VoiceStream common shares before the Deutsche Telekom/VoiceStream merger is completed in respect of their exchange rights, those Cook Inlet Partners will be entitled to receive the consideration that they are entitled to receive pursuant to their exchange rights.

To the extent that any of the Cook Inlet Partners are entitled to receive Deutsche Telekom shares on or after the date the Deutsche Telekom/VoiceStream merger is completed, the Deutsche Telekom shares will be delivered from a special trust established for the benefit of such Cook Inlet Partners, and any cash to which such Cook Inlet Partners become entitled will be paid by Deutsche Telekom.

The "Cook Inlet Partners" are Cook Inlet Telecommunications, Inc., SSPCS Corporation, Providence Media Partners L.P., Cook Inlet GSM Inc., Providence Media Partners III L.P., Providence Equity Operating Partners III and any entity or entities designated as such by Deutsche Telekom and VoiceStream for purposes of the Deutsche Telekom/VoiceStream merger agreement.

The "Cook Inlet Joint Ventures" are Cook Inlet VoiceStream PV/SS PCS, L.P., Cook Inlet VoiceStream PCS, LLC, Cook Inlet/VS GSM II PCS, LLC, Cook Inlet/VS GSM III PCS, LLC and any entity or entities designated as such by Deutsche Telekom and VoiceStream for purposes of the Deutsche Telekom/VoiceStream merger agreement.

Election and Exchange of Certificates Representing VoiceStream Common Shares

Deutsche Telekom will appoint an escrow agent to serve in connection with the Deutsche Telekom/VoiceStream merger.

At least 45 days before the Deutsche Telekom/VoiceStream merger is expected to be completed, Deutsche Telekom and VoiceStream intend to mail to each registered holder of VoiceStream common shares an election form with instructions for making the all-stock election or the all-cash election or for receiving the mixed consideration, and a letter of transmittal that the holder must properly complete and deliver to the escrow agent with the holder's VoiceStream share certificates before the election deadline. Any registered holder of VoiceStream common shares that fails to submit properly completed election forms or to deliver share certificates before the election deadline will be deemed to have made a mixed election and will automatically receive $30 in cash and 3.2 Deutsche Telekom shares, subject to adjustment, when the holder delivers to the escrow agent the holder's VoiceStream share certificates, together with a properly completed letter of transmittal.

The election deadline will be five business days before the Deutsche Telekom/VoiceStream merger is expected to be completed. Since the actual election deadline is not yet known, Deutsche Telekom and VoiceStream will use their best efforts to make a public announcement notifying VoiceStream stockholders of the election deadline at least five business days before that deadline. Any holder may revoke in writing that holder's previously submitted election forms until the election deadline.

If you own VoiceStream common shares in "street name" through a bank, broker or other financial institution and wish to make an all-stock or all-cash election, you should seek advice from the financial institution concerning making such election.

The escrow agent will exchange VoiceStream share certificates for American depositary receipts representing Deutsche Telekom ADSs or, if a VoiceStream stockholder properly elects, certificates representing Deutsche Telekom ordinary shares. The election forms and the letter of transmittal mailed to VoiceStream stockholders will contain an "ordinary share election" form that can be used by a stockholder to elect to receive that stockholder's stock consideration in Deutsche Telekom ordinary shares.

After a record holder of VoiceStream common shares delivers certificates for those shares and a properly completed letter of transmittal to the escrow agent, the escrow agent will deliver to that holder:

- the number of whole Deutsche Telekom ADSs or Deutsche Telekom ordinary shares included in the Deutsche Telekom/VoiceStream merger consideration in respect of those VoiceStream common shares, subject to proration and adjustment; and

- a check in the amount, after giving effect to any required tax withholdings, of:

-- any cash consideration payable to that holder; plus

-- cash in lieu of any fractional interest in Deutsche Telekom ADSs or Deutsche Telekom ordinary shares on the terms described below; plus

-- any cash dividends or other distributions that the holder has the right to receive, including dividends or other distributions payable with respect to the holders of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares with a record date after the completion of the

Deutsche Telekom/VoiceStream merger and a payment date on or before the date the holder properly delivers VoiceStream share certificates to the escrow agent.

The escrow agent will not deliver fractional Deutsche Telekom ADSs or fractional Deutsche Telekom ordinary shares in connection with the Deutsche Telekom/VoiceStream merger. Instead, each holder of VoiceStream common shares exchanged in the Deutsche Telekom/VoiceStream merger that would otherwise have received a fraction of a Deutsche Telekom ADS or Deutsche Telekom ordinary share will be entitled to receive a cash payment representing that holder's proportionate interest in the net proceeds from the sale by the escrow agent of the aggregate of the fractions of Deutsche Telekom ADSs and Deutsche Telekom ordinary shares that would otherwise be issued on the NYSE and the Frankfurt Stock Exchange, respectively. Deutsche Telekom will pay all commissions, transfer taxes and out-of-pocket costs, including the expenses and compensation of the escrow agent, incurred in connection with the sale of the Deutsche Telekom ADSs and Deutsche Telekom ordinary shares.

VoiceStream common shares that are surrendered to the escrow agent will be canceled. No interest will be paid or accrued on any amount payable to holders of VoiceStream common shares. In addition, no holder of VoiceStream common shares will receive any dividends or other distributions with respect to Deutsche Telekom ADSs or Deutsche Telekom ordinary shares to which the holder is entitled under the Deutsche Telekom/VoiceStream merger agreement until that holder's VoiceStream share certificate is surrendered to the escrow agent with a properly completed letter of transmittal.

If any Deutsche Telekom ADSs or Deutsche Telekom ordinary shares are to be delivered to a person other than the registered holder of the VoiceStream common shares represented by the VoiceStream share certificates surrendered to the escrow agent:

- such VoiceStream share certificates must be properly endorsed or otherwise be in proper form for transfer; and

- the person requesting delivery must pay to the escrow agent any transfer or other taxes required as a result of delivery to a person other than the registered holder, or establish, to the satisfaction of the escrow agent, that the tax has been paid or is not payable.

Treatment of Options and Restricted Stock

VoiceStream Options. If the Deutsche Telekom/VoiceStream merger is completed, each outstanding VoiceStream stock option will be converted into an option to acquire, from a trust established for the benefit of holders of VoiceStream stock options, 3.7647 Deutsche Telekom ordinary shares for each VoiceStream common share subject to that VoiceStream option rounded if necessary to the nearest whole Deutsche Telekom ordinary share. The exercise price per Deutsche Telekom ordinary share for each of these options will be the exercise price per VoiceStream common share applicable to that option before completion of the Deutsche Telekom/VoiceStream merger divided by 3.7647. The replacement options generally will have the same terms and conditions as were applicable under VoiceStream option plans.

VoiceStream Restricted Shares. If the Deutsche Telekom/VoiceStream merger is completed, each outstanding VoiceStream restricted share will be converted into a right to receive, from a trust established for the benefit of holders of VoiceStream restricted shares, 3.7647 Deutsche Telekom shares. The Deutsche Telekom ordinary shares issued to the former holders of VoiceStream restricted shares will have the same terms and conditions and be subject to the same vesting provisions as were applicable under the VoiceStream restricted share award plans.

Dissenting Shares

If appraisal rights for any VoiceStream shares are perfected by any stockholder, then those shares will be treated as described under "The Deutsche Telekom/VoiceStream Merger -- Appraisal Rights."

Representations and Warranties

The Deutsche Telekom/VoiceStream merger agreement contains a number of representations and warranties made by VoiceStream and Deutsche Telekom to each other, including those regarding:

- due organization, good standing and qualification;

- capital structure;

- corporate authority to enter into the Deutsche Telekom/VoiceStream merger agreement and lack of conflicts with corporate governance documents, contracts or laws;

- governmental filings;

- accuracy of SEC reports, financial statements and information provided to the other party;

- absence of certain material changes or events since December 31, 1999;

- absence of undisclosed liabilities and pending litigation;

- compliance with laws;

- permits and licenses;

- finders or brokers fees;

- tax matters, including the absence of facts inconsistent with the qualification of the Deutsche Telekom/VoiceStream merger as a reorganization under Section 368(a) of the U.S. tax code, or that would cause a stockholder of VoiceStream to recognize gain pursuant to Section 367(a) of the U.S. tax code;

In addition, VoiceStream made representations and warranties to Deutsche Telekom as to:

- employee benefit plans;

- labor matters;

- the receipt of a fairness opinion from a financial advisor; and

- intellectual property.

In addition, the Deutsche Telekom/VoiceStream merger agreement contains representations and warranties made by merger subsidiary to VoiceStream regarding some of the above matters.

Conduct of Business Pending the Deutsche Telekom/VoiceStream Merger

Covenants of VoiceStream. VoiceStream has agreed that, until the Deutsche Telekom/VoiceStream merger is completed, it will carry on its and its subsidiaries' business in the ordinary course. VoiceStream also has agreed that, until the Deutsche Telekom/VoiceStream merger is completed, it will use commercially reasonable efforts to preserve substantially intact its business organizations, keep available the services of those of its officers, employees and consultants who are integral to the business and maintain its existing relations and goodwill with customers, suppliers and others with whom it does business.

In addition, VoiceStream has agreed that before the Deutsche Telekom/VoiceStream merger is completed it will not take the actions listed in the Deutsche Telekom/VoiceStream merger agreement, which includes the following actions, without Deutsche Telekom's prior written consent, except under limited circumstances specified in the Deutsche Telekom/VoiceStream merger agreement:

- issue any new shares of capital stock or any options or other rights to acquire those shares;

- split, combine or reclassify any of its outstanding capital shares;

- declare or pay dividends or distributions with respect to VoiceStream common shares;

- redeem, purchase or otherwise acquire any shares of VoiceStream capital stock;

- make capital expenditures in excess of the aggregate annual amount contained in VoiceStream's business plan for the year 2000;

- incur material indebtedness;

- grant severance or termination pay, stay bonus, or other incentive arrangements;

- except in the ordinary course of business, make any payments under any VoiceStream employee benefit plans to any director or officer of, or independent contractor or consultant to, VoiceStream or any of its subsidiaries;

- enter into or amend any employment or consulting agreement of the type that would require disclosure to Deutsche Telekom pursuant to the representations VoiceStream made in the Deutsche Telekom/VoiceStream merger agreement concerning employee benefits related matters;

- grant new awards under an existing VoiceStream benefit plan, except in the ordinary course of business, or grant new equity-based rights;

- file material amended tax returns or settle material tax audits or other material tax proceedings;

- change in any respect its method of tax accounting or tax practice or its accounting policies or modify any actuarial cost method or practice used in determining costs and obligations for any VoiceStream benefit plans, except as required by U.S. GAAP and except as would not have a material adverse effect on VoiceStream;

- take any action that would materially impair or delay the obtaining of the necessary regulatory approvals to complete the Deutsche Telekom/VoiceStream merger;

- take any action that would:

-- prevent or impede the Deutsche Telekom/VoiceStream merger from qualifying as a reorganization within the meaning of Section 368(a) of the U.S. tax code; or

-- cause VoiceStream stockholders to recognize gain in the Deutsche Telekom/VoiceStream merger under Section 367(a)(1) of the U.S. tax code;

- take any action that would cause the VoiceStream common shares to cease to be quoted on the Nasdaq Stock Market;

- except as may be required by the terms of any existing VoiceStream award agreement, accelerate the vesting or payment of any equity or equity-based award;

- materially increase the compensation payable to an officer or director;

- agree to enter into a merger or similar business combination as a result of which VoiceStream stockholders will receive consideration in exchange for their shares; and

- authorize or enter into a material joint venture or an agreement that has a non-competition provision applicable to the business of VoiceStream or its subsidiaries, other than agreements that do not affect VoiceStream's business outside the United States and that are in the ordinary course, consistent with past practice in respect of certain VoiceStream joint ventures.

Acquisitions by VoiceStream. VoiceStream generally has agreed that, until the Deutsche Telekom/VoiceStream merger is completed, it and its subsidiaries will not engage in an acquisition transaction, including any acquisitions of additional FCC licenses or increase an investment in another entity, with three significant exceptions:

- VoiceStream is permitted to swap or exchange any of its property for similar property of substantially equivalent value, subject to specified limitations;

- VoiceStream is permitted to make acquisitions of up to $750 million, including assumptions of debt, without Deutsche Telekom's consent as long as the consideration paid in any single acquisition does

not exceed $500 million, including assumptions of debt, and does not include any VoiceStream shares; and

- VoiceStream may make any other acquisition, and the acquisition may include VoiceStream shares as part of the consideration paid, as long as the acquisition is approved in advance by an acquisition committee established under the Deutsche Telekom/VoiceStream merger agreement.

In addition, if VoiceStream chooses to participate in any auction of FCC licenses or spectrum rights, VoiceStream and Deutsche Telekom have agreed to cooperate in accordance with specific procedures to agree upon maximum amounts that VoiceStream may bid in the auction. If the acquisition committee denies its consent to an acquisition proposed by VoiceStream, or VoiceStream and the acquisition committee fail to agree upon maximum bids for a license or spectrum auction prior to the tenth business day preceding the scheduled auction date, then the parties have agreed that any officer, director, stockholder or affiliate of VoiceStream, or any combination of them, may make such acquisition or participate in such auction for his, her, its or their own account.

Dispositions by VoiceStream. VoiceStream generally has agreed that, until the Deutsche Telekom/VoiceStream merger is completed, it and its subsidiaries will not sell or dispose of any of their assets, with three significant exceptions:

- VoiceStream may swap or exchange any of its property for similar property of substantially equivalent value, subject to specified limitations;

- VoiceStream may sell or dispose of assets in the ordinary course of business consistent with past practice; and

- VoiceStream may sell or dispose of assets as may be required by law or any governmental or regulatory authority as necessary to enable or facilitate completion of the Deutsche Telekom/VoiceStream merger.

Covenants of Deutsche Telekom. Except as contemplated by the Deutsche Telekom/VoiceStream merger agreement, Deutsche Telekom has agreed that, before the Deutsche Telekom/VoiceStream merger is completed, Deutsche Telekom and its subsidiaries will not take the actions listed in the Deutsche Telekom/VoiceStream merger agreement, which includes the following actions, without VoiceStream's prior written consent:

- except for the purpose of using or increasing Deutsche Telekom's authorized capital or as necessary for the conduct of its business, amend or propose to amend the memorandum and articles of association or management board rules of procedure or other comparable organizational document of Deutsche Telekom in any manner that would be adverse to VoiceStream or its stockholders;

- declare or pay dividends payable in cash, stock, property or otherwise with respect to Deutsche Telekom capital stock, except for regular annual cash dividends in a manner consistent with past practice;

- repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exercisable for or into shares of its capital stock, except for repurchases, redemptions or acquisitions not exceeding 10% of the total number of Deutsche Telekom ordinary shares outstanding;

- reclassify, recapitalize, restructure or engage in a similar transaction that results in the, direct or indirect, receipt by holders of Deutsche Telekom ordinary shares of any assets, property or cash for Deutsche Telekom ordinary shares;

- take action that would be reasonably likely to prevent or impede the Deutsche Telekom/VoiceStream merger from qualifying as a reorganization within the meaning of Section 368(a) of the U.S. tax code or cause VoiceStream stockholders to recognize gain under Section 367(a)(1) of the U.S. tax code in the Deutsche Telekom/VoiceStream merger; and

- take action that would materially impair or delay the obtaining of the necessary regulatory approvals to complete the Deutsche Telekom/VoiceStream merger.

- Important Exception: Deutsche Telekom may make acquisitions as long as the acquisitions, individually or in the aggregate, are not reasonably likely to prevent the completion of the Deutsche Telekom/VoiceStream merger.

Offers for Alternative Transactions

VoiceStream has agreed not to, has agreed not to authorize its officers, directors or employees to, and has agreed to use its reasonable efforts to cause its advisors and representatives not to:

- solicit, initiate or knowingly encourage, or knowingly take any other action designed to facilitate, any alternative transaction, which we define below, to the Deutsche Telekom/VoiceStream merger; or

- participate in any substantive discussions or negotiations regarding any alternative transaction to the Deutsche Telekom/VoiceStream merger.

However, if, at any time before VoiceStream stockholders approve the Deutsche Telekom/VoiceStream merger, VoiceStream receives an unsolicited proposal for an alternative transaction, then VoiceStream may, after giving Deutsche Telekom 48 hours advance notice:

- furnish information with respect to VoiceStream pursuant to a confidentiality agreement substantially similar to the confidentiality agreement in place between VoiceStream and Deutsche Telekom; and

- engage in discussions and negotiations with the persons that made such proposal,

but only if:

- the VoiceStream board of directors has determined in good faith that providing information to the third party or participating in negotiations or discussions could be reasonably expected to result in a superior proposal, which we define below, being made; and

- VoiceStream is not otherwise in breach of its obligations described above not to solicit or engage in discussions regarding an alternative transaction.

Important Definitions

"alternative transaction" means any of the following:

- a transaction or series of transactions in which any third party would acquire, directly or indirectly, beneficial ownership of more than 20% of the outstanding VoiceStream shares;

- any acquisition of or business combination with VoiceStream or any of its significant subsidiaries by a merger or other business combination, other than any transaction that would be permitted under the Deutsche Telekom/VoiceStream merger agreement; or

- any transaction in which any third party would acquire, directly or indirectly, control of assets of VoiceStream or any of its subsidiaries for consideration equal to 20% or more of the fair market value of all of the outstanding VoiceStream common shares.

"superior proposal" means any proposal made by a third party to enter into an alternative transaction which the VoiceStream board of directors determines in its good faith judgment to be more favorable to VoiceStream's stockholders than the Deutsche Telekom/VoiceStream merger.

VoiceStream also has agreed to notify Deutsche Telekom promptly of any request for information or of any proposal in connection with an alternative transaction, including the material terms of the request or proposal and the identity of the person making it, and VoiceStream has agreed to keep Deutsche Telekom informed of the status of any alternative transaction. In addition, VoiceStream agreed to cease any solicitations, discussions or negotiations that existed at the time the Deutsche Telekom/VoiceStream merger agreement was signed.

VoiceStream Board of Directors' Recommendation

The Deutsche Telekom/VoiceStream merger agreement requires the VoiceStream board of directors:

- to recommend that the VoiceStream stockholders approve the Deutsche Telekom/VoiceStream merger agreement;

- not to withdraw, modify or qualify, or to propose publicly to withdraw, modify or qualify, its recommendation in a manner adverse to Deutsche Telekom;

- not to approve or recommend, or to propose publicly to approve or recommend, any alternative transaction; and

- not to cause VoiceStream to agree to engage in any alternative transactions.

However, if the VoiceStream board of directors receives a superior proposal before VoiceStream stockholders approve the Deutsche Telekom/VoiceStream merger, the VoiceStream board of directors may inform VoiceStream stockholders that it no longer recommends approval of the Deutsche Telekom/VoiceStream merger, if:

- VoiceStream sends Deutsche Telekom written notice that VoiceStream has received a superior proposal, which notice describes the terms of the superior proposal and identifies the proposer, and that VoiceStream intends to change its recommendation regarding the Deutsche Telekom/ VoiceStream merger; and

- two business days have passed since Deutsche Telekom received the notice. In addition, during those two business days, VoiceStream must give Deutsche Telekom reasonable opportunity to make adjustments in the terms of the Deutsche Telekom/VoiceStream merger agreement that would enable the VoiceStream board of directors to maintain its recommendation to approve the Deutsche Telekom/VoiceStream merger.

The Deutsche Telekom/VoiceStream merger agreement also permits VoiceStream to comply with Rule 14d-9 or Rule 14e-2(a) under the Exchange Act or to make any other disclosure to VoiceStream stockholders if, in the good faith judgment of the VoiceStream board of directors, after receipt of advice from outside counsel, failure to disclose would result in a reasonable likelihood that the VoiceStream board of directors would breach its duties to VoiceStream stockholders under applicable law.

Submission of Deutsche Telekom/VoiceStream Merger Agreement to Stockholder Vote. The Deutsche Telekom/VoiceStream merger agreement requires VoiceStream to submit the Deutsche Telekom/VoiceStream merger agreement to a stockholder vote at the VoiceStream special meeting even if the VoiceStream board of directors no longer recommends approval of the Deutsche Telekom/VoiceStream merger.

Additional Agreements

The Deutsche Telekom/VoiceStream merger agreement contains a number of other covenants and agreements by or between VoiceStream and Deutsche Telekom on subjects, including:

- filing accurate financial statements with the SEC;

- notifying the other party of the occurrence of material facts, events or circumstances;

- using reasonable best efforts to obtain necessary tax opinions and representation letters; and

- using reasonable best efforts to cause the Deutsche Telekom/VoiceStream merger to qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code and to avoid gain recognition to VoiceStream shareholders in the Deutsche Telekom/VoiceStream merger under Section 367(a)(1) of the U.S. tax code.

In addition, Deutsche Telekom has agreed to take all steps necessary to cause the new Deutsche Telekom ADSs and the Deutsche Telekom ordinary shares to become listed on the Frankfurt Stock Exchange and the NYSE, respectively.

VoiceStream's Nominations to Deutsche Telekom Organizational Bodies

Deutsche Telekom has agreed that, after the Deutsche Telekom/VoiceStream merger is completed, it will use all reasonable efforts to recommend to the Deutsche Telekom shareholders and the Deutsche Telekom organizational bodies that one current member of the Deutsche Telekom supervisory board be replaced by a person nominated by VoiceStream. Deutsche Telekom has agreed that, after the Deutsche Telekom/VoiceStream merger is completed, it will use all reasonable efforts to cause its T-Mobile subsidiary to recommend to the shareholders and organizational bodies of T-Mobile that one VoiceStream nominee be appointed or elected to each of the T-Mobile management board, T-Mobile supervisory board and the T-Mobile executive committee. It is currently contemplated that Mr. John W. Stanton, the Chief Executive Officer of VoiceStream, would be the nominee appointed to the T-Mobile International management board.

The VoiceStream nominees will be selected in consultation with Deutsche Telekom and must be reasonably acceptable to Deutsche Telekom.

Efforts to Complete the Deutsche Telekom/VoiceStream Merger

VoiceStream and Deutsche Telekom have agreed:

- to take or cause to be taken all actions and to do or cause to be done all things necessary, proper or advisable to complete the Deutsche Telekom/VoiceStream merger and to permit the issuance of the Deutsche Telekom/VoiceStream merger consideration under German law and the rules of the Frankfurt Stock Exchange;

- to obtain in a timely manner all necessary consents, permits, approvals or waivers from any governmental or regulatory authority which are necessary for the completion of the Deutsche Telekom/VoiceStream merger;

- to promptly prepare and file all required notifications under U.S. and European Union antitrust laws and to comply with any requests for additional information, and obtain termination of any applicable waiting periods or obtain any required approvals as promptly as practicable; and

- to take all actions within its control necessary to obtain any required regulatory approvals (which the Deutsche Telekom/VoiceStream merger agreement limits principally to any required FCC approval, antitrust clearances and clearances under the Exon-Florio Defense Protection Act of 1956).

Important Exception: Neither VoiceStream nor Deutsche Telekom is required to take any of the actions described above that would result in a "burdensome condition." The meaning of "burdensome condition" is explained under "-- Important Definitions."

Indemnification and Insurance

For a period of six years after the Deutsche Telekom/VoiceStream merger is completed, the surviving corporation of the Deutsche Telekom/VoiceStream merger is required by the Deutsche Telekom/VoiceStream merger agreement to:

- maintain in effect the current arrangements regarding indemnification of officers and directors of VoiceStream and each of its subsidiaries;

- indemnify the directors and officers of VoiceStream to the fullest extent to which VoiceStream is permitted to indemnify those officers and directors under its charter and bylaws and applicable law; and

- maintain VoiceStream's current policies of directors' and officers' insurance with respect to claims arising from facts or events which occurred on or before the completion of the Deutsche Telekom/VoiceStream merger, except that the surviving corporation may substitute policies of at least the same coverage and amounts.

However, during that six-year period, the surviving corporation is not required to expend in any year an amount in excess of 250% of the annual aggregate premiums currently paid by VoiceStream for such coverage. If the aggregate expenditure on coverage exceeds that amount, Deutsche Telekom has agreed that the surviving corporation will use its best efforts to obtain as much insurance as can be obtained for that amount.

In addition, after the completion of the Deutsche Telekom/VoiceStream merger both Deutsche Telekom and the surviving corporation will indemnify each present and former director, officer, employee and agent of VoiceStream or any of its subsidiaries against any costs or expenses arising prior to the completion of the Deutsche Telekom/VoiceStream merger and will also pay each indemnified party's out-of-pocket expenses incurred in connection with any indemnifiable claim.

Employee Benefits

Following the completion of the Deutsche Telekom/VoiceStream merger, Deutsche Telekom will cause the surviving corporation or its successor to honor all VoiceStream employee benefit plans and compensation arrangements and agreements in accordance with their terms as in effect immediately before the Deutsche Telekom/VoiceStream merger is completed. In addition, Deutsche Telekom has agreed that for a period of not less than two years following the completion of the Deutsche Telekom/VoiceStream merger, the current and former employees of VoiceStream and its subsidiaries will be provided with compensation, severance and employee benefits that are not less favorable in the aggregate than those provided to VoiceStream's employees immediately before the completion of the Deutsche Telekom/ VoiceStream merger. Discretionary equity and equity-based awards will remain discretionary.

Following the completion of the Deutsche Telekom/VoiceStream merger, each current and former employee of VoiceStream and its subsidiaries will be immediately eligible to participate in any new Deutsche Telekom employee benefit plan, to the extent that such plan replaces coverage under a comparable VoiceStream employee benefit plan or compensation agreement or arrangement in which the employee participated immediately before the completion of the Deutsche Telekom/VoiceStream merger. The Deutsche Telekom/VoiceStream merger agreement also specifies the treatment of pre-existing conditions, deductibles and service credit with respect to current and former employees of VoiceStream under any benefit plans of Deutsche Telekom or its subsidiaries that any current or former employees of VoiceStream participate in after completion of the Deutsche Telekom/VoiceStream merger.

VoiceStream and Deutsche Telekom agreed in the Deutsche Telekom/VoiceStream merger agreement to cooperate to develop a mutually acceptable retention plan for senior management employees of VoiceStream. Pursuant to this agreement, Deutsche Telekom and VoiceStream plan to enter into a retention agreement pursuant to which Deutsche Telekom has agreed that, after the completion of the Deutsche Telekom/VoiceStream merger, Deutsche Telekom will amend and convert the VoiceStream Management Incentive Stock Option Plan to permit the issuance after completion of the merger of options to purchase Deutsche Telekom ordinary shares to management employees and key personnel of VoiceStream. In order to effectuate the conversion, Deutsche Telekom will establish a trust and deliver to the trust 8 million Deutsche Telekom ordinary shares to be used to satisfy the obligations upon exercise of any retention options. During the period from the date of completion of the Deutsche Telekom/VoiceStream merger through December 31, 2004, Deutsche Telekom will cause the trust to issue retention options to management employees and key personnel of VoiceStream substantially on terms set forth in the VoiceStream Management Incentive Stock Option Plan, as amended from time to time by Deutsche Telekom.

Additionally, Deutsche Telekom and VoiceStream have agreed that VoiceStream shall offer to 31 management personnel, who now hold, in the aggregate, unvested options to acquire 574,368 VoiceStream common shares, and which options provide for vesting upon a change of control of

VoiceStream, which would occur upon approval by VoiceStream stockholders of the Deutsche Telekom/ VoiceStream merger, an opportunity to receive additional options in an amount equal to, and on the same terms and conditions, including exercise price, as, their existing unvested options if they agree to waive the change of control vesting provisions of their existing options. If all such persons accept the offer, options to acquire an aggregate of an additional 574,368 shares of VoiceStream common shares would be issued.

Prior to completion of the Deutsche Telekom/VoiceStream merger, VoiceStream may implement a stay bonus plan for management, which is described under "The Deutsche Telekom/VoiceStream Merger -- Interests of Directors and Officers of VoiceStream in the Deutsche Telekom/VoiceStream Merger -- Stay Bonus Plan."

Closing Conditions

Conditions to Each Party's Obligations to Complete the Deutsche Telekom/VoiceStream Merger. VoiceStream's and Deutsche Telekom's respective obligations to complete the Deutsche Telekom/VoiceStream merger are subject to the satisfaction or waiver of conditions, including the following:

- Stockholder Approval. The holders of a majority of the voting power of the VoiceStream common shares and voting preferred shares, voting together as a single class, having approved and adopted the Deutsche Telekom/VoiceStream merger agreement.

- Legality. The absence of any law, order or injunction enacted or entered by any governmental or regulatory authority having the effect of making the Deutsche Telekom/VoiceStream merger illegal or otherwise prohibiting the completion of the Deutsche Telekom/VoiceStream merger.

- Registration Statement Effective. No stop order suspending the effectiveness of the Form F-4 registration statement or the proxy statement/prospectus then being in effect and no proceedings for that purpose then being threatened by the SEC or having been initiated by the SEC and not being concluded or withdrawn.

- Stock Exchange Listings.

-- All steps necessary for the Deutsche Telekom ordinary shares that will be issued in the Deutsche Telekom/VoiceStream merger to be listed on the Frankfurt Stock Exchange having been taken; and

-- The Deutsche Telekom ADSs that will be issued in the Deutsche Telekom/VoiceStream merger having been authorized for listing on the NYSE, subject to official notice of issuance.

- Required Regulatory Approvals. Without subjecting VoiceStream or Deutsche Telekom to any "burdensome condition" described under "-- Important Definitions," all required regulatory approvals having been obtained and all applicable waiting periods having expired, as described under "Regulatory Approvals -- Regulatory Approvals Required for the Deutsche Telekom/VoiceStream Merger and the Deutsche Telekom/Powertel Merger."

Additional Conditions to the Obligations of VoiceStream. The obligations of VoiceStream to effect the Deutsche Telekom/VoiceStream merger are also subject to the satisfaction, or waiver by VoiceStream, of conditions, including the following:

- Representations and Warranties True and Correct.

-- Deutsche Telekom's representation that, since December 31, 1999, there has not been any material adverse effect on Deutsche Telekom, will have been true and correct when the Deutsche Telekom/VoiceStream merger agreement was entered into and as of the date the Deutsche Telekom/VoiceStream merger is completed; and

-- other representations and warranties of Deutsche Telekom and merger subsidiary in the Deutsche Telekom/VoiceStream merger agreement having been true and correct with respect to Deutsche Telekom, when the Deutsche Telekom/VoiceStream merger agreement was

entered into and with respect to merger subsidiary when it was amended and restated and with respect to Deutsche Telekom and merger subsidiary as of the date the Deutsche Telekom/VoiceStream merger is completed, except to the extent that any representation or warranty expressly speaks as of an earlier date, in which case that representation or warranty having been true and correct as of that date,

(a) except for inaccuracies caused by changes permitted by the Deutsche Telekom/VoiceStream merger agreement; and

(b) except for such failures which in the aggregate would not reasonably be expected to result in a material adverse effect on Deutsche Telekom.

- Compliance with Covenants. Deutsche Telekom having complied in all material respects with all its agreements and covenants required by the Deutsche Telekom/VoiceStream merger agreement to be complied with by the completion of the Deutsche Telekom/VoiceStream merger.

- Receipt of Tax Opinion. VoiceStream having received an opinion of Jones, Day, Reavis & Pogue and/or Wachtell, Lipton, Rosen & Katz substantially to the effect that for U.S. federal income tax purposes:

-- the Deutsche Telekom/VoiceStream merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code; and

-- each transfer of property to Deutsche Telekom by a stockholder of VoiceStream pursuant to the Deutsche Telekom/VoiceStream merger will not be subject to Section 367(a)(1) of the U.S. tax code.

Additional Conditions to the Obligations of Deutsche Telekom. The obligations of Deutsche Telekom to effect the Deutsche Telekom/VoiceStream merger are also subject to the satisfaction, or waiver by Deutsche Telekom, of conditions, including the following:

- Representations and Warranties True and Correct.

-- VoiceStream's representation that, since December 31, 1999, there has not been any material adverse effect on VoiceStream will have been true and correct when the Deutsche Telekom/ VoiceStream merger agreement was entered into and as of the date the Deutsche Telekom/ VoiceStream merger is completed; and

-- other representations and warranties of VoiceStream in the Deutsche Telekom/VoiceStream merger agreement having been true and correct when the Deutsche Telekom/VoiceStream merger agreement was entered into and as of the date the Deutsche Telekom/VoiceStream merger is completed (except to the extent that any representation or warranty expressly speaks as of an earlier date, in which case that representation or warranty having been true and correct as of that date)

(1) except for inaccuracies caused by changes permitted by the Deutsche Telekom/VoiceStream merger agreement; and

(2) except for such failures which in the aggregate would not reasonably be expected to result in a material adverse effect on VoiceStream.

- Compliance with Covenants. VoiceStream having complied in all material respects with all its agreements and covenants required by the Deutsche Telekom/VoiceStream merger agreement to be complied with by the time the Deutsche Telekom/VoiceStream merger is completed.

Waiver of Conditions. In the event VoiceStream waives a material condition to the Deutsche Telekom/VoiceStream merger, VoiceStream will, if legally required, resolicit approval of its stockholders.

Termination and Termination Fee

Right to Terminate. The Deutsche Telekom/VoiceStream merger agreement may be terminated at any time before the closing in any of the following ways:

- by mutual written consent;

- by either Deutsche Telekom and VoiceStream:

-- if the Deutsche Telekom/VoiceStream merger is permanently restrained, enjoined or otherwise prohibited by a governmental order, decree, ruling or other action, and the order, decree, ruling or other action has become final and nonappealable;

-- if in connection with the grant of a requisite regulatory approval, a burdensome condition is imposed and the ruling imposing the condition has become final and nonappealable. The meaning of "burdensome condition" is explained under "-- Important Definitions;"

-- at any time that is not less than 15 days after any statute, rule, decree or injunction has been enacted, entered, promulgated or enforced by any governmental or regulatory authority, other than a court, that has the effect of making any of the conditions to closing described under "-- Closing Conditions -- Legality" and "-- Closing Conditions -- Required Regulatory Approvals" incapable of being satisfied by September 30, 2001, in the case of a termination by VoiceStream, or December 31, 2001, in the case of a termination by Deutsche Telekom; or

-- if VoiceStream's stockholders fail to approve the Deutsche Telekom/VoiceStream merger at the VoiceStream special meeting.

- by VoiceStream:

-- if the Deutsche Telekom/VoiceStream merger is not completed by September 30, 2001, unless VoiceStream's failure to fulfill its obligations under the Deutsche Telekom/VoiceStream merger agreement caused the delay, or if any of the conditions to VoiceStream's obligation to complete the Deutsche Telekom/VoiceStream merger becomes incapable of being satisfied before that date;

-- if Deutsche Telekom breaches or fails to perform any of its representations or covenants in any material respect and the breach or failure cannot be cured by Deutsche Telekom before September 30, 2001, or, if curable, is not cured by Deutsche Telekom within 30 days, and such breach renders any conditions to VoiceStream's obligations incapable of being satisfied by September 30, 2001; or

-- on 48 hours notice to Deutsche Telekom, if the calculated average price of Deutsche Telekom ordinary shares to be used in any tax-related adjustment to the amount of the cash merger consideration is less than 33 euros. The calculated average price of Deutsche Telekom ordinary shares to be used in any adjustment, if necessary, will be the average trading price of Deutsche Telekom ordinary shares on the Frankfurt Stock Exchange on seven trading days randomly selected from the 15 trading days immediately preceding the date on which any adjustment determination is to be made, as described under "-- Consideration to Be Received in the Deutsche Telekom/VoiceStream Merger -- Adjustments."

- by Deutsche Telekom:

-- if the Deutsche Telekom/VoiceStream merger is not completed by December 31, 2001, unless Deutsche Telekom's failure to fulfill its obligations under the Deutsche Telekom/VoiceStream merger agreement caused the delay, or if any of the conditions to Deutsche Telekom's obligation to complete the Deutsche Telekom/VoiceStream merger becomes incapable of being satisfied before that date; or

-- if VoiceStream breaches or fails to perform any of its representations or covenants in any material respect and the breach or failure cannot be cured by VoiceStream before December 31, 2001, or, if curable, is not cured by VoiceStream within 30 days, and such breach renders any conditions to Deutsche Telekom's obligations incapable of being satisfied by December 31, 2001.

- Termination Fees Payable to Deutsche Telekom. VoiceStream has agreed to pay Deutsche Telekom a termination fee of $1 billion if all three of the following events occur:

-- after July 23, 2000 and before the VoiceStream special meeting, a proposal for certain types of alternative transactions is announced or publicly disclosed and not withdrawn;

-- the Deutsche Telekom/VoiceStream merger agreement is terminated by either party because VoiceStream's stockholders do not approve the Deutsche Telekom/VoiceStream merger at the VoiceStream special meeting; and

-- within six months after the termination of the Deutsche Telekom/VoiceStream merger agreement, VoiceStream enters into a definitive agreement with any third party with respect to certain types of alternative transactions.

In that circumstance, VoiceStream would pay to Deutsche Telekom the termination fee no later than one business day after the signing of the definitive agreement with the third party.

For purposes of determining whether a termination fee is payable, the term "alternative transaction" has the meaning described under "-- Offers for Alternative Transactions," except that the 20% thresholds are treated as references to "50%," and mergers or business combinations in which VoiceStream stockholders would continue to hold at least 65% of the outstanding stock of the entity surviving the transaction are not considered to be "alternative transactions".

Expenses

Whether or not the Deutsche Telekom/VoiceStream merger is completed, all costs and expenses incurred in connection with the Deutsche Telekom/VoiceStream merger and the Deutsche Telekom/VoiceStream merger agreement transactions will be paid by the party incurring the expense, except that Deutsche Telekom and VoiceStream will share equally the costs and expenses of filing and printing the Form F-4 registration statement and this document. Deutsche Telekom, VoiceStream and Powertel have each shared equally the costs and expenses of the filing fees paid under the HSR Act.

Amendment; Waiver; Assignment

VoiceStream and Deutsche Telekom and merger subsidiary may amend the Deutsche Telekom/VoiceStream merger agreement by written agreement prior to completion of the Deutsche Telekom/VoiceStream merger, but after VoiceStream's stockholders have approved the Deutsche Telekom/VoiceStream merger agreement, no amendment may be made which by law requires further stockholder approval without such approval being obtained.

At any time before the Deutsche Telekom/VoiceStream merger is completed, VoiceStream and Deutsche Telekom and merger subsidiary may:

- extend the time for the performance of any of the obligations or other acts of the others; and

- waive any inaccuracies in the representations and warranties or compliance with any of the agreements or conditions, contained in the Deutsche Telekom/VoiceStream merger agreement or in any document delivered under the Deutsche Telekom/VoiceStream merger agreement.

Deutsche Telekom, VoiceStream and merger subsidiary may not assign the Deutsche Telekom/VoiceStream merger agreement or any of the rights, interests or obligations under the Deutsche Telekom/

VoiceStream merger agreement, in whole or in part, to any other person, without the prior written consent of the non-assigning party; except that:

- Deutsche Telekom may assign the Deutsche Telekom/VoiceStream merger agreement to a corporation which owns more than 80% of the Deutsche Telekom ordinary shares and which succeeds to all of the rights and obligations of Deutsche Telekom under the Escrow Agency Agreement executed pursuant to the Deutsche Telekom/VoiceStream merger agreement; and

- merger subsidiary may assign the agreement to an entity which is a direct, wholly-owned subsidiary of the entity to which Deutsche Telekom assigned the Deutsche Telekom/VoiceStream merger agreement pursuant to the immediately preceding clause.

Important Definitions

Burdensome Condition. As used in the Deutsche Telekom/VoiceStream merger agreement, "burdensome condition" is a condition that, individually or together with other conditions, would reasonably be expected to have a material adverse effect on Deutsche Telekom or its mobile telecommunications business, in each case assuming that the Deutsche Telekom/VoiceStream merger had been completed and VoiceStream had become a part of Deutsche Telekom or its mobile telecommunications business, and assuming that any other acquisition in the mobile telecommunication industry entered into or completed by Deutsche Telekom after July 23, 2000 had been completed.

Material Adverse Effect. As used in the Deutsche Telekom/VoiceStream merger agreement, a "material adverse effect" on any company means any change in or effect on the business of the company and its subsidiaries that is or is reasonably likely to be materially adverse to the business, operations or financial condition of the company and its subsidiaries, taken as a whole.

However, "material adverse effect" does not include the effects of changes or developments:

- in the telecommunications industry, including regulatory and political conditions, that do not uniquely relate to Deutsche Telekom or VoiceStream;

- in the U.S. or European economy;

- in the U.S. or European securities markets; or

- resulting from the announcement or the existence of the Deutsche Telekom/VoiceStream merger agreement and the transactions contemplated by the Deutsche Telekom/VoiceStream merger agreement.

Only for purposes of the definition of "material adverse effect", some of VoiceStream's joint ventures are treated as subsidiaries of VoiceStream.

Amendment and Restatement

The Deutsche Telekom/VoiceStream merger agreement was originally entered into between Deutsche Telekom and VoiceStream on July 23, 2000. On September 28, the Deutsche Telekom/VoiceStream merger agreement was amended and restated primarily for the purpose of making merger subsidiary a party to the agreement and other technical changes.

DEUTSCHE TELEKOM'S AGREEMENTS WITH STOCKHOLDERS OF VOICESTREAM

In connection with the execution of the Deutsche Telekom/VoiceStream merger agreement, VoiceStream stockholders who, in the aggregate, had sufficient voting power as of the VoiceStream record date to approve the Deutsche Telekom/VoiceStream merger entered into separate agreements with Deutsche Telekom under which the stockholders agreed to vote all of their VoiceStream shares in favor of the Deutsche Telekom/VoiceStream merger. We summarize the material terms of these agreements below, and this summary is qualified in its entirety by reference to the text of the agreements summarized,

copies of which have been filed as exhibits to Deutsche Telekom's and VoiceStream's respective registration statements and are incorporated herein by reference.

The following stockholders and some of their affiliates have entered into stockholder agreements with Deutsche Telekom in connection with the Deutsche Telekom/VoiceStream merger:

Telephone and Data Systems, Inc.
Hutchison Whampoa Ltd.
Sonera Corporation
John W. Stanton
The Goldman Sachs Group, Inc.
Richard Fields and Allen & Company, Incorporated Douglas G. Smith and Avance Capital Madison Dearborn Capital Partners, LP

Agreement to Vote

The agreements with Telephone & Data Systems, Inc., Hutchison Whampoa Ltd., Sonera Corporation, John W. Stanton and Goldman Sachs & Co. obligate each of them to vote all its shares in favor of the Deutsche Telekom/VoiceStream merger and the Deutsche Telekom/VoiceStream merger agreement and to vote all of its shares against any alternative transaction, as defined in the Deutsche Telekom/VoiceStream merger agreement and as discussed under "-- The Deutsche Telekom/ VoiceStream Merger Agreement -- Offers for Alternative Transactions," or the liquidation or winding up of VoiceStream. Each stockholder's obligation to vote in this manner applies whether or not the VoiceStream board of directors continues to recommend the Deutsche Telekom/VoiceStream merger to VoiceStream stockholders.

Transfer Restrictions and Waiver of Rights

Each of the stockholder agreements restricts or limits the ability of the stockholder that is a party to the agreement to sell, transfer, assign or otherwise dispose of VoiceStream common stock or, until six months after completion of the Deutsche Telekom/VoiceStream merger, Deutsche Telekom ADSs or Deutsche Telekom ordinary shares, except with Deutsche Telekom's written consent or as expressly permitted by the stockholder agreement or pursuant to the Deutsche Telekom/VoiceStream merger agreement. In that regard, the stockholder agreements provide that:

- unless the Deutsche Telekom/VoiceStream merger agreement has been terminated, until the later of January 1, 2001 and the date of the VoiceStream special meeting, the stockholder may not sell, transfer, pledge, assign or otherwise dispose of, any VoiceStream shares or rights that are subject to the agreement;

- from the later of January 1, 2001 and the date of the VoiceStream special meeting, until the earlier of the completion of the Deutsche Telekom/VoiceStream merger or the termination of the Deutsche Telekom/VoiceStream merger agreement, the stockholder may sell or transfer up to an aggregate of 17.5% of the number of VoiceStream common shares that are subject to the agreement. This percentage increases to 21.25% on August 1, 2001 and to 25% on September 1, 2001 if the Deutsche Telekom/VoiceStream merger is not completed by those dates;

- from the completion of the Deutsche Telekom/VoiceStream merger through and including the three month anniversary of the completion of the Deutsche Telekom/VoiceStream merger, the stockholder may not sell or transfer any Deutsche Telekom ADSs, Deutsche Telekom ordinary shares or securities convertible into Deutsche Telekom ADSs or Deutsche Telekom ordinary shares that are subject to the agreement;

- from the day following the three month anniversary of the completion of the Deutsche Telekom/VoiceStream merger, through and including the six month anniversary of the completion of the Deutsche Telekom/VoiceStream merger, the stockholder may sell or transfer up to an aggregate of 40% of the total number of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares that is subject to the agreement, as calculated pursuant to the stockholder agreements; and

- after the six month anniversary of the completion of the Deutsche Telekom/VoiceStream merger, all sale and transfer restrictions end.

Deutsche Telekom reserves the right to waive the transfer restrictions described above at any time or from time to time.

Each stockholder agreed to waive, until the earlier of the completion of the Deutsche Telekom/VoiceStream merger or termination of the Deutsche Telekom/VoiceStream merger agreement, any preemptive rights and, until the earlier of:

- the later of January 1, 2001 and the date of the VoiceStream special meeting; and

- the termination of the Deutsche Telekom/VoiceStream merger agreement, any registration rights they may have, other than Richard Fields and Allen & Company, Incorporated.

Mr. Fields and Allen & Company Incorporated agreed not to exercise their registration rights during a specified period of time. In November 2000 VoiceStream filed a registration statement covering the VoiceStream common shares to be delivered in connection with VoiceStream warrants held by Allen & Company. Each stockholder also agreed to terminate any of its existing registration rights agreements with VoiceStream effective at the completion of the Deutsche Telekom/VoiceStream merger.

In some circumstances, if Deutsche Telekom acquires any other company for consideration in excess of $15 billion and significant stockholders of the acquired company enter into agreements with Deutsche Telekom, or could reasonably be expected to enter into agreements with Deutsche Telekom, that are more favorable to those stockholders in terms of the obligations to vote in favor of the related transaction or to refrain from selling or transferring shares the transfer restrictions in the stockholder agreements will be modified to reflect the more favorable provisions or absence of restrictions, as the case may be.

Registration Rights

If the existing majority shareholders of Deutsche Telekom -- the Federal Republic of Germany and KfW -- elect to conduct a registered secondary offering of their Deutsche Telekom shares during the period from the completion of the Deutsche Telekom/VoiceStream merger through the first anniversary of the completion of the Deutsche Telekom/VoiceStream merger, Deutsche Telekom agrees to use its reasonable best efforts to obtain the agreement of the existing majority shareholders to include in such registered offering the maximum amount of Deutsche Telekom shares acquired in the Deutsche Telekom/VoiceStream merger by the VoiceStream stockholders who have entered into stockholder agreements with Deutsche Telekom. Deutsche Telekom's existing majority shareholders would have the right to determine the number of Deutsche Telekom shares of these VoiceStream stockholders which may be included in such secondary offering without adversely affecting such secondary offering, on such terms and conditions as the existing majority shareholders determine are appropriate.

Termination

Each of the stockholder agreements will terminate upon the earliest to occur of:

- the completion of the Deutsche Telekom/VoiceStream merger;

- the termination of the Deutsche Telekom/VoiceStream merger agreement; and

- July 23, 2002.

No Solicitation

Each of the stockholders agreed not to initiate or participate in, and not to authorize any representatives to initiate or participate in, discussions or negotiations regarding transactions or business combinations between VoiceStream and a company other than Deutsche Telekom, except as otherwise permitted by the Deutsche Telekom/VoiceStream merger agreement. See "-- The Deutsche Telekom/VoiceStream Merger Agreement -- Offers for Alternative Transactions."

The Agreements with Telephone & Data Systems, Inc.

Telephone & Data Systems, Inc. and Deutsche Telekom entered into a stockholder agreement containing the general provisions described above and two letter agreements. The parties agreed that, in the event that the board of directors of Telephone & Data Systems determines that Telephone & Data Systems is subject to the regulations of the Investment Company Act of 1940 and Telephone & Data Systems is unsuccessful in obtaining an exemption from such regulations or is not eligible for an exemption, the restrictions on Telephone & Data Systems' right to transfer VoiceStream common shares will be modified to allow it to sell a minimum number of VoiceStream common shares that would allow Telephone & Data Systems, with a reasonable margin of safety, to avoid being characterized as an "investment company" under the Investment Company Act of 1940.

In addition, Telephone & Data Systems and Deutsche Telekom agreed to procedures concerning Deutsche Telekom's delivery of the consideration to be paid to VoiceStream stockholders in the Deutsche Telekom/VoiceStream merger. Deutsche Telekom agreed to take all action reasonably possible to expedite the steps necessary to issue the Deutsche Telekom ordinary shares in the Deutsche Telekom/VoiceStream merger and list those Deutsche Telekom shares on the Frankfurt Stock Exchange on or promptly after the completion of the Deutsche Telekom/VoiceStream merger. Deutsche Telekom further agreed to use its reasonable best efforts to deliver the cash portion of the merger consideration to the escrow agent prior to or immediately after the completion of the Deutsche Telekom/VoiceStream merger in immediately available funds and to cause the escrow agent to release the aggregate cash consideration payable in the Deutsche Telekom/VoiceStream merger, including the cash payable to Telephone & Data Systems, promptly upon the registration of the increase of Deutsche Telekom share capital. If possible, Deutsche Telekom will cause the cash consideration to be released on the date the Deutsche Telekom/VoiceStream merger is completed or, if this is not possible, as promptly as possible thereafter. Deutsche Telekom also agreed to instruct the escrow agent to release the share certificates for Deutsche Telekom ADSs and Deutsche Telekom ordinary shares to be issued in the Deutsche Telekom/VoiceStream merger no later than one business day after registration of the Deutsche Telekom capital increase. In addition, Deutsche Telekom agreed to use its reasonable best effects to cause the escrow agent to deliver such certificates to Telephone & Data Systems.

THE DEUTSCHE TELEKOM INVESTMENT AGREEMENTS

In connection with the Deutsche Telekom/VoiceStream merger agreement, Deutsche Telekom agreed to purchase 3,906,250 shares of a new class of voting preferred shares of VoiceStream for an aggregate purchase price of $5 billion. This purchase was completed on September 6, 2000. We summarize below the material terms of the new class of voting preferred shares and the agreements entered into in connection with the issuance and sale of those shares. The following summary is qualified in its entirety by reference to the full text of the agreements summarized, copies of which have been filed as exhibits to

Deutsche Telekom's and VoiceStream's respective registration statements and are incorporated herein by reference.

VoiceStream Voting Preferred Shares

On July 23, 2000, the VoiceStream board of directors authorized the creation of a class of shares designated "Convertible Voting Preferred Stock," par value $0.001 per share, consisting of up to 3,906,250 shares, all of which were issued to Deutsche Telekom under the stock subscription agreement, dated July 23, 2000. See "-- Stock Subscription Agreement."

Liquidation Preference. In the event of a liquidation or dissolution of VoiceStream, holders of shares of VoiceStream voting preferred shares will be entitled to a liquidation preference of $1,280 per share, subject to adjustment for stock splits or other comparable transactions with respect to the VoiceStream voting preferred shares, before any distribution may be made to the holders of VoiceStream common shares or junior preferred shares.

Conversion. The VoiceStream voting preferred shares are not convertible unless the Deutsche Telekom/VoiceStream merger agreement is terminated. If the Deutsche Telekom/VoiceStream merger agreement is terminated, each VoiceStream voting preferred share will become convertible into the number of VoiceStream common shares equal to the aggregate liquidation preference of the VoiceStream voting preferred shares to be converted, divided by $160 per share, subject to adjustment for shares splits or other comparable transactions with respect to the VoiceStream voting preferred shares. Assuming no adjustment in the $1,280 liquidation preference or $160 purchase price, each VoiceStream voting preferred share will therefore be convertible into eight VoiceStream common shares or an aggregate of 31,250,000 VoiceStream common shares.

Voting Rights. Holders of the VoiceStream voting preferred shares are entitled to vote together with holders of VoiceStream common shares and not as a separate class. Each VoiceStream voting preferred share is entitled to one vote. The affirmative vote of the holders of a majority of the outstanding VoiceStream voting preferred shares is necessary to adopt any amendment that will change the powers, preferences or rights of the voting preferred shares.

Dividends. The holders of the VoiceStream voting preferred shares are entitled to receive dividends and other distributions made by VoiceStream on its capital stock to the same extent and at the same rate as dividends or distributions made in respect of VoiceStream common shares, on an as-converted-to-common shares basis.

Redemption at Option of VoiceStream. VoiceStream may redeem the VoiceStream voting preferred shares at any time on or after December 31, 2020 at a price of $1,280 per share, subject to adjustment for stock splits or other comparable transactions with respect to the VoiceStream voting preferred shares. However, VoiceStream will not be permitted to redeem the VoiceStream voting preferred shares if VoiceStream is insolvent, will be rendered insolvent by the redemption, or is prohibited by law or agreement from redeeming the VoiceStream voting preferred shares.

Redemption at Option of Holder. Any holder of VoiceStream voting preferred shares may require VoiceStream to redeem all of the VoiceStream voting preferred shares owned by the holder at any time within the six months following December 31, 2030 at a price of $1,280 per share, subject to adjustment for stock splits or other comparable transactions with respect to the VoiceStream voting preferred shares. However, VoiceStream will not be permitted to redeem the VoiceStream voting preferred shares if VoiceStream is insolvent, will be rendered insolvent by the redemption, or is prohibited by law or agreement from redeeming the VoiceStream voting preferred shares.

Transfer Restriction. Unless the Deutsche Telekom/VoiceStream merger agreement is terminated, VoiceStream voting preferred shares are only transferable to a controlled subsidiary of the holder.

Rank. This new class of voting preferred shares will, with respect to rights on liquidation or dissolution, rank senior to VoiceStream's common shares and the 2 1/2% convertible junior preferred shares and junior to any series or class of VoiceStream's preferred shares.

Stock Subscription Agreement

The stock subscription agreement provides that, for so long as Deutsche Telekom owns any of the VoiceStream voting preferred shares, Deutsche Telekom agrees that if it takes any action which would cause VoiceStream to exceed the broadband Commercial Mobile Radio Service spectrum aggregation limits under U.S. federal communications laws, it will take appropriate remedial action, including causing its designee, if it has one, to resign from the VoiceStream board of directors and/or disposing of shares of VoiceStream common shares or voting preferred shares.

Investor Agreement

In connection with Deutsche Telekom's agreement to purchase VoiceStream voting preferred stock, VoiceStream and Deutsche Telekom have entered into an Investor Agreement, dated as of July 23, 2000, which became effective on September 6, 2000, when Deutsche Telekom first purchased such shares.

Standstill. Under the investor agreement, unless a standstill termination event, which is described below, has occurred, until the fifth anniversary of the investor agreement, Deutsche Telekom and its affiliates may not do the following, subject to certain exceptions described below:

- acquire or agree to acquire any VoiceStream voting securities which would increase Deutsche Telekom's voting power above the threshold percentage described below;

- solicit proxies with respect to the VoiceStream voting securities or become a participant in any election contest relating to the election of directors of VoiceStream; or

- act in concert with any person for the purpose of effecting a transaction which would result in a change of control of VoiceStream.

The standstill provisions described above do not apply to the Deutsche Telekom/VoiceStream merger and do not apply in the following specific circumstances:

- if any person acquires or makes a bona fide offer to acquire voting securities of VoiceStream which, when added to the number of voting securities already owned by such person, exceeds or would exceed the threshold percentage; or

- if Deutsche Telekom makes a tender offer for, or acquires, VoiceStream voting securities, with the approval of a majority of the directors of VoiceStream who are not Deutsche Telekom designees.

"Standstill termination event" means the date on which the first of the following occurs:

- Deutsche Telekom and its affiliates beneficially own less than 5% or more than 90% of the outstanding voting securities of VoiceStream; or

- the acquisition, by a party other than Deutsche Telekom or its affiliates, of more than 50% of the VoiceStream voting securities, a sale of substantially all the assets of VoiceStream or the liquidation or dissolution of VoiceStream.

"Threshold percentage" means, subject to adjustment:

- 33% from the date of the investor agreement until the second anniversary of the closing of the subscription agreement;

- 36% from the second anniversary of the closing of the subscription agreement until the third anniversary of the closing of the subscription agreement; and

- 40% from the third anniversary of the closing of the subscription agreement until the fifth anniversary of the closing of the subscription agreement.

Transfer Restrictions. Unless the Deutsche Telekom/VoiceStream merger agreement is terminated before the Deutsche Telekom/VoiceStream merger is completed, Deutsche Telekom and its affiliates may not transfer any VoiceStream voting preferred shares. Deutsche Telekom may sell or transfer any VoiceStream common shares it owns, including shares acquired on conversion of voting preferred shares, as follows:

- Deutsche Telekom may transfer its VoiceStream common shares, but not its rights and obligations under the investor agreement, to any buyer or transferee; or

- Deutsche Telekom may transfer its VoiceStream common shares together with its rights and obligations under the investor agreement to any transferee that is more than 40% owned by Deutsche Telekom, of which Deutsche Telekom and its affiliates are the largest shareholder and which agrees to be bound by the investor agreement, or to any other transferee if a majority of the directors of VoiceStream who are not Deutsche Telekom designees approve the transfer.

Partial Pre-emptive Rights. If VoiceStream proposes to issue any voting equity securities, Deutsche Telekom will have the right to purchase a portion of those securities up to the percentage, calculated on a fully diluted basis, of VoiceStream common shares owned by Deutsche Telekom at the time of the proposed offering, on the terms and conditions VoiceStream proposes to offer those securities to other persons. Deutsche Telekom's preemptive rights do not apply to an issuance of equity securities by VoiceStream in connection with a stock dividend, merger, employee stock option or public offering.

Registration Rights. VoiceStream has granted registration rights to Deutsche Telekom with respect to any VoiceStream common shares Deutsche Telekom acquires on conversion of the VoiceStream voting preferred shares or otherwise. If the Deutsche Telekom/VoiceStream merger agreement is terminated, then beginning 45 days after termination Deutsche Telekom will have the right to demand registration of its shares on up to eight occasions as long as each occasion relates to registration of shares having a minimum aggregate sales price of $25 million. Deutsche Telekom may make no more than two demands in any 12-month period. Deutsche Telekom also has the right to an unlimited number of piggyback registrations, subject to customary cutback provisions.

FIRST AMENDED AND RESTATED VOTING AGREEMENT

The principal stockholders of VoiceStream are parties to an existing agreement which governs their voting of VoiceStream securities. In connection with Deutsche Telekom's agreement to purchase VoiceStream voting preferred shares, the parties to the existing voting agreement and Deutsche Telekom entered into the First Amended and Restated Voting Agreement, dated as of July 23, 2000. The amended voting agreement will become effective if Deutsche Telekom converts all of its VoiceStream voting preferred shares into VoiceStream common shares, which can only happen if the Deutsche Telekom/VoiceStream merger agreement is terminated. We summarize the material terms of the amended voting agreement below, and this summary is qualified in its entirety by reference to the text of the agreement, a copy of which has been filed as an exhibit to Deutsche Telekom's and VoiceStream's respective registration statements and is incorporated herein by reference.

The amended voting agreement will provide that the parties will agree to vote their VoiceStream common shares for the election of a VoiceStream board of directors consisting of 19 members, subject to adjustments, designated as follows:

(1) Mr. Stanton, as long as he is the chief executive officer of VoiceStream;

(2) One member designated by Mr. Stanton, so long as he, or entities affiliated with him, beneficially owns at least 4,500,000 VoiceStream common shares;

(3) Four members designated by Hutchison PCS (USA) and its affiliated entities, which may be increased or decreased depending upon increases or reductions in Hutchison PCS (USA)'s percentage ownership of outstanding VoiceStream common shares, including VoiceStream common shares issuable to Hutchison PCS (USA) upon conversion of VoiceStream's 2.5% convertible junior preferred shares;

(4) One member designated by The Goldman Sachs Group, Inc. and its affiliated entities, so long as the Goldman Sachs entities beneficially own at least 4,500,000 VoiceStream common shares;

(5) Four members who were members of the Omnipoint board of directors prior to VoiceStream's acquisition of Omnipoint and who were selected by Omnipoint to serve during the period from the completion of the Omnipoint acquisition until the second annual meeting of stockholders of VoiceStream following the completion of VoiceStream's acquisition of Omnipoint. Omnipoint has designated the following persons to serve as directors: Douglas G. Smith, Richard L. Fields, James N. Perry, Jr. and James J. Ross;

(6) One member designated by Sonera Corporation and its affiliated entities, subject to the approval of VoiceStream, which approval may not be unreasonably withheld, so long as Sonera Corporation entities beneficially own at least 4,500,000 VoiceStream common shares. If Sonera Corporation beneficially owns more than 9,800,000 VoiceStream common shares and Telephone & Data Systems beneficially owns less than 4,500,000 VoiceStream common shares, Sonera Corporation will be entitled to designate two directors;

(7) One member designated by Telephone & Data Systems and its affiliated entities who is not affiliated with Telephone & Data Systems, subject to the approval of VoiceStream, which approval may not be unreasonably withheld, so long as the Telephone & Data Systems entities beneficially own at least 4,500,000 VoiceStream common shares. If Telephone & Data Systems beneficially owns more than 9,800,000 VoiceStream common shares and Sonera Corporation beneficially owns less than 4,500,000 VoiceStream common shares, Telephone & Data Systems will be entitled to designate two directors;

(8) Two members designated by Deutsche Telekom and its affiliated entities, subject to the approval of VoiceStream, which approval may not be unreasonably withheld, so long as the Deutsche Telekom entities beneficially own at least 9,800,000 VoiceStream common shares. If Deutsche Telekom beneficially owns at least 4,500,000 VoiceStream common shares but less than 9,800,000 VoiceStream common shares, Deutsche Telekom will be entitled to designate only one director;

(9) The then President of VoiceStream;

(10) The then Vice Chairman of VoiceStream; and

(11) The remaining members, if any, of the board to be selected by a majority of the persons designated as described in (1), (2), (4), (9) and (10) above.

In connection with the VoiceStream/Powertel merger, the largest of VoiceStream's principal stockholders, including Deutsche Telekom, entered in agreements, described in more detail under "Summary of Deutsche Telekom/Powertel and VoiceStream/Powertel Transaction Documents -- VoiceStream's Agreements with Stockholders of Powertel," providing that the stockholders who are parties to those agreements will vote the VoiceStream common shares, or in the case of Deutsche Telekom, voting preferred shares, they own in favor of the election to the VoiceStream board of directors of one nominee chosen by Powertel and acceptable to VoiceStream. These agreements will not be effective until the Deutsche Telekom/VoiceStream merger is terminated and the VoiceStream/Powertel merger is completed.

AGREEMENTS WITH JOINT VENTURE PARTNERS OF VOICESTREAM

In connection with the execution of the Deutsche Telekom/VoiceStream merger agreement, Deutsche Telekom and VoiceStream entered into agreements with some of VoiceStream's joint venture partners. We summarize the material terms of these agreements below, and this summary is qualified in its entirety by reference to the text of the agreements summarized, copies of which have been filed as exhibits to Deutsche Telekom's and VoiceStream's respective registration statements and are incorporated herein by reference.

Under agreements with two wholly-owned subsidiaries of Cook Inlet Region, Inc., with affiliates of Providence Equity Partners Inc. and with SSPCS Corporation, Deutsche Telekom agreed to assume on the date the Deutsche Telekom/VoiceStream merger is completed various VoiceStream obligations relating to Cook Inlet's, Providence's and SSPCS' existing rights to exchange certain partnership and limited liability company interests for VoiceStream common shares. In addition, Cook Inlet agreed that to the extent that Cook Inlet receives VoiceStream common shares before the VoiceStream special meeting as a result of the exercise of any exchange rights, it will agree, in a separate voting agreement, to vote any VoiceStream common shares it acquires as a result of this exchange in favor of the Deutsche Telekom/VoiceStream merger and not to transfer more than 49.9% of its VoiceStream common shares until the earliest to occur of the VoiceStream special meeting, January 1, 2001 and the termination of the Deutsche Telekom/VoiceStream merger agreement. Providence agreed that to the extent that Providence receives VoiceStream common shares before the VoiceStream special meeting as a result of the exercise of its exchange right covering 321,334 VoiceStream common shares, it will agree, in a separate voting agreement, to vote these VoiceStream common shares in favor of the Deutsche Telekom/VoiceStream merger and not to transfer more than 49.9% of such VoiceStream common shares until the earliest of the VoiceStream special meeting, January 1, 2001 and the termination of the Deutsche Telekom/VoiceStream merger agreement. Each of these separate voting agreements will terminate, except with respect to the voting agreement, upon the earliest to occur of:

- the completion of the Deutsche Telekom/VoiceStream merger;

- January 1, 2001; and

- the termination of the Deutsche Telekom/VoiceStream merger agreement.

In connection with the Deutsche Telekom/VoiceStream merger agreement, Providence also entered into an agreement with VoiceStream and Western Wireless amending an existing agreement under which Providence had a right to exchange certain partnership interests for Western Wireless common shares. In the new agreement, VoiceStream and Western Wireless agreed to purchase for $20 million Providence's right to exchange for Western Wireless common shares and granted Providence the right to exchange its partnership interests for 321,334 VoiceStream common shares. Providence also entered into an exchange rights agreement with VoiceStream that amended a prior agreement pursuant to which Providence had the right to exchange its membership interest in a certain limited liability company into a variable number of VoiceStream common shares, based on the fair market value of Providence's membership interest at the time of the exchange. The new exchange rights agreement fixes the number of VoiceStream common shares Providence would receive for its limited liability company interest at 4,000,000 VoiceStream common shares.

In September 2000, an affiliate of Cook Inlet delivered to VoiceStream notice of its intent to exchange with VoiceStream its membership interests in certain joint ventures with VoiceStream for VoiceStream common shares. On the same day, another affiliate of Cook Inlet delivered to VoiceStream notice of its intent to exchange with VoiceStream a certain interest in a partnership for cash. In November 2000, SSPCS Corporation delivered to VoiceStream notice of its intent to exchange with VoiceStream certain interests in partnerships for VoiceStream common shares. VoiceStream and the two Cook Inlet affiliates are currently seeking FCC approval of these exchanges. It is possible that VoiceStream will obtain the required FCC approval and complete these exchanges as early as December 2000. In November 2000, VoiceStream filed a registration statement covering the VoiceStream common shares to be delivered in connection with these exchanges. This registration statement has not yet been declared effective by the SEC.

SUMMARY OF DEUTSCHE TELEKOM/POWERTEL AND VOICESTREAM/POWERTEL TRANSACTION
DOCUMENTS

THE DEUTSCHE TELEKOM/POWERTEL MERGER AGREEMENT

The following is a summary of the principal provisions of the Deutsche Telekom/Powertel merger agreement. This summary is qualified in its entirety by reference to the Deutsche Telekom/Powertel merger agreement, a copy of which is attached as Annex B to this proxy statement/prospectus and incorporated herein by reference. Powertel stockholders are urged to read the Deutsche Telekom/Powertel merger agreement in its entirety, as it is the legal document governing the Deutsche Telekom/Powertel merger.

The Deutsche Telekom/Powertel Merger

A Delaware corporation formed by Deutsche Telekom will merge with and into Powertel, and, as a result, Powertel will become a wholly-owned subsidiary of Deutsche Telekom.

Effective Time and Timing of Closing

The Deutsche Telekom/Powertel merger will be completed and become effective when Powertel files a certificate of merger with the Secretary of State of the State of Delaware or at such later time as is specified in the certificate of merger in accordance with Delaware law. We expect the Deutsche Telekom/Powertel merger to become effective on the same day as the closing of the Deutsche Telekom/ Powertel merger. The closing of the Deutsche Telekom/Powertel merger will take place on the fifth business day after the conditions to the Deutsche Telekom/Powertel merger have been satisfied or waived, or on such other date as Deutsche Telekom and Powertel may agree. In addition, on the closing date of the Deutsche Telekom/Powertel merger or as soon as possible after the closing date, Deutsche Telekom and Powertel will undertake a number of additional actions, including making filings with regulatory and stock exchange authorities, necessary to permit the issuance of the merger consideration under German laws and regulations and the rules of the Frankfurt Stock Exchange.

Consideration to Be Received in the Deutsche Telekom/Powertel Merger

In the Deutsche Telekom/Powertel merger, holders of Powertel common shares will receive 2.6353 Deutsche Telekom shares for each of their Powertel common shares. We refer to the number of Deutsche Telekom shares to be received for each Powertel common share as the "common share exchange ratio". Holders of Powertel's Series A preferred shares and Series B preferred shares will receive
121.9294 Deutsche Telekom shares for each of their Powertel Series A preferred shares and Series B preferred shares. Holders of Powertel's Series D preferred shares will receive 93.0106 Deutsche Telekom shares for each of their Powertel Series D preferred shares. Holders of Powertel's Series E preferred shares and Series F preferred shares will receive 179.5979 Deutsche Telekom shares for each of their Powertel Series E preferred shares and Series F preferred shares, plus a number of Deutsche Telekom shares equal to the product of:

- the number of Powertel common shares representing accrued or declared but unpaid dividends on each Powertel Series E or Series F preferred share, calculated as if the date of the completion of the Deutsche Telekom/Powertel merger were a dividend payment date multiplied by

- the common share exchange ratio.

All of the exchange ratios described above are subject to adjustment as described below. We refer to the number of Deutsche Telekom shares a Powertel stockholder, optionholder or warrantholder will receive in the Deutsche Telekom/Powertel merger in exchange for its Powertel common shares, preferred shares, warrants or options, as the case may be, as an "exchange ratio". The exchange ratios applicable to the outstanding Powertel preferred shares, options and warrants are based on the number of Deutsche Telekom shares a holder of those Powertel preferred shares, options or warrants would have received in the Deutsche Telekom/Powertel merger had such holder converted its Powertel preferred shares into Powertel

common shares or exercised its Powertel options or warrants for Powertel common shares on the date of the Deutsche Telekom/Powertel merger agreement. As discussed more fully below, the exchange ratio with respect to a particular class of Powertel shares, options or warrants is a fixed number of Deutsche Telekom shares, but is subject to adjustment.

You will receive Deutsche Telekom shares in the form of Deutsche Telekom ADSs, which trade principally on the NYSE under the symbol "DT", or, if you prefer, in the form of Deutsche Telekom ordinary shares, which are traded on the Frankfurt Stock Exchange under the symbol "DTE".

Adjustment to Exchange Ratios. Each exchange ratio was determined assuming that at the time the Deutsche Telekom/Powertel merger is completed, the aggregate number of Powertel common shares outstanding on a fully diluted basis and adjusted for specific commitments to issue Powertel common shares, excluding Powertel common shares issuable as dividends after August 26, 2000 on Series E preferred shares and Series F preferred shares, will not exceed the "maximum share amount." In this document we refer to this aggregate number of Powertel common shares as the "adjusted fully diluted shares amount." The maximum share amount is 55,742,000 and may be reduced as set forth in the Deutsche Telekom/Powertel merger agreement. Each exchange ratio is subject to adjustment in the event that the adjusted fully diluted shares amount as of the date the Deutsche Telekom/Powertel merger is completed exceeds the maximum share amount. In the event of an adjustment, the effect will be to cap the number of Deutsche Telekom shares that will be issued in the Deutsche Telekom/Powertel merger and to reduce the number of Deutsche Telekom shares to be received by Powertel stockholders, optionholders and warrantholders in the Deutsche Telekom/Powertel merger in exchange for each of their Powertel common shares or Powertel preferred shares, as the case may be. We illustrate below how the adjustment mechanism will be used.

- Step 1. Derive the adjusted fully diluted shares amount: The adjusted fully diluted shares amount is the sum of the number of outstanding Powertel common shares, less the number of shares issuable as dividends after August 26, 2000 on the Series E preferred shares and Series F preferred shares, plus

-- the number of Powertel common shares issuable upon conversion of the Powertel preferred shares;

-- the number of Powertel common shares issuable pursuant to the exercise of Powertel stock options and Powertel warrants;

-- the number of Powertel common shares issuable pursuant to Powertel restricted stock awards;

-- the number of Powertel common shares issuable pursuant to the exercise of the put rights held by Sonera Holding B.V. and Eliska Wireless Investors, unless such rights have been terminated;

-- the number of Powertel common shares issuable pursuant to the stock purchase agreement between Powertel and Sonera Holding B.V., unless this stock purchase agreement has been terminated;

-- the number of Powertel common shares issuable pursuant to the exercise of any stock appreciation rights, phantom stock rights or other contractual rights the value of which is determined in whole or in part by the value of any Powertel shares; and

-- the number of any other Powertel common shares outstanding and Powertel common shares issuable pursuant to any other securities outstanding, which are convertible into, or exercisable or exchangeable for, Powertel common shares.

- Step 2. Derive the adjustment factor: The adjustment factor is a fraction
(a) the numerator of which is 55,742,000, as it may be adjusted in accordance with the Deutsche Telekom/Powertel merger agreement, and (b) the denominator of which is the adjusted fully diluted shares amount.

- Step 3. Derive the adjusted exchange ratios: Each exchange ratio will be reduced by multiplying such exchange ratio by the adjustment factor.

- Step 4. Derive the adjusted stock consideration: Each outstanding Powertel common share, each Powertel common share issuable upon the exercise of outstanding Powertel warrants and Powertel stock options and each Powertel preferred share will then be converted in the Deutsche Telekom/Powertel merger into the right to receive a number of Deutsche Telekom shares equal to the adjusted exchange ratio calculated pursuant to Step 3.

Example. If the adjusted fully diluted shares amount exceeds 55,742,000, as it may be adjusted in accordance with the Deutsche Telekom/Powertel merger agreement, we would calculate the number of Deutsche Telekom shares into which each Powertel share will be converted as illustrated above. Assuming that the adjusted fully diluted shares amount is 55,795,000, then the adjustment factor would be 0.9991. If you own 100 Powertel common shares under these circumstances, you would receive the amount of Deutsche Telekom shares equal to 2.6353 multiplied by 0.9991, multiplied by the number of shares you hold, or 100, for a total of 263 shares, plus cash for 0.29 of a Deutsche Telekom share.

Powertel stockholders will not receive fractional Deutsche Telekom shares and instead will receive a cash payment representing the net proceeds from the sale of the fractional Deutsche Telekom shares. The treatment of fractional Deutsche Telekom shares is described under "-- Election and Exchange of Certificates Representing Powertel Shares."

Other Potential Adjustments. The amount and form of the merger consideration will be adjusted in the event that before the completion of the Deutsche Telekom/Powertel merger:

- a reclassification, split-up, stock-split, reverse stock-split, stock dividend, stock combination, recapitalization, redenomination of share capital, merger or similar transaction or an exchange offer causes a change to the Deutsche Telekom ordinary shares outstanding, or the number of Deutsche Telekom ordinary shares represented by a Deutsche Telekom ADS is changed; or

- all of the outstanding Deutsche Telekom ordinary shares, or more than 80% of the outstanding Deutsche Telekom ordinary shares pursuant to an exchange offer for all outstanding Deutsche Telekom shares, are changed into or exchanged for a different number or kind of shares of Deutsche Telekom, or into shares of another entity owning more than 80% of the Deutsche Telekom ordinary shares.

For example, if prior to completion of the Deutsche Telekom/Powertel merger, Deutsche Telekom, in order to facilitate future acquisitions, were to establish a new German holding company that acquired through an exchange offer more than 80% of the outstanding Deutsche Telekom shares, holders of Powertel common shares would receive shares of the new holding company instead of Deutsche Telekom shares in the Deutsche Telekom/Powertel merger.

Treatment of Powertel Warrants

If any of the warrants granted pursuant to the warrant agreement dated February 7, 1996 between Powertel and Bankers Trust Company, as warrant agent, have not been exercised before the Deutsche Telekom/Powertel merger becomes effective and a holder of warrants becomes entitled to Deutsche Telekom ordinary shares at any time after the Deutsche Telekom/Powertel merger, any Deutsche Telekom ordinary shares to which such holder becomes entitled will be issued from a special trust established for the benefit of such warrant holders. Any cash to which such holder becomes entitled will be paid by Deutsche Telekom.

Treatment of Eliska Put Rights

If Sonera Holding B.V. or Eliska Wireless Investors, who we collectively refer to as the "Eliska Partners," receive Powertel common shares before the Deutsche Telekom/Powertel merger is completed as a result of exercising their rights to exchange interests in an affiliate of Eliska Wireless for Powertel

common shares, such Eliska Partners will have all the rights with respect to those Powertel common shares which a Powertel stockholder has.

To the extent that any of the Eliska Partners has not received Powertel common shares before the Deutsche Telekom/Powertel merger is completed in respect of their exchange rights, those Eliska Partners will be entitled to receive the consideration that they are entitled to receive pursuant to their exchange rights.

To the extent that any of the Eliska Partners are entitled to receive Deutsche Telekom shares on or after the date the Deutsche Telekom/Powertel merger is completed, the Deutsche Telekom shares will be delivered from a special trust established for the benefit of such Eliska Partners, and any cash to which such Eliska Partners become entitled will be paid by Deutsche Telekom.

Election and Exchange of Certificates Representing Powertel Shares

Deutsche Telekom will appoint an escrow agent to serve in connection with the Deutsche Telekom/Powertel merger. Shortly after the Deutsche Telekom/Powertel merger is completed, Deutsche Telekom and Powertel intend to mail, or cause the escrow agent to mail, to each registered holder of Powertel common shares and Powertel preferred shares a letter of transmittal which the holder must properly complete and deliver to the escrow agent with the holder's stock certificates.

The escrow agent will exchange certificates representing Powertel shares for American depositary receipts representing Deutsche Telekom ADSs or, if a Powertel stockholder properly elects, certificates representing Deutsche Telekom ordinary shares. The letter of transmittal mailed to Powertel stockholders will contain an "ordinary share election" form which can be used by a stockholder to elect to receive merger consideration in Deutsche Telekom ordinary shares.

After a record holder of Powertel shares delivers certificates for those shares and a properly completed letter of transmittal to the escrow agent, the escrow agent will deliver to the holder:

- the number of whole Deutsche Telekom ADSs or Deutsche Telekom ordinary shares included in the merger consideration in respect of such Powertel shares; and

- after giving effect to any required tax withholdings, a check in the amount of:

-- cash in lieu of any fractional interest in Deutsche Telekom ADSs or Deutsche Telekom ordinary shares on the terms described below, plus

-- any cash dividends or other distributions that the holder has the right to receive, including dividends or other distributions payable with respect to the holders of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares with a record date after the completion of the Deutsche Telekom/Powertel merger and a payment date on or before the date the holder properly delivers Powertel stock certificates to the escrow agent.

The escrow agent will not deliver fractional Deutsche Telekom ADSs or fractional Deutsche Telekom ordinary shares in connection with the Deutsche Telekom/Powertel merger. Instead, each holder of Powertel shares exchanged in the Deutsche Telekom/Powertel merger who would otherwise have received a fraction of a Deutsche Telekom ADS or Deutsche Telekom ordinary share will be entitled to receive a cash payment representing that holder's proportionate interest in the net proceeds from the sale by the escrow agent of the aggregate of the fractions of Deutsche Telekom ADSs and Deutsche Telekom ordinary shares that would otherwise be issued. The escrow agent will execute the sale of those Deutsche Telekom ADSs and Deutsche Telekom ordinary shares on the NYSE and the Frankfurt Stock Exchange, respectively. Deutsche Telekom will pay all commissions, transfer taxes and out-of-pocket costs, including the expenses and compensation of the escrow agent, incurred in connection with the sale of the Deutsche Telekom ADSs and Deutsche Telekom ordinary shares.

Powertel shares that are surrendered to the escrow agent will be canceled. No interest will be paid or accrued on any amount payable to holders of Powertel shares. In addition, no holder of Powertel shares

will receive any dividends or other distributions with respect to Deutsche Telekom ADSs or Deutsche Telekom ordinary shares to which the holder is entitled under the Deutsche Telekom/Powertel merger agreement until that holder's Powertel stock certificate is surrendered to the escrow agent with a properly completed letter of transmittal.

If any Deutsche Telekom ADSs or Deutsche Telekom ordinary shares are to be delivered to a person other than the registered holder of the Powertel shares represented by the certificates surrendered to the escrow agent:

- those Powertel stock certificates must be properly endorsed or otherwise be in proper form for transfer; and

- the person requesting the delivery must pay to the escrow agent any transfer or other taxes required as a result of delivery to a person other than the registered holder, or establish to the satisfaction of the escrow agent that such tax has been paid or is not payable.

Treatment of Powertel Options and Restricted Stock

Powertel Options. If the Deutsche Telekom/Powertel merger is completed, each outstanding Powertel stock option will be converted into an option to acquire, from a trust established for the benefit of holders of Powertel stock options, that number of Deutsche Telekom shares determined by multiplying the maximum number of Powertel common shares subject to the Powertel stock option by the Powertel common share exchange ratio, rounded if necessary to the nearest whole Deutsche Telekom ordinary share. The Powertel common share exchange ratio is subject to adjustment as described under "-- Consideration to Be Received in the Deutsche Telekom/Powertel Merger." The exercise price per Deutsche Telekom ordinary share for each of these options will be the exercise price per Powertel common share applicable to that option immediately prior to the completion of the Deutsche Telekom/ Powertel merger divided by the common share exchange ratio. The replacement options will generally have the same terms and conditions as were applicable under the Powertel option plans.

Powertel Restricted Stock. At the time the Deutsche Telekom/Powertel merger is completed, the Powertel restricted stock plan will terminate and any unvested Powertel restricted stock awards will become fully vested, except as otherwise provided in the individual restricted stock award agreements.

Dissenting Shares

If appraisal rights for any Powertel preferred shares are perfected by any holder of preferred shares, then those shares will be treated as described under "The Deutsche Telekom/Powertel Merger and the VoiceStream/Powertel Merger -- Appraisal Rights."

Representations and Warranties

The Deutsche Telekom/Powertel merger agreement contains a number of representations and warranties made by Powertel and Deutsche Telekom to each other, including those regarding:

- due organization, good standing and qualification;

- capital structure;

- corporate authority to enter into the Deutsche Telekom/Powertel merger agreement and lack of conflicts with corporate governance documents, contracts or laws;

- governmental filings;

- accuracy of SEC reports, financial statements and information provided for inclusion in this document and certain other filings by the parties;

- absence of certain material changes or events since December 31, 1999;

- permits and licenses;

- compliance with laws;

- tax matters, including the absence of facts inconsistent with the qualification of the Deutsche Telekom/Powertel merger as a reorganization under Section 368(a) of the U.S. tax code;

- absence of undisclosed liabilities and pending litigation;

- finders' or brokers' fees; and

- the vote necessary to approve the Deutsche Telekom/Powertel merger agreement.

In addition, Powertel made representations and warranties to Deutsche Telekom as to:

- employee benefit plans;

- employees and employment practices;

- Section 203 of the Delaware General Corporation Law and other anti-takeover laws enacted under Georgia or Delaware law applicable to Powertel;

- intellectual property;

- the receipt of a fairness opinion from a financial advisor;

- material contracts; and

- absence of affiliate transactions.

In addition, the Deutsche Telekom/Powertel merger agreement contains representations and warranties made by the merger subsidiary to Powertel regarding some of the above matters.

Conduct of Business Pending the Deutsche Telekom/Powertel Merger

Covenants of Powertel. Except as contemplated by the Deutsche Telekom/Powertel merger agreement or the VoiceStream/Powertel merger agreement, Powertel has agreed that, until the earlier of the completion of the Deutsche Telekom/Powertel merger or the termination of the Deutsche Telekom/Powertel merger agreement, it will carry on its and its subsidiaries' business in the ordinary course in all material respects. Until the Deutsche Telekom/Powertel merger is completed or the Deutsche Telekom/Powertel merger agreement is terminated, Powertel and its subsidiaries will not take the actions listed in the Deutsche Telekom/Powertel merger agreement, which includes the following actions, without Deutsche Telekom's prior written consent, except under limited exceptions specified in the Deutsche Telekom/Powertel merger agreement:

- declare, set aside or pay dividends on, or make distributions in respect of, Powertel shares or split, combine or reclassify any outstanding Powertel shares;

- redeem or repurchase any Powertel shares, except as required by Powertel's certificate of incorporation or the Powertel stock option plans;

- issue, deliver, pledge, sell or encumber any Powertel shares or any options or other rights to acquire those shares;

- Important Exception:

-- Powertel may issue Powertel common shares upon the closing of the acquisition of substantially all of the assets of DiGiPH PCS, Inc. and its affiliates by Eliska Wireless Ventures, which in this document we refer to as the "DiGiPH transaction," and the performance of the agreements entered into in connection with the DiGiPH transaction, including the stock purchase agreement between Powertel and Sonera Holding B.V., the put agreement dated May 30, 2000 between Powertel, Eliska Wireless Investors and Sonera Holding B.V. and the put agreement dated May 30, 2000 between Powertel and Sonera

Holding B.V.; or otherwise pursuant to previously disclosed contractual obligations existing prior to the execution of the Deutsche Telekom/Powertel merger agreement; and

-- Powertel may issue rights to acquire Powertel shares and may issue shares pursuant to such rights for an aggregate of 575,000 Powertel common shares pursuant to annual incentive grants, grants to newly hired employees and grants to be made pursuant to the DiGiPH transaction;

- adopt, amend or propose to amend any stockholder rights plan or related rights plan;

- acquire any business, corporation or partnership, or substantially all of the assets of any of the foregoing;

- Important Exceptions:

-- Powertel is permitted to enter into acquisition transactions which involve individually, or in the aggregate, a purchase price of $500,000 or less without Deutsche Telekom's consent;

-- Powertel is permitted to make capital expenditures in accordance with its capital budget for the fiscal years 2000 and 2001; and

-- Powertel may enter into transactions in connection with the DiGiPH transaction;

- authorize or make capital expenditures other than those for less than the aggregate annual amount contained in Powertel's capital budget for the years 2000 and 2001:

- sell, lease, encumber or otherwise dispose of any of its assets;

- enter into employment or severance agreements with, or establish any new benefit plan, other than in the ordinary course of business consistent with its past practice or amend any existing Powertel benefit plan or take any action inconsistent with the cash bonus, retention bonus, incentive bonus, severance, equity awards and other plans set out in the Deutsche Telekom/Powertel merger agreement, which are described in more detail below;

- increase the compensation or reimbursement allowances payable to an officer or director;

- make any awards under an existing Powertel benefit plan for the benefit of any director, officer or employee, except in the ordinary course of business consistent with past practices;

- except as required by a change in law or U.S. GAAP, make any change in its method of accounting or its fiscal year;

- enter into, modify or amend in any material respect or terminate any material contract or agreement to which Powertel is a party, or waive, release or assign any material rights or claims;

- amend any term of any of its outstanding securities in any material respect;

- adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization;

- incur or guarantee material indebtedness, including refinancing existing indebtedness;

- create, incur, assume or allow to exist material liens upon any property or assets, except for liens arising in the ordinary course of business or to secure indebtedness or arising by operation of law;

- guaranty any indebtedness, leases, dividends or other third party obligations;

- make any loan or capital contributions to or investment in any person, other than loans, capital contributions or investments made in the ordinary course of business, as required in connection with the DiGiPH transaction, or made to wholly-owned subsidiaries;

- enter into any agreement that materially restricts Powertel, or after completion of the Deutsche Telekom/Powertel merger could materially restrict Deutsche Telekom or the surviving corporation

from engaging in the business of providing wireless telecommunications services or developing wireless telecommunications technology anywhere in the world, or otherwise from engaging in any other business;

- settle, or propose to settle, any material litigation, investigation, arbitration, proceeding or other claim;

- make any material tax election or enter into any settlement or compromise of any material tax liability;

- take action that could reasonably be expected to make any representation or warranty of Powertel under the Deutsche Telekom/Powertel merger agreement inaccurate and have a material adverse effect on Powertel at the completion of the Deutsche Telekom/Powertel merger;

- adopt, amend or propose to amend any Powertel benefit plans or make any discretionary contributions to any Powertel benefit plan which is also an "employee pension benefit plan" or "employee welfare benefit plan" as defined in the Employee Retirement Income Security Act of 1974, as amended, other than as required by law or as may be required to maintain compliance with the U.S. tax code and except for other limited exceptions;

- file any amended tax returns if the result would be a material increase in Powertel's tax liability;

- take action that would reasonably be expected to materially impair or delay obtaining the necessary regulatory approvals to complete the Deutsche Telekom/Powertel merger;

- take any action that would be reasonably likely to prevent or impede the Deutsche Telekom/Powertel merger from qualifying as a reorganization under Section 368(a) of the U.S. tax code or cause the stockholders of Powertel to recognize gain in the Deutsche Telekom/Powertel merger under
Section 367(a)(1) of the U.S. tax code;

- take any action that would cause the Powertel common shares to cease to be quoted on the Nasdaq Stock Market;

- during the five business days prior to the completion of the Deutsche Telekom/Powertel merger, take or omit to take any action that could increase the number of Powertel shares outstanding on a fully diluted basis; and

- enter into any contract, agreement or arrangement to do any of the foregoing.

Covenants of Deutsche Telekom. Except as contemplated by the Deutsche Telekom/Powertel merger agreement, Deutsche Telekom has agreed that until the Deutsche Telekom/Powertel merger is completed, Deutsche Telekom and its subsidiaries will not take the actions listed in the Deutsche Telekom/Powertel merger agreement, which includes the following actions, without Powertel's prior written consent:

- except for the purpose of using or increasing Deutsche Telekom's authorized capital or as necessary for the conduct of its business, amend or propose to amend the Memorandum and Articles of Association or Management Board Rules of Procedure or other comparable organizational document of Deutsche Telekom in any manner that would be adverse to Powertel or its stockholders;

- take action that would be reasonably likely to prevent or impede the Deutsche Telekom/Powertel merger from qualifying as a reorganization under Section 368(a) of the U.S. tax code or cause Powertel stockholders to recognize gain in the Deutsche Telekom/Powertel merger under Section 367(a)(1) of the U.S. tax code; or

- take action that would reasonably be likely to materially adversely affect or materially adversely delay the ability of the parties to obtain any required regulatory approval or to complete the transactions contemplated by the Deutsche Telekom/Powertel merger agreement.

- Important Exception: Deutsche Telekom may make acquisitions as long as the acquisitions, individually or in the aggregate, are not reasonably likely to prevent the consummation of the Deutsche Telekom/Powertel merger.

Offers for Alternative Transactions

Powertel has agreed not to, has agreed not to permit any of its subsidiaries to, has agreed not to authorize or permit any of its or their respective officers, directors or employees to, and has agreed to use its reasonable efforts to cause its advisors and representatives not to:

- solicit, initiate or knowingly encourage, or knowingly take any other action designed to facilitate, any alternative transaction, which we define below, to the Deutsche Telekom/Powertel merger; or

- continue or participate in any discussions or negotiations regarding any alternative transaction to the Deutsche Telekom/Powertel merger.

However, if at any time before Powertel stockholders approve the Deutsche Telekom/Powertel merger, Powertel receives an unsolicited proposal for an alternative transaction, then Powertel may, after giving Deutsche Telekom three business days advance notice:

- furnish information with respect to Powertel pursuant to a confidentiality agreement substantially similar to the confidentiality agreement in place between Powertel and Deutsche Telekom; and

- engage in discussions and negotiations with the persons that made such proposal;

but only if:

- the Powertel board of directors has determined in good faith, after receiving advice from outside counsel, that providing information to the third party or participating in negotiations or discussions could be reasonably expected to result in a superior proposal, which we define below, being made; and

- Powertel is not otherwise in breach of its obligations described above not to solicit or engage in discussions regarding an alternative transaction.

Important Definitions:

"alternative transaction" means any of the following:

- a transaction or series of transactions in which any third party would acquire, directly or indirectly, beneficial ownership of more than 20% of the outstanding Powertel shares or pursuant to a tender offer or exchange offer;

- any acquisition of or business combination with Powertel or any of its significant subsidiaries, by a merger or other business combination; or

- any transaction in which any third party would acquire, directly or indirectly, control of assets of Powertel or any of its subsidiaries for consideration equal to 20% or more of the fair market value of all of the outstanding Powertel shares.

An alternative transaction does not include the acquisition of Powertel by VoiceStream pursuant to the VoiceStream/Powertel merger agreement.

"superior proposal" means any proposal made by a third party to enter into an alternative transaction which the Powertel board of directors determines in its good faith judgment, based on, among other things, the advice of a financial advisor of nationally recognized reputation, to be more favorable to Powertel's stockholders than the Deutsche Telekom/Powertel merger taking into account all relevant factors, including whether, in the good faith judgment of the Powertel board of directors, the third party is reasonably able to finance the proposed transaction.

Powertel also has agreed to notify Deutsche Telekom promptly of any request for information or of any proposal in connection with an alternative transaction, including the material terms of the request or

proposal and the identity of the person making it, and Powertel has agreed to keep Deutsche Telekom informed of the status of any alternative transaction. In addition, Powertel agreed to cease any activities, discussions or negotiations with respect to an alternative transaction that existed at the time the Deutsche Telekom/Powertel merger agreement was signed.

Powertel Board of Directors' Recommendation

The Deutsche Telekom/Powertel merger agreement requires the Powertel board of directors:

- to recommend that the Powertel stockholders approve the Deutsche Telekom/Powertel merger agreement;

- not to withdraw, modify or qualify, or to propose publicly to withdraw, modify or qualify, its recommendation in a manner adverse to Deutsche Telekom;

- not to approve or recommend, or to propose publicly to approve or recommend, any alternative transaction; and

- not to cause Powertel to agree to engage in any alternative transactions.

However, if the Powertel board of directors receives a superior proposal before Powertel stockholders approve the Deutsche Telekom/Powertel merger, the Powertel board of directors may inform Powertel stockholders that it no longer recommends approval of the Deutsche Telekom/Powertel merger, if:

- Powertel sends Deutsche Telekom written notice that Powertel has received a superior proposal, which notice describes the terms of the superior proposal and identifies the proposers, and that Powertel intends to change its recommendation regarding the Deutsche Telekom/Powertel merger; and

- five business days have passed since Deutsche Telekom received the notice. In addition, Powertel must give Deutsche Telekom reasonable opportunity to make adjustments in the terms of the Deutsche Telekom/Powertel merger agreement that would enable the Powertel board of directors to maintain its recommendation to approve the Deutsche Telekom/Powertel merger.

The Deutsche Telekom/Powertel merger agreement also permits Powertel to comply with Rule 14d-9 or Rule 14e-2(a) under the Exchange Act or to make any other disclosure to Powertel stockholders if, in the good faith judgment of the Powertel board of directors, after receiving advice from outside counsel, failure to disclose would result in a reasonable likelihood that the Powertel board of directors would breach its duties to Powertel stockholders under applicable law.

Submission of Deutsche Telekom/Powertel Merger Agreement to Stockholder Vote. The Deutsche Telekom/Powertel merger agreement requires Powertel to submit the Deutsche Telekom/Powertel merger agreement to a stockholder vote at the Powertel special meeting even if the Powertel board of directors no longer recommends approval of the Deutsche Telekom/Powertel merger.

Additional Agreements

The Deutsche Telekom/Powertel merger agreement contains a number of other covenants and agreements by or between Powertel and Deutsche Telekom on subjects including:

- filing financial statements with the SEC;

- notification of the occurrence of material facts, events or circumstances;

- obtaining necessary tax opinions and representation letters;

- actions to be taken to cause the Deutsche Telekom/Powertel merger to qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code and to avoid gain recognition to the stockholders of Powertel in the Deutsche Telekom/Powertel merger under Section 367(a)(1) of the U.S. tax code; and

- taking appropriate actions to attempt to cause the Powertel warrants to be exercised in full prior to the completion of the Deutsche Telekom/Powertel merger to the extent agreed to by Deutsche Telekom and Powertel.

In addition, Deutsche Telekom has agreed to take all steps necessary to cause the new Deutsche Telekom ADSs and Deutsche Telekom ordinary shares to become listed on the NYSE and the Frankfurt Stock Exchange, respectively. Powertel has agreed to the termination of certain existing stockholder agreements.

Deutsche Telekom has additionally agreed to vote its VoiceStream shares in favor of the VoiceStream/Powertel merger.

Senior Discount Notes and Senior Notes

Deutsche Telekom has also agreed to cause the surviving corporation to commence offers to repurchase certain outstanding publicly-traded notes of Powertel pursuant to the terms of their indentures within 30 days following the completion of the Deutsche Telekom/Powertel merger.

Efforts to Complete the Deutsche Telekom/Powertel Merger

Powertel and Deutsche Telekom have agreed to:

- use reasonable best efforts to consummate and make effective the Deutsche Telekom/Powertel merger and the other transactions contemplated by the Deutsche Telekom/Powertel merger agreement;

- obtain in a timely manner all necessary consents, permits, approvals or waivers, from any governmental or regulatory authority which are necessary for the completion of the Deutsche Telekom/Powertel merger;

- promptly prepare and file all required notifications under U.S. antitrust laws and to comply with any requests for additional information, and obtain termination of any applicable waiting periods or obtain any required approvals as promptly as practicable; and

- take all actions within their control necessary to obtain any required regulatory approvals.

- Important Exceptions:

-- Neither Deutsche Telekom nor its subsidiaries is required, nor will Powertel or its subsidiaries be permitted, to divest or hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to Powertel, Deutsche Telekom, VoiceStream or any of their subsidiaries, any material portion of their assets or any of their businesses or product lines; and

-- In connection with any filing or submission required or action to be taken to consummate the Deutsche Telekom/Powertel merger, Powertel will not, without Deutsche Telekom's prior written consent, commit to divest any assets of the business of Powertel and its subsidiaries if such divested assets and/or businesses are material to the assets or profitability of Powertel and its subsidiaries taken as a whole.

Indemnification and Insurance

The surviving corporation of the Deutsche Telekom/Powertel merger is required by the Deutsche Telekom/Powertel merger agreement to maintain in effect the current provisions regarding indemnification of officers and directors contained in the charter and bylaws and any indemnification agreements of Powertel and each of its subsidiaries.

Prior to the completion of the Deutsche Telekom/Powertel merger, Powertel has the right, subject to Deutsche Telekom's prior written approval, to obtain a "tail" coverage directors' and officers' liability

insurance policy providing coverage in amounts and on terms consistent with Powertel's existing insurance for a period of six years after the completion of the Deutsche Telekom/Powertel merger. If Powertel does not obtain this insurance prior to the completion of the Deutsche Telekom/Powertel merger, Deutsche Telekom has agreed to cause the surviving corporation to continue to provide directors' and officers' liability insurance for a period of six years after the completion of the Deutsche Telekom/VoiceStream merger. However, the surviving corporation is not required to expend in any year an amount in excess of 250% of the last annual premium paid by Powertel prior to August 26, 2000. If the aggregate expenditure on coverage exceeds that amount, the surviving corporation will purchase as much insurance as can be obtained for that amount.

Employee Benefits

Following the completion of the Deutsche Telekom/Powertel merger, Deutsche Telekom will take all necessary action so that each current and former Powertel employee who was eligible to participate in a Powertel benefit plan before the Deutsche Telekom/Powertel merger will be eligible to participate in a corresponding employee benefit plan maintained by Deutsche Telekom or its subsidiaries after the Deutsche Telekom/Powertel merger. The Deutsche Telekom/Powertel merger agreement also specifies the treatment of pre-existing conditions, exclusions and waiting periods with respect to current and former employees of Powertel and its subsidiaries under any welfare or fringe benefit plans of Deutsche Telekom in which such employees and former employees participate in after completion of the Deutsche Telekom/Powertel merger.

Powertel agreed to enact and implement the plans described under "The Deutsche Telekom/Powertel Merger and the VoiceStream/Powertel Merger -- Interests of Directors and Officers of Powertel in the Deutsche Telekom/Powertel Merger and the VoiceStream/Powertel Merger" after approval of the specifics of each plan by Deutsche Telekom and VoiceStream, which plans are to be effective as of the completion of the Deutsche Telekom/Powertel merger:

- a $3,000 cash bonus payable to each full-time employee of Powertel who is continuously employed by Powertel during the period starting December 31, 2000 and ending three months after the completion of the Deutsche Telekom/Powertel merger, with such payment prorated for part-time employees and for those employees who are hired after December 31, 2000;

- a $20 million cash retention bonus pool to be paid to 150-300 key employees, as determined by the chief executive officer and chief operating officer of each of VoiceStream and Powertel, with such payments to be earned and payable over the two-year period following the completion of the Deutsche Telekom/Powertel merger;

- a $20 million cash incentive bonus pool to be paid to the same 150-300 key employees, as determined by the chief executive officer and chief operating officer of each of VoiceStream and Powertel, with such payments to be earned and payable in January 2002 for performance during 2001;

- a severance plan for employees of Powertel as of immediately before the completion of the Deutsche Telekom/Powertel merger whose employment is terminated due to job elimination resulting from the Deutsche Telekom/Powertel merger. Severance payments will represent a minimum of four weeks base salary or hourly equivalent and targeted bonus, plus two weeks per year of service, up to a maximum of 20 weeks. Any payments under the severance plan will be reduced by any payments received by the affected employee under the cash bonus, retention bonus or incentive bonus plans described above. To obtain benefits under this plan, an employee must agree to release the surviving corporation from all claims against Powertel, Deutsche Telekom and VoiceStream; and

- Powertel will be allowed to issue an aggregate of 575,000 options prior to the completion of the Deutsche Telekom/Powertel merger to Powertel employees in yearly performance grants, to DiGiPH employees that become Powertel employees and in connection with offers of employment

outstanding as of August 26, 2000. Employees whose employment is terminated due to job elimination resulting from the merger will receive change of control accelerated vesting of their options if their job is eliminated within 18 months of the completion of the Deutsche Telekom/Powertel merger. Individuals receiving change of control vesting will not be eligible for payments under the cash bonus, retention bonus or incentive bonus plans but will be eligible for severance payments, subject to certain reductions.

Closing Conditions

Conditions to Each Party's Obligations to Complete the Deutsche Telekom/Powertel Merger. Powertel's and Deutsche Telekom's respective obligations to complete the Deutsche Telekom/Powertel merger are subject to the satisfaction or waiver of conditions, including the following:

- Powertel Stockholder Approval. The holders of a majority of the outstanding voting power of the Powertel common shares and Series A preferred shares, voting together as a single class with the Series A preferred shares voting on an as-converted-to-common shares basis, and the holders of two-thirds of each class of the Powertel Series A preferred shares, Series B preferred shares, Series D preferred shares, Series E preferred shares and Series F preferred shares, each voting as a separate class, having approved and adopted the Deutsche Telekom/Powertel merger agreement.

- Legality. The absence of any law, order or injunction preventing the completion of the Deutsche Telekom/Powertel merger or which would have a material adverse affect on Powertel.

- Regulatory Approvals. All required regulatory approvals having been obtained and all applicable waiting periods having expired, as described under "Regulatory Approvals -- Regulatory Approvals Required for the Deutsche Telekom/VoiceStream Merger and the Deutsche Telekom/Powertel Merger."

- Registration Statement Effective. No stop order suspending the effectiveness of the Form F-4 registration statement or the proxy statement/prospectus then being in effect and no proceedings for that purpose then being threatened by the SEC or having been initiated by the SEC and not concluded or withdrawn.

- Stock Exchange Listings.

-- All steps necessary for the Deutsche Telekom ordinary shares that will be issued in the Deutsche Telekom/Powertel merger to be listed on the Frankfurt Stock Exchange having been taken; and

-- The Deutsche Telekom ADSs that will be issued in the Deutsche Telekom/Powertel merger having been authorized for listing on the NYSE, subject to official notice of issuance.

- Deutsche Telekom/VoiceStream Merger. The Deutsche Telekom/VoiceStream merger having been consummated.

Additional Conditions to the Obligations of Powertel. The obligations of Powertel to effect the Deutsche Telekom/Powertel merger are also subject to the satisfaction, or waiver by Powertel, of conditions, including the following:

- Representations and Warranties True and Correct.

-- Deutsche Telekom's representation that, since December 31, 1999, there has not been any material adverse effect on Deutsche Telekom will have been true and correct when the Deutsche Telekom/Powertel merger agreement was entered into and as of the date the Deutsche Telekom/Powertel merger is completed; and

-- other representations and warranties of Deutsche Telekom and the representations and warranties of merger subsidiary in the Deutsche Telekom/Powertel merger agreement having been true and correct, with respect to Deutsche Telekom, when the Deutsche Telekom/ Powertel merger agreement was entered into and, with respect to merger subsidiary, when the

Deutsche Telekom/Powertel merger agreement was amended and restated and, with respect to Deutsche Telekom and merger subsidiary, as of the date the Deutsche Telekom/Powertel merger is completed, except to the extent that any representation or warranty expressly speaks as of an earlier date, in which case that representation or warranty must have been true and correct as of that date;

(a) except for inaccuracies caused by changes permitted by the Deutsche Telekom/Powertel merger agreement; and

(b) except for such failures which in the aggregate would not reasonably be expected to result in a material adverse effect on Deutsche Telekom.

Notwithstanding the conditions described above, Deutsche Telekom is permitted to make subsequent acquisitions, and no changes resulting to any of its representations and warranties as a result of a subsequent transaction will result in a failure of these conditions.

- Compliance with Covenants. Deutsche Telekom having complied in all material respects with all its agreements and covenants required by the Deutsche Telekom/Powertel merger agreement to be complied with by the completion of the Deutsche Telekom/Powertel merger.

- Receipt of FCC Opinion. Powertel having received an opinion of FCC counsel to Deutsche Telekom and/or VoiceStream substantially in the form agreed upon in the Deutsche Telekom/Powertel merger agreement.

- Receipt of Governmental Approvals. All necessary consents or authorizations from any governmental or regulatory authority required for the Deutsche Telekom/Powertel merger having been received, unless the failure to receive any such consent or authorization would not have a material adverse effect on Deutsche Telekom or the transactions contemplated by the Deutsche Telekom/Powertel merger agreement, provided that the consents or authorizations do not contain any conditions which would reasonably be expected to have a material adverse effect on Deutsche Telekom or the transactions contemplated by the Deutsche Telekom/Powertel merger agreement. However, Powertel's obligation to effect the Deutsche Telekom/Powertel merger will not be subject to the condition that any FCC consents or authorizations have become final orders.

- Receipt of Tax Opinion. Powertel having received an opinion of Morris, Manning & Martin, LLP, dated as of the date the Deutsche Telekom/Powertel merger is completed, substantially to the effect that for U.S. federal income tax purposes:

-- the Deutsche Telekom/Powertel merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code; and

-- each transfer of property to Deutsche Telekom by a stockholder of Powertel pursuant to the Deutsche Telekom/Powertel merger will not be subject to Section 367(a)(1) of the U.S. tax code.

Additional Conditions to the Obligations of Deutsche Telekom. The obligations of Deutsche Telekom to effect the Deutsche Telekom/Powertel merger are also subject to the satisfaction, or waiver by Deutsche Telekom, of conditions, including the following:

- Representations and Warranties True and Correct.

-- Powertel's representation that since December 31, 1999, there has not been any material adverse effect on Powertel will have been true and correct when the Deutsche Telekom/Powertel merger agreement was entered into and as of the date the Deutsche Telekom/Powertel merger is completed; and

-- other representations and warranties of Powertel in the Deutsche Telekom/Powertel merger agreement having been true and correct when the Deutsche Telekom/Powertel merger

agreement was entered into and as of the date the Deutsche Telekom/Powertel merger is completed;

(1) except for inaccuracies caused by changes permitted by the Deutsche Telekom/ Powertel merger agreement; and

(2) except for such failures which in the aggregate would not reasonably be expected to result in a material adverse effect on Powertel, Deutsche Telekom or the transactions contemplated by the Deutsche Telekom/Powertel merger agreement.

- Compliance with Covenants. Powertel having complied in all material respects with all its agreements and covenants required by the Deutsche Telekom/Powertel merger agreement to be complied with by the time the Deutsche Telekom/Powertel merger is completed.

- Receipt of Tax Opinion. Deutsche Telekom having received an opinion of Cleary, Gottlieb, Steen & Hamilton, dated as of the date the Deutsche Telekom/Powertel merger is completed, substantially to the effect that for U.S. federal income tax purposes:

-- the Deutsche Telekom/Powertel merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code; and

-- each transfer of property to Deutsche Telekom by a stockholder of Powertel pursuant to the Deutsche Telekom/Powertel merger will not be subject to Section 367(a)(1) of the U.S. tax code.

- Receipt of FCC Opinion. Deutsche Telekom having received an opinion of FCC counsel of Powertel substantially in the form agreed upon in the Deutsche Telekom/Powertel merger agreement.

- Receipt of Consents. Powertel having obtained all material consents or approvals required under Powertel's and its subsidiaries' debt instruments.

- Receipt of Governmental Approvals. All necessary consents or authorizations from any governmental or regulatory authority required for the Deutsche Telekom/Powertel merger having been received, including from the FCC and state public utility or service commissions and, in the case of the FCC, having become final orders, unless the failure to receive any such consent or authorization would not have a material adverse effect on Powertel or Deutsche Telekom or the transactions contemplated by the Deutsche Telekom/Powertel merger agreement and such consents or authorizations do not contain any conditions which would reasonably be expected to have a material adverse effect on Powertel or Deutsche Telekom or the transactions contemplated by the Deutsche Telekom/Powertel merger agreement.

Waiver of Conditions. In the event Powertel waives a material condition to the Deutsche Telekom/Powertel merger, Powertel will, if legally required, resolicit approval of its stockholders.

Termination and Termination Fee

Automatic Termination. The Deutsche Telekom/Powertel merger agreement will terminate automatically upon the termination of the Deutsche Telekom/VoiceStream merger agreement.

Right to Terminate. The Deutsche Telekom/Powertel merger agreement may be terminated at any time before the completion of the Deutsche Telekom/Powertel merger in any of the following ways:

- by mutual written consent;

- by either Deutsche Telekom or Powertel:

-- if the Deutsche Telekom/Powertel merger has not been completed on or before December 31, 2001, unless the party seeking to terminate the Deutsche Telekom/Powertel

merger has failed to fulfill its obligations under the Deutsche Telekom/Powertel merger agreement and such failure has caused the delay;

-- if the Deutsche Telekom/Powertel merger is permanently restrained, enjoined or otherwise prohibited by a governmental order, decree, ruling or other action, and the order, decree, ruling or other action has become final and nonappealable;

-- at any time that is not less than 15 days after any statute, rule, decree, order or injunction has been enacted, entered, promulgated or enforced by any governmental or regulatory authority, other than a court, that has the effect of making any of the closing conditions described under "-- Closing Conditions -- Legality," "-- Closing Conditions -- Regulatory Approvals" and "Regulatory Approvals -- Regulatory Approvals Required for the Deutsche Telekom/VoiceStream Merger and the Deutsche Telekom/Powertel Merger" incapable of being satisfied by December 31, 2001; or

-- if Powertel's stockholders fail to approve the Deutsche Telekom/Powertel merger at the Powertel special meeting; or

- by Powertel:

-- if a condition to the obligations of Powertel to complete the Deutsche Telekom/Powertel merger is or becomes incapable of being satisfied prior to December 31, 2001; or

-- if Deutsche Telekom breaches or fails to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the Deutsche Telekom/Powertel merger agreement, which breach or failure cannot be cured by Deutsche Telekom before December 31, 2001, or, if curable, is not cured by Deutsche Telekom within 30 days of receipt by Deutsche Telekom of notice of the breach from Powertel and such breach or failure renders any condition to the obligation of Powertel to complete the Deutsche Telekom/Powertel merger incapable of being satisfied prior to December 31, 2001; or

- by Deutsche Telekom:

-- if Powertel breaches or fails to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the Deutsche Telekom/Powertel merger agreement, which breach or failure cannot be cured by Powertel before December 31, 2001, or, if curable, is not cured by Powertel within 30 days of receipt by Powertel of notice of the breach from Deutsche Telekom and such breach or failure renders any condition to the obligations of Deutsche Telekom to complete the Deutsche Telekom/Powertel merger incapable of being satisfied prior to December 31, 2001;

-- if a condition to the obligations of Deutsche Telekom to complete the Deutsche Telekom/Powertel merger is or becomes incapable of being satisfied prior to December 31, 2001;

-- if, in connection with the grant of any required regulatory approval relating to the Deutsche Telekom/Powertel merger, Powertel, Deutsche Telekom, VoiceStream or any of their subsidiaries will be required to divest or hold separate or otherwise take any action that limits its freedom of action with respect to Powertel, Deutsche Telekom, VoiceStream or any of their subsidiaries or any material assets of Powertel, Deutsche Telekom, VoiceStream or any of their subsidiaries, or any of the businesses, product lines or assets of Powertel, Deutsche Telekom, VoiceStream or any of their subsidiaries and such order, decree, ruling, or other action will have become final and nonappealable; or

-- if the VoiceStream/Powertel merger agreement has been terminated at any time prior to the termination or consummation of the Deutsche Telekom/VoiceStream merger agreement.

Termination Fees Payable to Deutsche Telekom. Powertel has agreed to pay Deutsche Telekom a termination fee of $150 million plus expenses not to exceed $10 million if all three of the following events occur:

- after August 26, 2000 and before the Powertel special meeting a proposal for certain types of alternative transactions is announced or publicly disclosed and not withdrawn;

- the Deutsche Telekom/Powertel merger agreement is terminated by either party because Powertel's stockholders do not approve the Deutsche Telekom/Powertel merger at the Powertel special meeting; and

- within six months after the termination of the Deutsche Telekom/Powertel merger agreement, Powertel enters into a definitive agreement with any third party with respect to certain types of alternative transactions.

In that circumstance, Powertel would pay to Deutsche Telekom the termination fee no later than one business day after the signing of the definitive agreement with the third party.

In the event Powertel is also obligated to pay a termination fee pursuant to the VoiceStream/Powertel merger agreement, Powertel will instead pay each of Deutsche Telekom and VoiceStream $75 million plus expenses not to exceed $10 million. For purposes of determining whether a termination fee is payable, the term "alternative transaction" has the meaning described under "-- Offers for Alternative Transactions," except that the 20% thresholds are treated as 50% thresholds, and mergers or business combinations in which Powertel stockholders would continue to hold at least 65% of the outstanding stock of the entity surviving the transaction are not considered to be "alternative transactions".

Expenses

Whether or not the Deutsche Telekom/Powertel merger is completed, all costs and expenses incurred in connection with the Deutsche Telekom/Powertel merger and the Deutsche Telekom/Powertel merger agreement will be paid by the party incurring the expense, except that Deutsche Telekom, VoiceStream and Powertel will share equally the costs and expenses of printing the Form F-4 registration statement and this document, and Deutsche Telekom and Powertel will each share equally the costs and expenses of any SEC filing fees with respect to the Deutsche Telekom/Powertel merger. Deutsche Telekom, VoiceStream and Powertel have shared the costs and expenses of the filing fees paid under the HSR Act.

Amendment; Waiver; Assignment

Powertel, Deutsche Telekom and merger subsidiary may amend the Deutsche Telekom/Powertel merger agreement by written agreement prior to completion of the Deutsche Telekom/Powertel merger, but after Powertel's stockholders have approved the Deutsche Telekom/Powertel merger agreement, no amendment may be made which by law requires further stockholder approval without such approval being obtained.

At any time before the Deutsche Telekom/Powertel merger is completed, Powertel, Deutsche Telekom and merger subsidiary may:

- extend the time for the performance of any of the obligations or other acts required by the Deutsche Telekom/Powertel merger agreement; and

- waive any inaccuracies in the representations and warranties or contained in the Deutsche Telekom/Powertel merger agreement or any document required to be delivered pursuant to the Deutsche Telekom/Powertel merger agreement.

Deutsche Telekom, Powertel and merger subsidiary may not assign the Deutsche Telekom/Powertel merger agreement or any of their rights, interests or obligations under the Deutsche Telekom/Powertel

merger agreement, in whole or in part, to any other person, without the prior written consent of the non-assigning parties; except that:

- Deutsche Telekom may assign the Deutsche Telekom/Powertel merger agreement to an entity which owns more than 80% of the Deutsche Telekom ordinary shares and which succeeds to all of the rights and obligations of Deutsche Telekom under the Escrow Agency Agreement executed pursuant to the Deutsche Telekom/Powertel merger agreement; and

- merger subsidiary may assign the Deutsche Telekom/Powertel merger agreement to an entity which is a direct, wholly-owned subsidiary of the entity to which Deutsche Telekom has assigned the agreement under the immediately preceding clause.

Important Definition

"material adverse effect." As used in the Deutsche Telekom/Powertel merger agreement, a "material adverse effect" on any company means any change in or effect on the business of the company and its subsidiaries that is or is reasonably likely to be materially adverse to the business, operations or financial condition of the company.

However, "material adverse effect" does not include the effects of changes or developments:

- in the wireless telecommunications industry, including regulatory and political conditions, and not uniquely relating to Deutsche Telekom or Powertel;

- in the U.S. or European economy;

- in the U.S. or European securities markets; or

- resulting from the announcement or the existence of the Deutsche Telekom/Powertel merger agreement and the transactions contemplated by the Deutsche Telekom/Powertel merger agreement.

Amendment and Restatement

The Deutsche Telekom/Powertel merger agreement was originally entered into between Deutsche Telekom and Powertel on August 26, 2000. On September 28, 2000 the Deutsche Telekom/Powertel merger agreement was amended and restated for the purpose of making merger subsidiary a party to the agreement and other technical changes.

DEUTSCHE TELEKOM'S AGREEMENTS WITH STOCKHOLDERS OF POWERTEL

In connection with the execution of the Deutsche Telekom/Powertel merger agreement, stockholders of Powertel who, in the aggregate, had sufficient voting power as of the Powertel record date to approve the Deutsche Telekom/Powertel merger entered into separate stockholder agreements with Deutsche Telekom and agreed to vote all of their shares in favor of the Deutsche Telekom/Powertel merger. We summarize the material terms of these agreements below, and this description is qualified in its entirety by reference to the text of the agreements, copies of which have been filed as exhibits to Deutsche Telekom's and VoiceStream's respective registration statements and are incorporated herein by reference.

The following Powertel stockholders and some of their affiliates have entered into stockholder agreements with Deutsche Telekom in connection with the Deutsche Telekom/Powertel merger:

ITC Holding Company, Inc.
SCANA Communications Holdings, Inc.
Sonera Corporation
Donald W. Burton and certain limited partnerships controlled by him American Water Works Company

Agreement to Vote

Each stockholder agreement obligates the stockholder that is a party to the agreement to vote all its Powertel shares in favor of the Deutsche Telekom/Powertel merger and the Deutsche Telekom/Powertel merger agreement and to vote all of its Powertel shares against any alternative transaction, as defined in the Deutsche Telekom/Powertel merger agreement and as discussed under "-- The Deutsche Telekom/ Powertel Merger Agreement -- Offers For Alternative Transactions," or the liquidation or winding up of Powertel. Each stockholder's obligation to vote in this manner applies whether or not the Powertel board of directors continues to recommend the Deutsche Telekom/Powertel merger to the Powertel stockholders.

Transfer Restrictions and Waiver of Rights

Each stockholder agreement restricts or limits the ability of the stockholder that is a party to the agreement to sell, transfer, pledge, assign or otherwise dispose of, including by short sale or the use of derivative or futures contracts, any shares of, or rights to purchase, Powertel shares or, until six months after completion of the Deutsche Telekom/Powertel merger, Deutsche Telekom ADSs or Deutsche Telekom ordinary shares, in each case that are subject to the stockholder agreement, except in limited circumstances, with Deutsche Telekom's written consent or as expressly permitted by the stockholder agreement or pursuant to the Deutsche Telekom/Powertel merger agreement. In that regard, each stockholder agreement, other than the agreement with American Water Works Company, provides that:

- until the later of January 1, 2001 and the date of the Powertel special meeting, the stockholder may not sell, transfer, pledge, assign or otherwise dispose of, any Powertel shares or rights that are subject to the stockholder agreement;

- from the later of January 1, 2001 and the date of the Powertel special meeting, until the earlier of the completion of the Deutsche Telekom/Powertel merger or the termination of the Deutsche Telekom/Powertel merger agreement, the stockholder may sell or transfer up to an aggregate of 17.5% of the total number of Powertel shares owned by such stockholder, which percentage increases to 21.25% on August 1, 2001 and to 25% on September 1, 2001 if the Deutsche Telekom/Powertel merger is not completed by those dates;

- from the completion of the Deutsche Telekom/Powertel merger through and including the three month anniversary of the completion of the Deutsche Telekom/Powertel merger, the stockholder may not sell or transfer any Deutsche Telekom ADSs, Deutsche Telekom ordinary shares or securities convertible into Deutsche Telekom ADSs or Deutsche Telekom ordinary shares;

- from the day following the three month anniversary of the completion of the Deutsche Telekom/Powertel merger, through and including the six month anniversary of the completion of the

Deutsche Telekom/Powertel merger, the stockholder may sell or transfer up to an aggregate of 40% of the total number of Deutsche Telekom ADSs or Deutsche Telekom ordinary shares owned by the stockholder, as calculated pursuant to the stockholder agreement; and

- after the six month anniversary of the completion of the Deutsche Telekom/Powertel merger, all sale and transfer restrictions end.

Deutsche Telekom reserves the right to waive the transfer restrictions described above at any time or from time to time.

Each stockholder, other than American Water Works Company, agreed to waive, until the earlier of the completion of the Deutsche Telekom/Powertel merger or termination of the Deutsche Telekom/Powertel merger agreement, any preemptive rights and, until the earlier of:

- the later of (A) January 1, 2001 and (B) the date of the Powertel special meeting; and

- the termination of the Deutsche Telekom/Powertel merger agreement,

any registration rights they may have.

Each stockholder also agreed to terminate any of its existing registration rights agreements with Powertel upon the completion of the Deutsche Telekom/VoiceStream merger.

In some circumstances, if Deutsche Telekom acquires any other company for consideration in excess of $15 billion and significant stockholders of the acquired company enter into agreements or could reasonably be expected to enter into agreements with Deutsche Telekom that are more favorable to those stockholders in terms of the obligations to vote in favor of the related transaction or to refrain from selling or transferring shares, the transfer restrictions in the stockholder agreements will be modified to reflect the more favorable provisions or absence of restrictions, as the case may be.

Termination

Each stockholder agreement will terminate upon the earliest to occur of:

- the completion of the Deutsche Telekom/Powertel merger;

- the termination of the Deutsche Telekom/Powertel merger agreement; and

- August 26, 2002.

No Solicitation

Each stockholder agrees not to solicit, initiate or participate in, and not to authorize any representatives to solicit, initiate or participate in, discussions or negotiations regarding transactions or business combinations between Powertel and a company other than Deutsche Telekom, except as otherwise permitted by the Deutsche Telekom/Powertel merger agreement. See "-- The Deutsche Telekom/Powertel Merger Agreement -- Offers for Alternative Transactions."

The Stockholder Agreement with American Water Works Company

The transfer restrictions described above applicable to each of the stockholder agreements do not apply to American Water Works Company. The American Water Works Company stockholder agreement only restricts transfers of Powertel shares by the American Water Works Company as described below:

- until the date of the Powertel special meeting, the American Water Works Company may not sell, transfer, pledge, assign or otherwise dispose of, any Powertel shares or rights that are subject to its stockholder agreement; and

- until the date of the Powertel special meeting, the American Water Works Company may not effect, directly or indirectly, or through any arrangement with a third party pursuant to which such third party may effect, directly or indirectly, any short sales of Powertel shares that are subject to its stockholder agreement, as well as any short sales of Deutsche Telekom ADS, Deutsche Telekom

ordinary shares or securities convertible into Deutsche Telekom ADSs or Deutsche Telekom ordinary shares that are subject to the agreement.

DEUTSCHE TELEKOM'S AGREEMENT WITH JOINT VENTURE PARTNERS OF POWERTEL

In connection with the execution of the Deutsche Telekom/Powertel merger agreement, Deutsche Telekom entered into separate agreements with Eliska Wireless Investors I, L.P. and Sonera Holding B.V., joint venture partners of Powertel. We summarize the material terms of these agreements below and the following summaries are qualified in their entirety by reference to the text of the agreements, copies of which have been filed as an exhibit to Deutsche Telekom's and VoiceStream's respective registration statements and are incorporated herein by reference.

Agreement with Eliska Wireless Investors I, L.P.

Under the agreement with Eliska Wireless Investors, Deutsche Telekom agreed to assume on the date the Deutsche Telekom/Powertel merger is completed various obligations of Powertel under an existing agreement relating to Eliska Wireless Investors' rights, exercisable at various times, to exchange its ownership interest in an affiliate of Eliska Wireless for shares or cash. Eliska Wireless Investors agreed that its registration rights under an existing agreement will be terminated on the date the Deutsche Telekom/Powertel merger is completed.

Agreement with Sonera Holding B.V.

Deutsche Telekom has agreed to assume, on the date the Deutsche Telekom/Powertel merger is completed, obligations under an existing agreement between Powertel and Sonera Holding B.V. relating to the DiGiPH transaction, including, without limitation, Sonera Holding's B.V. right to exchange its ownership interest in an affiliate of Eliska Wireless for Deutsche Telekom shares.

THE VOICESTREAM/POWERTEL MERGER AGREEMENT

The following is a summary of the principal provisions of the VoiceStream/Powertel merger agreement. This summary is qualified in its entirety by reference to the VoiceStream/Powertel merger agreement, a copy of which is attached as Annex C to this proxy statement/prospectus and is incorporated herein by reference. VoiceStream and Powertel stockholders are urged to read the VoiceStream/Powertel merger agreement in its entirety, as it is the legal document governing the VoiceStream/Powertel merger. This section assumes that the VoiceStream/Powertel merger will occur. You should remember, however, that the VoiceStream/Powertel merger will not occur if the Deutsche Telekom/VoiceStream merger occurs.

The VoiceStream/Powertel Merger

A Delaware corporation formed by VoiceStream, will merge with and into Powertel, and, as a result, Powertel will become a wholly-owned subsidiary of VoiceStream.

Effective Time and Timing of Closing

The VoiceStream/Powertel merger will be completed and become effective when Powertel files a certificate of merger with the Secretary of State of the State of Delaware or at such later time as is specified in the certificate of merger in accordance with Delaware law. We expect the VoiceStream/ Powertel merger to become effective on the same day as the closing of the VoiceStream/Powertel merger. The closing of the VoiceStream/Powertel merger will take place on the fifth business day after the conditions to the VoiceStream/Powertel merger have been satisfied or waived, or on such other date as VoiceStream and Powertel may agree. In addition, on the closing date of the VoiceStream/Powertel merger or as soon as possible after the closing date, VoiceStream and Powertel will undertake a number of additional actions, including making filings with regulatory and stock exchange authorities, necessary to

permit the issuance of the VoiceStream/Powertel merger consideration under Delaware law and the rules of the Nasdaq Stock Market.

Consideration to Be Received in the VoiceStream/Powertel Merger

In the VoiceStream/Powertel merger, holders of Powertel common shares will receive for each of their Powertel common shares a number of VoiceStream common shares determined as follows:

- 0.75 of a VoiceStream common share if the VoiceStream average closing price is $113.33 or below;

- 0.65 of a VoiceStream common share if the VoiceStream average closing price is $130.77 or above; or

- if the VoiceStream average closing price is greater than $113.33 and less than $130.77, the quotient determined by dividing $85.00 by the VoiceStream average closing price.

We refer to the number of VoiceStream common shares a Powertel stockholder will receive in the VoiceStream/Powertel merger in exchange for their Powertel common shares as the "conversion number". The conversion number is subject to adjustment as described below.

Holders of Powertel preferred shares will receive for each Powertel preferred share the right to receive a number of VoiceStream common shares determined by multiplying the conversion number by the sum of:

- the number of Powertel common shares into which such Powertel preferred share would be converted as of the completion of the VoiceStream/Powertel merger, plus

- with respect to Powertel Series E preferred shares and Series F preferred shares, the number of Powertel common shares that represent accrued or declared but unpaid dividends on those Powertel preferred shares.

The "VoiceStream average closing price" means the volume weighted average closing price, based on the Nasdaq composite volume published by The Wall Street Journal, of the VoiceStream common shares as publicly reported on the Nasdaq Stock Market as of 4:00 p.m. eastern time on 10 trading days randomly selected from the 20 trading-day period ending five trading days prior to the completion of the VoiceStream/Powertel merger.

Adjustment of Conversion Number. The conversion number was determined assuming that at the time the VoiceStream/Powertel merger is completed, the aggregate number of Powertel common shares outstanding on a fully diluted basis and adjusted for specific commitments to issue Powertel common shares, excluding Powertel common shares issuable as dividends after August 26, 2000 on the Series E preferred shares and Series F preferred shares, will not exceed the "maximum share amount". In this document we refer to this aggregate number of Powertel common shares as the "adjusted fully diluted shares amount." The maximum share amount is 55,742,000 and may be reduced as set forth in the VoiceStream/Powertel merger agreement. The conversion number is subject to adjustment in the event that the adjusted fully diluted shares amount as of the date the VoiceStream/Powertel merger is completed exceeds the maximum share amount. In the event of an adjustment, the effect will be to cap the number of VoiceStream common shares that will be issued in the VoiceStream/Powertel merger and to reduce the number of VoiceStream common shares to be received by Powertel stockholders, optionholders and warrantholders in the VoiceStream/Powertel merger in exchange for each of their Powertel common shares or Powertel preferred shares, as the case may be. We illustrate below how the adjustment mechanism will be used.

- Step 1. Derive the adjusted fully diluted shares amount: The adjusted fully diluted shares amount is the sum of the number of outstanding Powertel common shares, less the number of shares issuable as dividends after August 26, 2000 on the Series E preferred shares and Series F preferred shares, plus

-- the number of Powertel common shares issuable upon conversion of the Powertel preferred shares;

-- the number of Powertel common shares issuable pursuant to the exercise of Powertel stock options and Powertel warrants;

-- the number of Powertel common shares issuable pursuant to Powertel restricted stock awards;

-- the number of Powertel common shares issuable pursuant to the exercise of the put rights held by Sonera Holding B.V. and Eliska Wireless Investors, unless such rights have been terminated;

-- the number of Powertel common shares issuable pursuant to the stock purchase agreement between Powertel and Sonera Holding B.V., unless this stock purchase agreement has been terminated;

-- the number of Powertel common shares issuable pursuant to the exercise of any stock appreciation rights, phantom stock rights or other contractual rights the value of which is determined in whole or in part by the value of any Powertel shares; and

-- the number of Powertel common shares issuable pursuant to any other securities outstanding, which are convertible into, or exercisable or exchangeable for, Powertel common shares.

- Step 2. Derive the adjustment factor: The adjustment factor is a fraction
(a) the numerator of which is 55,742,000, as it may be adjusted in accordance with the VoiceStream/Powertel merger agreement, and (b) the denominator of which is the adjusted fully diluted shares amount.

- Step 3. Derive the adjusted conversion number: The conversion number will be reduced by multiplying the conversion number by the adjustment factor.

- Step 4. Derive the adjusted stock consideration: Each outstanding Powertel common share, each Powertel common share issuable upon the exercise of outstanding Powertel warrants and Powertel stock options and each Powertel preferred share will then be converted in the VoiceStream/ Powertel merger into the right to receive a number of VoiceStream common shares equal to the adjusted conversion number calculated pursuant to Step 3.

Example. If the adjusted fully diluted shares amount exceeds 55,742,000, as it may be adjusted in accordance with the VoiceStream/Powertel merger agreement, we would calculate the number of VoiceStream common shares into which each Powertel share will be converted as illustrated above. Assuming that the adjusted fully diluted shares amount is 55,795,000, then the adjustment factor would be 0.9991. If you own 100 Powertel common shares and the VoiceStream average closing price is $110.00 under these circumstances, you would receive the amount of VoiceStream common shares equal to 0.75 multiplied by 0.9991, multiplied by the number of shares you hold, or 100, for a total of 74 VoiceStream common shares, plus cash for 0.929 of a VoiceStream common share.

Powertel stockholders will not receive fractional VoiceStream common shares and instead will receive an amount of cash calculated in the manner described under "-- Exchange of Certificates Representing Powertel Shares."

Other Potential Adjustments. The conversion number will be adjusted in the event that one of the following occurs or the record date for one of the following is set before the completion of the VoiceStream/Powertel merger:

- any reclassification, stock-split or stock dividend with respect to the VoiceStream common shares;

- any change, exchange or conversion of VoiceStream common shares into other securities or property; or

- any dividend or distribution with respect to VoiceStream common shares.

Treatment of Powertel Warrants

VoiceStream will assume all obligations of Powertel with respect to any warrants to purchase Powertel common shares granted pursuant to the warrant agreement dated February 7, 1996 between Powertel and Bankers Trust Company, as warrant agent, outstanding at the time the VoiceStream/Powertel merger is completed.

Exchange of Certificates Representing Powertel Shares

ChaseMellon Shareholder Services LLC will act as exchange agent in the VoiceStream/Powertel merger. Shortly after the VoiceStream/Powertel merger is completed, ChaseMellon will mail to each registered holder of Powertel common shares and Powertel preferred shares a letter of transmittal which the holder must properly complete and deliver to the exchange agent with the holder's stock certificates.

After a record holder of Powertel shares delivers certificates for those shares and a properly completed letter of transmittal to the exchange agent, the exchange agent will deliver to the holder:

- the number of whole VoiceStream common shares included in the merger consideration in respect of such Powertel shares; and

- after giving effect to any required tax withholdings, a check in the amount of:

-- cash in lieu of any fractional interest in VoiceStream common shares on the terms described below, plus

-- any cash dividends or other distributions that the holder has the right to receive, including dividends or other distributions payable with respect to the holders of VoiceStream common shares with a record date after the completion of the VoiceStream/Powertel merger and a payment date on or before the date the holder properly delivers Powertel stock certificates to the exchange agent.

The exchange agent will not deliver fractional VoiceStream common shares in connection with the VoiceStream/Powertel merger. Instead, each holder of Powertel shares exchanged in the VoiceStream/Powertel merger who would otherwise have received a fraction of a VoiceStream common share will be entitled to receive an amount in cash determined by multiplying the per share closing price on the Nasdaq Stock Market of VoiceStream common shares on the date on which the VoiceStream/ Powertel merger is completed by the fractional share to which the holder would otherwise be entitled.

Powertel shares that are surrendered to the exchange agent will be canceled. No interest will be paid or accrued on any amount payable to holders of Powertel shares. In addition, no holder of Powertel shares will receive any dividends or other distributions with respect to VoiceStream common shares to which the holder is entitled under the VoiceStream/Powertel merger agreement until that holder's Powertel share certificate is surrendered to the exchange agent with a properly completed letter of transmittal.

If any VoiceStream common shares are to be delivered to a person other than the registered holder of the Powertel shares represented by the certificates surrendered to the exchange agent:

- those Powertel certificates must be properly endorsed or otherwise be in proper form for transfer; and

- the person requesting the delivery must pay to the exchange agent any transfer or other taxes required as a result of delivery to a person other than the registered holder, or establish to the satisfaction of the exchange agent that such tax has been paid or is not payable.

VoiceStream or the exchange agent will be entitled to deduct and withhold from the consideration otherwise payable pursuant to any holder of Powertel shares any amounts they are required to deduct and withhold with respect to the making of such payment under the U.S. tax code or under any provision of state, local or foreign tax law.

Treatment of Powertel Options and Restricted Stock

Powertel Options. If the VoiceStream/Powertel merger is completed, each outstanding Powertel stock option will be converted into an option to purchase the number of VoiceStream common shares determined by multiplying the number of Powertel common shares subject to the option immediately prior to completion of the VoiceStream/Powertel merger by the applicable conversion number. The conversion number is subject to adjustment as described under "-- Consideration to Be Received in the VoiceStream/Powertel Merger." The exercise price per VoiceStream common share for each of these options will be the exercise price per Powertel common share applicable to that option immediately prior to the completion of the VoiceStream/Powertel merger divided by the conversion number increased to the nearest whole cent. The replacement options will generally have the same terms and conditions as were applicable under the Powertel option plans.

Powertel Restricted Stock. At the time the VoiceStream/Powertel merger is completed, the Powertel restricted stock plan will terminate and any unvested Powertel restricted stock awards will become fully vested, except as otherwise provided in the individual restricted stock award agreements.

Dissenting Shares

If appraisal rights for any Powertel preferred shares are perfected by any holder of preferred shares then those shares will be treated as described under "The Deutsche Telekom/Powertel Merger and the VoiceStream/Powertel Merger -- Appraisal Rights."

Representations and Warranties

The VoiceStream/Powertel merger agreement contains a number of representations and warranties made by VoiceStream and Powertel to each other, including those regarding:

- due organization, good standing and qualification;

- capital structure;

- corporate authority to enter into the VoiceStream/Powertel merger agreement and the stockholder agreements and lack of conflicts with corporate governance documents, contracts or laws;

- governmental filings;

- accuracy of SEC reports, financial statements and information provided for inclusion in this document by the parties;

- absence of certain material changes or events since December 31, 1999;

- permits and licenses;

- compliance with laws;

- absence of undisclosed liabilities and pending litigation;

- the receipt of a fairness opinion from a financial advisor;

- finders or brokers fees;

- tax matters, including the absence of facts inconsistent with the qualification of the VoiceStream/Powertel merger as a reorganization under Section 368(a) of the U.S. tax code;

- the vote necessary to approve the VoiceStream/Powertel merger agreement; and

- absence of affiliate transactions.

In addition, Powertel made representations and warranties to VoiceStream as to:

- employee benefit plans;

- employees and employment practices;

- Section 203 of the Delaware General Corporation Law and other anti-takeover laws enacted under Georgia or Delaware law applicable to Powertel;

- intellectual property; and

- material contracts.

In addition, the VoiceStream/Powertel merger agreement contains representations and warranties made by the merger subsidiary to Powertel representing some of the above matters.

Conduct of Business Pending the VoiceStream/Powertel Merger

Covenants of Powertel. Except as contemplated by the VoiceStream/Powertel merger agreement or the Deutsche Telekom/Powertel merger agreement, Powertel has agreed that, until the earlier of completion of the VoiceStream/Powertel merger or the termination of the VoiceStream/Powertel merger agreement, it will carry on its and its subsidiaries' business in the ordinary course in all material respects. Until the VoiceStream/Powertel merger is completed or the VoiceStream/Powertel merger agreement is terminated, Powertel and its subsidiaries will not take the actions listed in the VoiceStream/Powertel merger agreement, which includes the following actions, without VoiceStream's prior written consent, except under limited circumstances specified in the VoiceStream/Powertel merger agreement:

- declare, set aside or pay dividends on, or make distributions in respect of, Powertel shares, or split, combine or reclassify any outstanding Powertel shares;

- redeem or repurchase any Powertel shares, except as required by Powertel's certificate of incorporation or the Powertel stock option plans;

- issue, deliver, pledge, sell or encumber any Powertel shares or any options or other rights to acquire those shares;

- Important Exception:

-- Powertel may issue Powertel common shares upon the closing of the acquisition of substantially all of the assets of DiGiPH PCS, Inc. and its affiliates by Eliska Wireless Ventures, which in this document we refer to as the "DiGiPH transaction," and the performance of the agreements entered into in connection with the DiGiPH transaction, including the stock purchase agreement between Powertel and Sonera Holding B.V., the put agreement dated May 30, 2000 between Powertel, Eliska Wireless Investors and Sonera Holding B.V. and the put agreement dated May 30, 2000 between Powertel and Sonera Holding B.V.; or otherwise pursuant to previously disclosed contractual obligations existing prior to the execution of the VoiceStream/Powertel merger agreement; and

-- Powertel may issue rights to acquire Powertel shares and may issue shares pursuant to such rights for an aggregate of 575,000 Powertel common shares pursuant to annual incentive grants, grants to newly hired employees and grants to be made pursuant to the DiGiPH transaction;

- adopt, amend or propose to amend any stockholder rights plan or related rights plan;

- acquire any business, corporation or partnership, or substantially all of the assets of any of the foregoing;

- Important Exceptions:

-- Powertel is permitted to enter into acquisition transactions which involve individually, or in the aggregate, a purchase price of $500,000 or less without VoiceStream's consent;

-- Powertel is permitted to make capital expenditures in accordance with its capital budget for the fiscal years 2000 and 2001; and

-- Powertel may enter into transactions in connection with the DiGiPH transaction;

- authorize or make capital expenditures other than those for less than the aggregate annual amount contained in Powertel's capital budget for the years 2000 and 2001;

- sell, lease, encumber or otherwise dispose of any of its assets;

- increase the compensation or reimbursement allowances payable to an officer or director;

- enter into employment or severance agreements with, or establish any new benefit plan, other than in the ordinary course of business consistent with past practice or amend any existing Powertel benefit plan or take any action inconsistent with the cash bonus, retention bonus, incentive bonus, severance, equity awards and other plans set out in the VoiceStream/Powertel merger agreement, which are described in more detail below;

- make any awards under an existing Powertel benefit plan for the benefit of any director, officer or employee, except in the ordinary course of business consistent with past practices;

- except as required by a change in law or U.S. GAAP, make any change in its method of accounting or its fiscal year;

- enter into, modify or amend in any material respect or terminate any material contract or agreement to which Powertel is a party, or waive, release or assign any material rights or claims;

- amend any term of any of its outstanding securities in any material respect;

- adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization;

- incur or guarantee material indebtedness, including refinancing existing indebtedness;

- create, incur, assume, or allow to exist material liens upon any property or assets, except for liens arising in the ordinary course of business or to secure indebtedness or arising by operation of law;

- guarantee any indebtedness, leases, dividends or other third party obligations;

- make any loan or capital contributions to or investment in any person, other than loans, capital contributions or investments made in the ordinary course of business, as required in connection with the DiGiPH transaction, or made to wholly-owned subsidiaries;

- enter into any agreement that materially restricts Powertel, or after completion of the VoiceStream/ Powertel merger could materially restrict VoiceStream or the surviving corporation from engaging in the business of providing wireless telecommunications services or developing wireless telecommunications technology anywhere in the world, or otherwise from engaging in any other business;

- initiate, settle, appeal or propose to settle, initiate or appeal any material litigation, investigation, arbitration, proceeding or other claim;

- make any material tax election or enter into any settlement or compromise of any material tax liability;

- take action that could reasonably be expected to make any representation or warranty of Powertel under the VoiceStream/Powertel merger agreement inaccurate and have a material adverse effect on Powertel at the completion of the VoiceStream/Powertel merger;

- adopt, amend or propose to amend any Powertel benefit plans or make any discretionary contributions to any Powertel benefit plan which is also an "employee pension benefit plan" or "employee welfare benefit plan" as defined in the Employee Retirement Income Security Act of 1974, as amended, other than as required by law or as may be required to maintain compliance with the U.S. tax code and except for other limited exceptions;

- file any amended tax returns if the result would be a material increase in Powertel's tax liability;

- take action that would reasonably be expected to materially impair or delay obtaining the necessary regulatory approvals to complete the VoiceStream/Powertel merger;

- take any action that would be reasonably likely to prevent or impede the VoiceStream/Powertel merger from qualifying as a reorganization within the meaning of Section 368(a) of the U.S. tax code;

- take any action that would cause the Powertel common shares to cease to be quoted on the Nasdaq Stock Market;

- during the five business days prior to the completion of the VoiceStream/Powertel merger, take or omit to take any action that could increase the number of Powertel shares outstanding on a fully diluted basis; or

- enter into any contract, agreement or arrangement to do any of the foregoing.

Covenants of VoiceStream. VoiceStream has agreed that until the VoiceStream/Powertel merger is completed, VoiceStream and its subsidiaries will not take the actions listed in the VoiceStream/Powertel merger agreement, which includes the following actions, without Powertel's prior written consent:

- amend its certificate of incorporation or bylaws or the equivalent organizational documents of any of its subsidiaries in any manner that would be adverse to Powertel or its stockholders;

- reclassify, recapitalize, restructure or engage in a similar transaction that results in the receipt by holders of VoiceStream common shares of any assets, property or cash for such VoiceStream common shares;

- take action that would or could reasonably be expected to prevent, impair or materially delay the ability of VoiceStream to complete the VoiceStream/Powertel merger;

- take action that would reasonably be likely to materially adversely affect or materially adversely delay the ability of the parties to obtain any required regulatory approval or to complete the transactions contemplated in the VoiceStream/Powertel merger agreement;

- fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act;

- except as required by a change in law or U.S. GAAP, make any change in its method of accounting or its fiscal year; or

- enter into or acquire any new line of business that is material to VoiceStream and is not strategically related to the current business or operations of VoiceStream.

Offers for Alternative Transactions

Powertel has agreed not to, has agreed not to permit any of its subsidiaries to, has agreed not to authorize or permit any of its or their respective officers, directors or employees to, and has agreed to use its best efforts to cause its advisors and representatives not to:

- solicit, initiate or encourage, or knowingly take any other action designed to facilitate, any alternative transaction, which we define below, to the VoiceStream/Powertel merger; or

- continue or participate in any discussions or negotiations regarding any alternative transaction to the VoiceStream/Powertel merger.

However, if at any time before Powertel stockholders approve the VoiceStream/Powertel merger, Powertel receives an unsolicited proposal for an alternative transaction, then Powertel may, after giving VoiceStream three business days' advance written notice:

- furnish information with respect to Powertel pursuant to a confidentiality agreement substantially similar to the confidentiality agreement in place between VoiceStream and Powertel; and

- engage in discussions and negotiations with the persons that made such proposal;

but only if:

- the Powertel board of directors has determined in good faith, after receiving advice from outside counsel, that providing information to the third party or participating in negotiations or discussions could be reasonably expected to result in a superior proposal, which we define below, being made; and

- Powertel is not otherwise in breach of its obligations described above not to solicit or engage in discussions regarding an alternative transaction.

Important Definitions:

"alternative transaction" means a proposal or intended proposal regarding any of the following:

- a transaction or series of transactions in which any third party would acquire, directly or indirectly, beneficial ownership of outstanding shares representing more than 20% of the voting power of the outstanding Powertel shares or pursuant to a tender offer or exchange offer;

- any acquisition of or business combination with Powertel or any of its subsidiaries, as applicable, by a merger or other business combination; or

- any transaction in which any third party acquires or would acquire, directly or indirectly, control of assets of Powertel or any of its subsidiaries for consideration equal to 20% or more of the fair market value of all of the outstanding Powertel shares.

An alternative transaction does not include the Deutsche Telekom/Powertel merger or the Deutsche Telekom/Powertel merger agreement.

"superior proposal" means any proposal made by a third party to enter into an alternative transaction which the Powertel board of directors determines in its good faith judgment based on, among other things, the advice of a financial advisor of nationally recognized reputation, to be more favorable to Powertel's stockholders than the VoiceStream/Powertel merger taking into account all relevant factors, including whether, in the good faith judgment of the Powertel board of directors, the third party is reasonably able to finance the proposed transaction.

Powertel also has agreed to notify VoiceStream promptly of any request for information or of any proposal in connection with an alternative transaction, including the material terms of the request or proposal and the identity of the person making it, and Powertel has agreed to keep VoiceStream fully informed of the status of any alternative transaction. In addition, Powertel agreed to cease all activities,

discussions or negotiations with respect to an alternative transaction that existed at the time the VoiceStream/Powertel merger agreement was signed.

Powertel Board of Directors' Recommendation

The VoiceStream/Powertel merger agreement requires the Powertel board of directors:

- to recommend that the Powertel stockholders approve the VoiceStream/Powertel merger agreement;

- not to withdraw, modify or qualify, or to propose publicly to withdraw, modify or qualify, its recommendation in a manner adverse to VoiceStream;

- not to approve or recommend, or to propose publicly to approve or recommend any alternative transaction; and

- not to cause Powertel to agree to engage in any alternative transactions.

However, if the Powertel board of directors receives a superior proposal before Powertel stockholders approve the VoiceStream/Powertel merger agreement, the Powertel board of directors may inform the Powertel stockholders that it no longer recommends approval of the VoiceStream/Powertel merger agreement, if:

- Powertel sends VoiceStream written notice that Powertel has received a superior proposal, which notice describes the terms of the superior proposal and the identity of the proposer, and that Powertel intends to change its recommendation regarding the VoiceStream/Powertel merger; and

- five business days have passed since VoiceStream received the notice. In addition, Powertel must give VoiceStream reasonable opportunity to make adjustments in the terms of the VoiceStream/ Powertel merger agreement that would enable the Powertel board of directors to maintain its recommendation to approve the VoiceStream/Powertel merger agreement.

The VoiceStream/Powertel merger agreement also permits Powertel to comply with Rule 14d-9 or Rule 14e-2(a) under the Exchange Act or to make any other disclosure to Powertel stockholders if, in the good faith judgment of the Powertel board of directors, after receipt of advice from outside counsel, failure to disclose would result in a reasonable likelihood that the Powertel board of directors would breach its duties to Powertel stockholders under Delaware law.

Submission of VoiceStream/Powertel Merger Agreement to Stockholder Vote. The VoiceStream/ Powertel merger agreement requires Powertel to submit the VoiceStream/Powertel merger agreement to a stockholder vote at the Powertel special meeting even if the Powertel board of directors no longer recommends approval of the VoiceStream/Powertel merger.

Additional Agreements

The VoiceStream/Powertel merger agreement contains a number of other covenants and agreements by or between VoiceStream and Powertel on subjects including:

- notification of material facts, events or circumstances; and

- registration rights of principal Powertel stockholders.

In addition, VoiceStream has agreed to use its reasonable best efforts to cause the new VoiceStream common shares to be included on the Nasdaq Stock Market.

Senior Discount Notes and Senior Notes

VoiceStream has also agreed to cause the surviving corporation to commence offers to repurchase certain outstanding publicly-traded notes of Powertel pursuant to the terms of their indentures within 30 days following the completion of the VoiceStream/Powertel merger.

Efforts to Complete the VoiceStream/Powertel Merger

VoiceStream and Powertel have agreed to:

- use their reasonable best efforts to take all actions, and to cooperate with the other party in doing, all things necessary to complete the VoiceStream/Powertel merger and the other transactions contemplated by the VoiceStream/Powertel merger agreement;

- take all actions necessary to comply promptly with all legal requirements with respect to the VoiceStream/Powertel merger;

- obtain any consent by any governmental entity or other public or private third party required to be obtained; and

- oppose entry or lift the effects of any injunction or other order adversely affecting their ability to consummate the transactions contemplated by the VoiceStream/Powertel merger agreement.

- Important exceptions:

-- VoiceStream will not be required, nor, without the consent of VoiceStream, will Powertel be permitted, to divest or hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to Powertel, VoiceStream or any of their subsidiaries or any material portion of the assets of Powertel, VoiceStream or any of their subsidiaries or any of the business, product lines, or assets of Powertel, VoiceStream or any of their subsidiaries; and

-- In connection with any filing or submission required or action to be taken to consummate the VoiceStream/Powertel merger, Powertel will not, without VoiceStream's prior written consent, commit to divest any assets of the business of Powertel and its subsidiaries if such divested assets and/or businesses are material to the assets or profitability of Powertel and its subsidiaries taken as a whole.

Indemnification and Insurance

The surviving corporation of the VoiceStream/Powertel merger is required by the VoiceStream/Powertel merger agreement to maintain in effect the current provisions regarding indemnification of officers and directors contained in the charter and bylaws and any indemnification agreements of Powertel and each of its subsidiaries.

Prior to the completion of the VoiceStream/Powertel merger, Powertel has the right, subject to VoiceStream's prior written approval, to obtain a "tail" coverage directors' and officers' liability insurance policy providing coverage in amounts and on terms consistent with Powertel's existing insurance policy for a period of six years after the completion of the VoiceStream/Powertel merger. If Powertel does not obtain this insurance prior to the completion of the VoiceStream/Powertel merger, VoiceStream has agreed to cause the surviving corporation to continue to provide directors' and officers' liability insurance for a period of six years after the completion of the VoiceStream/Powertel merger. However, the surviving corporation is not required to expend in any year an amount in excess of 250% of the last annual premium paid by Powertel prior to August 26, 2000. If the aggregate expenditure on coverage exceeds that amount, the surviving corporation will purchase as much insurance as can be obtained for that amount.

Employee Benefits

Following the completion of the VoiceStream/Powertel merger, VoiceStream will take all necessary action so that each current or former Powertel employee who was eligible to participate in a Powertel benefit plan before the VoiceStream/Powertel merger will either be eligible to continue participation in such Powertel benefit plan or participate in a corresponding employee benefit plan maintained by VoiceStream or any of its subsidiaries. The VoiceStream/Powertel merger agreement also specifies the treatment of pre-existing conditions, exclusions and waiting periods with respect to current and former employees of Powertel and its subsidiaries under any welfare or fringe benefit plans of VoiceStream in

which such employees and former employees participate in after completion of the VoiceStream/Powertel merger.

Powertel agreed to enact and implement the plans described below, after approval of the specifics of each plan by Deutsche Telekom and VoiceStream, which plans are to be effective as of the completion of the VoiceStream/Powertel merger:

- a $3,000 cash bonus payable to each full-time employee of Powertel who is continuously employed by Powertel during the period starting December 31, 2000 and ending three months after the completion of the VoiceStream/Powertel merger, with such payment prorated for part-time employees and for those employees who are hired after December 31, 2000;

- a $20 million cash retention bonus to be paid to 150-300 key employees, as determined by the chief executive officer and chief operating officer of each of VoiceStream and Powertel, with such payments to be earned and payable over a two-year period following the completion of the VoiceStream/Powertel merger;

- a $20 million cash incentive bonus pool to be paid to the same 150-300 key employees, as determined by the chief executive officer and chief operating officer of each of VoiceStream and Powertel, with such payments to be earned and payable in January 2002 for performance during 2001;

- a severance plan for employees of Powertel as of immediately before the completion of the VoiceStream/Powertel merger whose employment is terminated due to job elimination resulting from the VoiceStream/Powertel merger. Severance payments will represent a minimum of four weeks base salary or hourly equivalent and targeted bonus, plus two weeks per year of service, up to a maximum of 20 weeks. Any payments under the severance plan will be reduced by any payments received by the affected employee under the cash bonus, retention bonus or incentive bonus plans described above. To obtain benefits under this plan, an employee must agree to release the surviving corporation from all claims against Powertel, Deutsche Telekom and VoiceStream; and

- Powertel will be allowed to issue an aggregate of 575,000 options prior to the completion of the VoiceStream/Powertel merger, to Powertel employees in yearly performance grants, to DiGiPH employees that become Powertel employees and in connection with offers of employment outstanding as of August 26, 2000. Employees whose employment is terminated due to job elimination resulting from the VoiceStream/Powertel merger will receive change of control accelerated vesting of their options if their job is eliminated within 18 months of the completion of the VoiceStream/Powertel merger. Individuals receiving change of control vesting will not be eligible for payments under the cash bonus, retention bonus or incentive bonus plans but will be eligible for severance payments, subject to certain reductions.

Closing Conditions

Conditions to Each Party's Obligations to Complete the VoiceStream/Powertel Merger. VoiceStream's and Powertel's respective obligations to complete the VoiceStream/Powertel merger are subject to the satisfaction or waiver of conditions, including the following.

- Stockholder Approval. The holders of a majority of the outstanding voting power of the Powertel common shares and Series A preferred shares voting together as a single class with the Series A preferred shares voting on an as-converted-to-common shares basis, and the holders of two-thirds of each class of the Powertel Series A preferred shares, Series B preferred shares, Series D preferred shares, Series E preferred shares and Series F preferred shares, each voting as a separate class, having approved and adopted the VoiceStream/Powertel merger agreement.

- No Injunction or Restraint. The absence of any law, order or injunction preventing the completion of the VoiceStream/Powertel merger or which could reasonably be expected to have a material adverse effect on Powertel.

- Nasdaq Stock Market Listings. Authorization for listing on the Nasdaq Stock Market of the VoiceStream common shares issuable in accordance with the VoiceStream/Powertel merger.

- HSR Act. Expiration or termination of any waiting period under the HSR Act applicable to the VoiceStream/Powertel merger.

- Registration Statement Effective. No stop order suspending the effectiveness of the Form S-4 registration statement or this proxy statement/prospectus will have been issued by the SEC, and no proceedings for that purpose will have been initiated or, to the knowledge of VoiceStream or Powertel, threatened by the SEC.

- Termination of Other Merger Agreements. Termination of the Deutsche Telekom/VoiceStream merger agreement and the Deutsche Telekom/Powertel merger agreement in accordance with their respective terms.

Additional Conditions to the Obligations of Powertel. The obligations of Powertel to effect the VoiceStream/Powertel merger are also subject to the satisfaction, or waiver by Powertel, of conditions, including the following.

- Performance of Obligations; Representations and Warranties.

-- VoiceStream having performed in all material respects each of its agreements contained in the VoiceStream/Powertel merger agreement required to be performed at or prior to the completion of the VoiceStream/Powertel merger; and

-- the representations and warranties of VoiceStream and the representations and warranties of the merger subsidiary in the VoiceStream/Powertel merger agreement will be true and correct at and as of the date the VoiceStream/Powertel merger is complete;

(a) except as contemplated or permitted by the VoiceStream/Powertel merger agreement; and

(b) except for failures which, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement.

Notwithstanding the conditions described above VoiceStream may enter into any subsequent transaction, and no changes of representation or warranty of VoiceStream contained in the VoiceStream/Powertel merger agreement as a result of any subsequent transaction will result in a failure of these conditions, provided the subsequent transaction would not reasonably be expected to have a material adverse effect on VoiceStream.

- Receipt of Consents Under Agreements. VoiceStream having obtained all material consents or approvals required under VoiceStream's and its subsidiaries' debt instruments.

-Receipt of FCC Opinion. Powertel having received an opinion of FCC counsel to VoiceStream substantially in the form agreed upon in the VoiceStream/Powertel merger agreement.

-Receipt of Governmental Approvals. All necessary consents or authorizations from any governmental entities required for the VoiceStream/Powertel merger having been received, unless the failure to receive any such consent or authorization would not have a material adverse effect on VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement, and such consents or authorizations do not contain any conditions which would reasonably be expected to have a material adverse effect on VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement.

- Receipt of Tax Opinion. Powertel having received an opinion of Morris, Manning & Martin, LLP, dated as of the date the VoiceStream/Powertel merger is completed, substantially to the effect that, for U.S. federal income tax purposes, the VoiceStream/Powertel merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code.

Additional Conditions to the Obligations of VoiceStream. The obligations of VoiceStream to effect the VoiceStream/Powertel merger are also subject to the satisfaction, or waiver by VoiceStream, of conditions, including the following.

- Performance of Obligations; Representations and Warranties.

-- Powertel having performed in all material respects each of its agreements contained in the VoiceStream/Powertel merger agreement required to be performed at or prior to the completion of the VoiceStream/Powertel merger; and

-- the representations and warranties of Powertel in the VoiceStream/Powertel merger agreement will be true and correct at and as of the date the VoiceStream/Powertel merger is completed;

(a) except as contemplated or permitted by the VoiceStream/Powertel merger agreement; and

(b) except for failures, which individually or in the aggregate, would not reasonably be expected to have a material adverse effect on Powertel, VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement.

- Receipt of FCC Opinion. VoiceStream having received an opinion of the FCC counsel of Powertel, substantially in the form agreed upon in the VoiceStream/Powertel merger agreement.

- Consents Under Agreements. Powertel having obtained all material consents or approvals required under Powertel's and its subsidiaries' debt instruments.

- Receipt of Governmental Approvals. All necessary consents or authorizations from any governmental entities required for the VoiceStream/Powertel merger having been received and, in the case of the FCC, having become final orders, unless this requirement of finality is waived by VoiceStream in its sole discretion, unless the failure to receive any such consent or authorization would not have a material adverse effect on Powertel or VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement and such consents or authorizations do not contain any conditions which would reasonably be expected to have a material adverse effect on VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement.

- Receipt of Tax Opinion. VoiceStream having received an opinion of Jones, Day, Reavis & Pogue and/or Preston Gates & Ellis LLP, dated as of the date the VoiceStream/Powertel merger is completed, substantially to the effect that, on the basis of the facts, representations and assumptions set forth in the opinion, for U.S. federal income tax purposes, the VoiceStream/Powertel merger will qualify as a reorganization within the meaning of Section 368(a) of the U.S. tax code.

Waiver of Conditions. In the event VoiceStream or Powertel waives a material condition to the VoiceStream/Powertel merger, VoiceStream or Powertel, as applicable, will, if legally required, resolicit approval of its stockholders.

Termination and Termination Fee

Automatic Termination. The VoiceStream/Powertel merger agreement will terminate automatically upon the closing of the Deutsche Telekom/Powertel merger.

Right to Terminate. The VoiceStream/Powertel merger agreement may be terminated at any time before the completion of the VoiceStream/Powertel merger in any of the following ways:

- by mutual written consent;

- by either VoiceStream or Powertel:

-- if the VoiceStream/Powertel merger has not been completed on or before December 31, 2001, unless the party seeking to terminate the VoiceStream/Powertel merger agreement has caused the delay, provided that this date may be accelerated if the Deutsche Telekom/

VoiceStream merger agreement and the Deutsche Telekom/Powertel merger agreement have been terminated;

-- if the VoiceStream/Powertel merger is permanently enjoined or prohibited by a governmental order or ruling, and the order or ruling has become final and nonappealable; or

-- the stockholders of Powertel or VoiceStream do not approve and adopt the VoiceStream/Powertel merger agreement at their respective special meetings; or

- by VoiceStream if:

-- Powertel fails to comply with any of its covenants or agreements contained in the VoiceStream/Powertel merger agreement required to be complied with prior to the date of termination and such failure would reasonably be expected to have a material adverse effect on VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement; and the failure cannot be or has not been cured within 30 days after receipt by Powertel of written notice of the failure to comply; or

-- Powertel breaches any representation or warranty and the breach would reasonably be expected to have a material adverse effect on Powertel, VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement, and the breach cannot be or has not been cured within 30 days after receipt by Powertel of written notice of the breach; or

- by Powertel if:

-- VoiceStream fails to comply with any of its covenants or agreements contained in the VoiceStream/Powertel merger agreement required to be complied with prior to the date of termination and the failure would reasonably be expected to have a material adverse effect on Powertel, VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement, and cannot be or has not been cured within 30 days after receipt by VoiceStream of written notice of the failure to comply; or

-- VoiceStream breaches any representation or warranty contained in the VoiceStream/Powertel merger agreement and the breach would reasonably be expected to have a material adverse effect on VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement, and the breach cannot be or has not been cured within 30 days after receipt by VoiceStream of written notice of the breach.

Termination Fees. Powertel has agreed to pay VoiceStream a termination fee of $150 million plus expenses not to exceed $10 million in the event that Powertel terminates the VoiceStream/Powertel merger agreement because the Powertel stockholders do not adopt and approve the VoiceStream/Powertel merger agreement, or VoiceStream terminates the agreement for one of the following reasons:

- Powertel fails to comply with any of its covenants or agreements contained in the VoiceStream/Powertel merger agreement, the failure would reasonably be expected to have a material adverse effect on VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement and the failure cannot be or has not been cured within 30 days after receipt by Powertel of written notice of the failure to comply;

- the stockholders of Powertel do not adopt and approve the VoiceStream/Powertel merger agreement; or

- Powertel breaches any representation or warranty contained in the VoiceStream/Powertel merger agreement, the breach would reasonably be expected to have a material adverse effect on Powertel, VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger and the breach cannot be or has not been cured within 30 days after receipt by Powertel of written notice of the breach.

Important Exception: In the event Powertel is also obligated to pay a termination fee pursuant to the Deutsche Telekom/Powertel merger agreement, Powertel will instead pay each of Deutsche Telekom and VoiceStream $75 million plus expenses not to exceed $10 million.

VoiceStream has agreed to pay Powertel a termination fee of $150 million plus expenses not to exceed $10 million in the event that Powertel terminates the VoiceStream/Powertel merger agreement for one of the following reasons:

- VoiceStream fails to comply with any of its covenants or agreements contained in the VoiceStream/Powertel merger agreement, the failure would reasonably be expected to have a material adverse effect on Powertel, VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement and the failure cannot be or has not been cured within 30 days after receipt by VoiceStream of the failure to comply;

- the stockholders of VoiceStream do not adopt and approve the VoiceStream/Powertel merger agreement; or

- VoiceStream breaches any representation or warranty contained in the VoiceStream/Powertel merger agreement, the breach would reasonably be expected to have a material adverse effect on VoiceStream or the transactions contemplated by the VoiceStream/Powertel merger agreement and the breach cannot be or has not been cured within 30 days after receipt by VoiceStream of written notice of the breach.

Expenses

Whether or not the VoiceStream/Powertel merger is completed, all fees and expenses incurred in connection with the VoiceStream/Powertel merger and the VoiceStream/Powertel merger agreement will be paid by the party incurring the fees or expenses, except that:

- Deutsche Telekom, VoiceStream and Powertel will share equally the costs and expenses, other than attorneys' fees, incurred in connection with the printing and mailing of this document;

- VoiceStream and Powertel will share equally any filing fees, including fees payable to the SEC and state regulatory authorities, with respect to the proxy statement/prospectus and the registration statement on Form S-4 covering the VoiceStream common shares issuable upon completion of the VoiceStream/Powertel merger; and

- VoiceStream and Powertel will share equally the costs and expenses of any filing fees paid under the HSR Act.

Amendment; Waiver; Assignment

VoiceStream, Powertel and merger subsidiary may amend the VoiceStream/Powertel merger agreement prior to completion of the VoiceStream/Powertel merger, but after VoiceStream's and Powertel's stockholders have approved the VoiceStream/Powertel merger agreement, no amendment may be made which by law requires further stockholder approval without such approval being obtained.

At any time before the VoiceStream/Powertel merger is completed, VoiceStream, Powertel and merger subsidiary may:

- extend the time for the performance of any of the obligations or other acts required by the VoiceStream/Powertel merger agreement; and

- waive any inaccuracies in the representations and warranties or compliance with any of the agreements or conditions, contained in the VoiceStream/Powertel merger agreement or in any document required to be delivered pursuant to the VoiceStream/Powertel merger agreement.

VoiceStream, Powertel and merger subsidiary may not assign the VoiceStream/Powertel merger agreement or any of their rights, interests or obligations under the VoiceStream/Powertel merger agreement without the prior written consent of the non-assigning parties.

Important Definitions

"material adverse effect." As used in the VoiceStream/Powertel merger agreement, a "material adverse effect" on any company means any change, effect, fact or condition that is materially adverse to the business, properties, assets, results of operations or financial condition of the company and its subsidiaries. "Material adverse effect" includes any event, fact or condition which would reasonably be expected to materially delay, interfere with, impair or prevent the transactions contemplated by the VoiceStream/Powertel merger agreement in a manner that would have a material adverse effect on such transactions.

However, "material adverse effect" does not include any adverse change, effect or development that is primarily caused by:

- conditions affecting the U.S. economy generally or the economy of any nation or region in which VoiceStream or Powertel and their subsidiaries conduct business that is material to their businesses;

- conditions generally affecting the industries in which VoiceStream or Powertel conduct their businesses; or

- the announcement or existence of the VoiceStream/Powertel merger agreement and the transactions contemplated by the VoiceStream/Powertel merger agreement.

Amendment and Restatement

The VoiceStream/Powertel merger agreement was originally entered into between VoiceStream and Powertel on August 26, 2000. On September 28, 2000, the VoiceStream/Powertel merger agreement was amended and restated for the purpose of making merger subsidiary a party to the VoiceStream/Powertel merger agreement and other technical changes.

VOICESTREAM'S AGREEMENTS WITH STOCKHOLDERS OF POWERTEL

In connection with the execution of the VoiceStream/Powertel merger agreement, VoiceStream entered into separate agreements with Powertel stockholders who, in the aggregate, had sufficient voting power as of the Powertel record date to approve the VoiceStream/Powertel merger. We summarize the material terms of these agreements below, and this summary is qualified in its entirety by reference to the text of the stockholder agreements, copies of which have been filed as exhibits to VoiceStream's and Deutsche Telekom's respective registration statements and are incorporated herein by reference.

The following Powertel stockholders and some of their affiliates have entered into stockholder agreements with VoiceStream in connection with the VoiceStream/Powertel merger:

ITC Holding Company, Inc.
SCANA Communications Holdings, Inc. Sonera Corporation
Donald W. Burton and certain limited partnerships controlled by him American Water Works Company

Agreement to Vote

Each stockholder agreement obligates the stockholder that is a party to the agreement to vote all its Powertel shares in favor of the VoiceStream/Powertel merger and the VoiceStream/Powertel merger agreement and to vote all of its Powertel shares against any alternative transaction, as defined in the VoiceStream/Powertel merger agreement and as discussed under "-- The VoiceStream/Powertel Merger Agreement -- Offers For Alternative Transactions," or the liquidation or winding up of Powertel. Each stockholder's obligation to vote in this manner applies whether or not the Powertel board of directors continues to recommend the VoiceStream/Powertel merger to the Powertel stockholders.

Transfer Restrictions

Each stockholder agreement restricts or limits the ability of the stockholder that is a party to the agreement to sell, transfer, pledge, assign or otherwise dispose of, any of its Powertel shares, or rights to purchase Powertel shares or, until six months after completion of the VoiceStream/Powertel merger, VoiceStream common shares, in each case that are subject to the stockholder agreement. The stockholders that are parties to the stockholder agreements can sell, transfer, pledge, assign or otherwise dispose of their Powertel shares or VoiceStream shares, as the case may be, in limited circumstances, with VoiceStream's written consent, as expressly permitted by the stockholder agreement, pursuant to the VoiceStream/Powertel merger agreement or pursuant to the Deutsche Telekom/Powertel merger agreement. In that regard, each stockholder agreement, other than the agreement with American Water Works Company, provides that:

- until the later of January 1, 2001 and the date of the Powertel special meeting, the stockholder may not sell, transfer, pledge, assign or otherwise dispose of, any Powertel shares or rights that are subject to the stockholder agreement;

- from the later of January 1, 2001 and the date of the Powertel special meeting, until the earlier of the completion of the VoiceStream/Powertel merger or the termination of the VoiceStream/Powertel merger agreement, the stockholder may sell or transfer up to an aggregate of 25% of the number of Powertel shares owned by such stockholder, which percentage increases commensurately to that percentage sold, subject to certain exempt transfers, by any VoiceStream stockholder who executed a VoiceStream stockholder agreement pursuant to the VoiceStream/Powertel merger agreement;

- from the completion of the VoiceStream/Powertel merger through and including the six month anniversary of the completion of the VoiceStream/Powertel merger, the stockholder may not sell, transfer, pledge, assign or otherwise dispose of, any VoiceStream common shares that are subject to the stockholder agreement except in accordance with Rule 144 and Rule 145 of the Securities Act, except that if a VoiceStream stockholder who executed a VoiceStream stockholder agreement pursuant to the VoiceStream/Powertel merger agreement proposes to transfer more than the number of shares permitted to be transferred under Rule 144, subject to certain exempt transfers, then the Powertel stockholder may transfer shares under its registration rights commensurate with that percentage sold by the VoiceStream stockholder; and

- after the six-month anniversary of the completion of the VoiceStream/Powertel merger, all contractual sale and transfer restrictions end.

For a description of the stockholder agreements executed by VoiceStream stockholders pursuant to the VoiceStream/Powertel merger agreement, see "-- Powertel's Agreements with Stockholders of VoiceStream."

Termination

Each stockholder agreement will terminate upon the earliest to occur of:

- the completion of the VoiceStream/Powertel merger;

- the termination of the VoiceStream/Powertel merger agreement; and

- August 26, 2002.

No Solicitation

Each stockholder agrees not to initiate or participate in, and not to authorize any representatives to solicit, initiate or participate in, discussions or negotiations regarding transactions or business combinations between Powertel and a company other than VoiceStream, except as otherwise permitted by the VoiceStream/Powertel merger agreement. See "-- The VoiceStream/Powertel Merger Agreement -- Offers for Alternative Transactions."

POWERTEL'S AGREEMENTS WITH STOCKHOLDERS OF VOICESTREAM

In connection with the execution of the VoiceStream/Powertel merger agreement, Powertel entered into separate agreements with VoiceStream stockholders who, in the aggregate, had sufficient voting power as of the VoiceStream record date to approve the VoiceStream/Powertel merger. In addition, Deutsche Telekom agreed in the Deutsche Telekom/Powertel merger agreement to vote in favor of the VoiceStream/Powertel merger. We summarize the material terms of these agreements below, and this summary is qualified in its entirety by reference to the text of the stockholder agreements, copies of which have been filed as exhibits to VoiceStream's and Deutsche Telekom's registration statements and are incorporated herein by reference.

Agreement to Vote

Each stockholder agreement obligates the stockholder that is a party to the agreement to vote all of its VoiceStream shares in favor of the VoiceStream/Powertel merger and the VoiceStream/Powertel merger agreement. The Deutsche Telekom/Powertel merger agreement obligates Deutsche Telekom to vote all of its VoiceStream shares in favor of the VoiceStream/Powertel merger and the VoiceStream/Powertel merger agreement. Each stockholder's obligation to vote in this manner is irrevocable and unconditional.

Transfer Restrictions

Each of the stockholder agreements and, with respect to Deutsche Telekom, the Deutsche Telekom/ Powertel merger agreement, restricts or limits the ability of the stockholder that is a party to the agreement to sell, transfer, pledge, assign or otherwise dispose of any VoiceStream shares owned by such stockholder until the later of January 1, 2001 and the date of the VoiceStream special meeting, except to affiliates and by operation of law, in each case where the transferees agree to be bound by the terms of the stockholder agreement.

Each VoiceStream stockholder who is a party to a stockholder agreement, not including Deutsche Telekom, has agreed as follows:

- from the later of January 1, 2001 and the date of the VoiceStream special meeting, until the earlier of the completion of the VoiceStream/Powertel merger or the termination of the VoiceStream/Powertel merger agreement, if a VoiceStream stockholder proposes to sell, transfer, or exercise registration rights with respect to more than 25% of the VoiceStream stockholders' shares, then the VoiceStream stockholder must notify each of the Powertel stockholders who entered into stockholder agreements with VoiceStream of the proposed sale, transfer or exercise of rights and waive any right the VoiceStream stockholder has to preclude or delay the filing of a registration statement on behalf of any of these Powertel stockholders or transfers of Powertel shares in the amount permitted by the applicable Powertel stockholder agreement; and

- for six months beginning on the closing of the VoiceStream/Powertel merger, if the VoiceStream stockholder proposes to sell, transfer, or exercise registration rights with respect to more VoiceStream shares than the VoiceStream stockholder is permitted to sell or transfer under the volume restrictions of Rule 144 of the Securities Act, the VoiceStream stockholder must notify each of the Powertel stockholders who entered into stockholder agreements with VoiceStream of the proposed sale, transfer or exercise of rights and either allow the Powertel stockholder to participate in the registration or waive any right the VoiceStream stockholder has to preclude or delay the filing of a registration statement on behalf of any of these Powertel stockholders.

Agreement to Elect a Powertel Nominee to the VoiceStream Board of Directors

Each VoiceStream stockholder that is a party to a stockholder agreement has agreed that it will vote all its VoiceStream common shares, and Deutsche Telekom has agreed in the Deutsche Telekom/Powertel merger agreement to vote all of its VoiceStream voting preferred shares at the two annual meetings of VoiceStream following the closing of the VoiceStream/Powertel merger in favor of the election to

VoiceStream's board of directors of one nominee, and successors of such nominee, chosen by Powertel and acceptable to VoiceStream. After the completion of the VoiceStream/Powertel merger, in the event a nominee or successor nominee chosen by Powertel before the VoiceStream/Powertel merger is completed is unable or unwilling to serve, two current Powertel stockholders may, by mutual agreement, name an alternate successor. Deutsche Telekom's obligation is not enforceable if it would reduce its rights to appoint directors representing 10% of VoiceStream's board of directors. To effect these voting arrangements, these VoiceStream stockholders have agreed to amend existing VoiceStream voting agreements to which they are parties. See "VoiceStream's Agreements with Stockholders of Powertel."

Termination

Each of the stockholder agreements, and the applicable provisions of the Deutsche Telekom/Powertel merger agreement, will terminate upon the earliest to occur of:

- the completion of the VoiceStream/Powertel merger;

- the termination of the VoiceStream/Powertel merger agreement; or

- August 26, 2002.

The Stockholder Agreement with Telephone & Data Systems, Inc.

In addition to the general provisions described above applying to each of the stockholder agreements, Telephone & Data Systems, Inc. and Powertel entered into a letter agreement. This agreement provides that, in the event that the board of directors of Telephone & Data Systems determines that Telephone & Data Systems is subject to the regulations of the Investment Company Act of 1940 and Telephone & Data Systems is unsuccessful in obtaining an exemption from such regulations or is not eligible for an exemption, the restrictions on Telephone & Data Systems' right to transfer VoiceStream common shares will be modified to allow it to sell the minimum number of VoiceStream common shares that would allow Telephone & Data Systems to avoid being characterized as an "investment company" under the Investment Company Act of 1940.

EXCHANGE RATES

Effective January 1, 1999, Germany and ten other member states of the European Union adopted the euro as their common currency. With the first quarter of 1999, Deutsche Telekom began publishing its consolidated financial statements in euros. Prior to January 1, 1999, Deutsche Telekom prepared its financial statements in Deutsche Marks in accordance with German GAAP. Amounts stated in euros appearing in this document for periods prior to January 1, 1999 have been translated from Deutsche Marks at the official fixed conversion rate of 1.00 EUR = DM 1.95583.

Unless otherwise stated, dollar amounts have been translated from euros at the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York on ____________, 2000. At that date, the noon buying rate for the euro was one EUR per ______ of a $1.00, which if expressed in Deutsche Marks would have been equivalent to a rate of one DM per ______ of a $1.00, translated from euros at the official fixed conversion rate. This rate may differ from the actual rates used in the preparation of Deutsche Telekom's consolidated financial statements included or incorporated by reference herein. Accordingly, dollar amounts appearing in this proxy statement/prospectus may differ from the actual dollar amounts originally translated into euros in the preparation of Deutsche Telekom's financial statements.

The following table sets forth:

- for the year 1999 and for the period from January 1, 2000 through ____________, 2000, the average, high, low and period-end noon buying rates for the euro expressed as dollars per 1.00 euro; and

- for each year in the period from 1995 through 1998, the average, high, low and period-end noon buying rates for the Deutsche Mark converted into euros at the official fixed conversion rate and expressed as dollars per 1.00 euro.

                                                                                                PERIOD-
YEAR                                                          AVERAGE(a)    HIGH       LOW        END
----                                                          ----------   -------   -------   ----------
1995........................................................   $1.3715     $1.4418   $1.2528    $1.3634
1996........................................................    1.2978      1.3626    1.2493     1.2711
1997........................................................    1.1244      1.2689    1.0398     1.0871
1998........................................................    1.1120      1.2178    1.0548     1.1733
1999........................................................    1.0588      1.1812    1.0016     1.0070
2000(through ____)..........................................

(a) The average of the noon buying rates on the last business day of each month during the relevant period.

As of ____________, 2000, the latest practicable date for which exchange rate information was available prior to the printing of this document, the exchange rate for one euro expressed in U.S. dollars was $____.

Commencing January 4, 1999, the Deutsche Telekom ordinary shares have traded on the German stock exchanges in euros. Fluctuations in the exchange rate between the euro and the dollar will affect the dollar equivalent of the euro price of the Deutsche Telekom ordinary shares on the German stock exchanges and, as a result, are likely to affect the market price of the Deutsche Telekom ADSs on the NYSE. Deutsche Telekom will declare any cash dividends in euros, and exchange rate fluctuations will affect the dollar amounts you receive if you are a holder of Deutsche Telekom ADSs on conversion of cash dividends on the ordinary shares represented by your Deutsche Telekom ADSs.

MARKET PRICE AND DIVIDEND DATA

MARKET PRICES

Deutsche Telekom

The principal trading market for Deutsche Telekom's shares is the Frankfurt Stock Exchange. The shares also trade on the other German stock exchanges in Berlin, Bremen, Dusseldorf, Hamburg, Hanover, Munich and Stuttgart and on the Tokyo Stock Exchange. Options on the shares trade on the German options exchange (Eurex Deutschland) and other exchanges. Originally, Deutsche Telekom issued all of its shares in bearer form. With effect from January 24, 2000, the shares were converted from bearer form to registered form.

From January 4, 1999, all shares on German stock exchanges have traded in euros.

The table below sets forth, for the periods indicated, the high and low closing sales prices for the Deutsche Telekom ordinary shares on the Frankfurt Stock Exchange, as reported by the Frankfurt Stock Exchange Xetra trading system, together with the high and low volumes of the DAX (Deutscher Aktienindex).

                                                   PRICE PER        PRICE PER
                                                    ORDINARY        ORDINARY
                                                     SHARE            SHARE             DAX(a)
                                                 --------------   -------------   -------------------
                                                  HIGH     LOW    HIGH     LOW      HIGH       LOW
                                                 ------   -----   -----   -----   --------   --------
                                                     EUROS             DM
YEAR ENDED DECEMBER 31, 1998
  First Quarter................................      --      --   41.65   31.19   5,114.13   4,134.64
  Second Quarter...............................      --      --   50.14   39.70   5,915.13   5,018.67
  Third Quarter................................      --      --   55.61   44.90   6,171.43   4,433.87
  Fourth Quarter...............................      --      --   55.97   43.40   5,121.48   3,896.08
YEAR ENDED DECEMBER 31, 1999
  First Quarter................................   43.45   31.35      --      --   5,443.62   4,678.72
  Second Quarter...............................   44.55   34.23      --      --   5,468.67   4,914.59
  Third Quarter................................   43.15   36.90      --      --   5,652.02   4,978.45
  Fourth Quarter...............................   71.50   38.11      --      --   6,958.14   5,124.55
YEAR ENDED DECEMBER 31, 2000
  First Quarter................................  103.50   61.00      --      --   8,064.97   6,474.92
  Second Quarter...............................   80.40   55.80      --      --   7,599.39   6,834.88
  Third Quarter................................   61.35   38.40      --      --   7,480.14   6,682.92
  Fourth Quarter (through ____)................

(a) The DAX is a weighted performance index of the shares of 30 large German corporations. The calculation of the DAX did not change upon the introduction of the euro.

The table below sets forth, for the periods indicated, the high and low closing sales prices for the Deutsche Telekom ADSs on the NYSE:

                                                                  PRICE PER
                                                                  DEUTSCHE
                                                                 TELEKOM ADS
                                                              -----------------
                                                              HIGH          LOW
                                                              ----          ---
                                                                 (U.S.$ PER
                                                                  DEUTSCHE
                                                                TELEKOM ADS)
YEAR ENDED DECEMBER 31, 1998
  First Quarter.............................................  $22 7/8       $17 1/16
  Second Quarter............................................   28 5/16       21 1/8
  Third Quarter.............................................   32            24
  Fourth Quarter............................................   33 1/2        26 1/4
YEAR ENDED DECEMBER 31, 1999
  First Quarter.............................................   47 1/8        33 1/16
  Second Quarter............................................   45 7/8        36 1/4
  Third Quarter.............................................   45 7/16       39 5/8
  Fourth Quarter............................................   71            40 3/4
YEAR ENDED DECEMBER 31, 2000
  First Quarter.............................................  100 1/4        62 5/8
  Second Quarter............................................   79 1/2        49 1/4
  Third Quarter.............................................   58 115/256    33 29/64
  Fourth Quarter (through ______, 2000).....................

YOU ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE DEUTSCHE TELEKOM

ADSs AND DEUTSCHE TELEKOM ORDINARY SHARES.

On July 21, 2000, the last trading day prior to the formal public announcement of the signing of the Deutsche Telekom/VoiceStream merger agreement, the closing sales price per Deutsche Telekom ordinary share on the Frankfurt Stock Exchange was 55.27 euros, equivalent to U.S.$51.6388 per Deutsche Telekom ordinary share, translated at the noon buying rate for July 21, 2000, and the high and low bid prices for the Deutsche Telekom ADSs as quoted on the NYSE were $52 and $50 13/16, respectively.

On August 25, 2000, the last trading day prior to the formal public announcement of the signing of the Deutsche Telekom/Powertel merger agreement, the closing sales price per Deutsche Telekom ordinary share on the Frankfurt Stock Exchange was 44.30 euros, equivalent to U.S.$39.9763 per Deutsche Telekom ordinary share, translated at the noon buying rate for August 25, 2000 per Deutsche Telekom ordinary share, and the high and low bid prices for the Deutsche Telekom ADSs as quoted on the NYSE were $40 9/16 and $40, respectively.

On ____________, 2000, the last trading day for which information was available prior to the printing of this proxy statement/prospectus, the closing sales price per Deutsche Telekom ordinary share on the Frankfurt Stock Exchange was ________ euros, equivalent to U.S.$________ per Deutsche Telekom ordinary share, translated at the noon buying rate for __________ per Deutsche Telekom ordinary share and the high and low bid prices for the Deutsche Telekom ADSs as quoted on the NYSE were $____ and $____, respectively.

The Deutsche Telekom ordinary shares are listed on the Frankfurt Stock Exchange under the symbol "DTE". Deutsche Telekom ADSs, each representing one Deutsche Telekom ordinary share, are listed on the NYSE under the symbol "DT". The depositary for the Deutsche Telekom ADSs is Citibank N.A. As of __________, 2000, the last date prior to the printing of this proxy statement/prospectus for which it was practicable to obtain information, there were ________ Deutsche Telekom ADSs outstanding, with ________ holders of record of Deutsche Telekom ADSs with addresses in the United States and ________ holders of record of ADSs with addresses outside the United States. As of __________, 2000 there were

approximately ________ registered holders of Deutsche Telekom ordinary shares including __ holders of record of Deutsche Telekom ordinary shares with addresses in the U.S.

                                                               VOICESTREAM
                                                               COMMON STOCK
                                                              --------------
                                                              HIGH       LOW
                                                              ----       ---
                                                                (U.S.$ PER
                                                                  SHARE)
YEAR ENDED DECEMBER 31, 1999(a)
  First Quarter.............................................  $ --       $--
  Second Quarter............................................    34 1/4    16 3/8
  Third Quarter.............................................    72        28 1/8
  Fourth Quarter............................................   142 5/16   57 3/4
YEAR ENDED DECEMBER 31, 2000
  First Quarter.............................................   159 5/16   97 1/2
  Second Quarter............................................   143 3/8    77 5/8
  Third Quarter.............................................   161       100 13/16
  Fourth Quarter (through ____________, 2000)...............

(a) Because VoiceStream completed its spin-off from Western Wireless during the second quarter of 1999, no trading information is available for any prior period.

On July 21, 2000, the last trading day prior to the formal public announcement of the signing of the Deutsche Telekom/VoiceStream merger agreement, the last sale price of VoiceStream common shares on Nasdaq was $149.75 per share. On August 25, 2000, the last trading day prior to the formal announcement of the signing of the VoiceStream/Powertel merger agreement, the last sale price of VoiceStream common shares on Nasdaq was $118 3/16 per share. On ____________, 2000, the last trading day for which information was available prior to the printing of this document, the last sale price of VoiceStream common shares on the Nasdaq was $____ per share.

As of __________, 2000, the last date prior to the printing of this document for which it was practicable for us to obtain this information, there were approximately ____ registered holders of VoiceStream common shares.

YOU ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE VOICESTREAM

COMMON SHARES.

                                                                     POWERTEL COMMON SHARES
                                                             --------------------------------------
                                                                  HIGH                    LOW
                                                             ---------------        ---------------
                                                                        (US$ PER SHARE)
YEAR ENDED DECEMBER 31, 1998
  First Quarter............................................       $ 25 1/16               $16 3/4
  Second Quarter...........................................         24 1/8                 15 3/4
  Third Quarter............................................         21 1/4                  9 5/8
  Fourth Quarter...........................................         16 1/4                  9 5/16

YEAR ENDED DECEMBER 31, 1999
  First Quarter............................................         17 3/4                 12 5/16
  Second Quarter...........................................         32 1/2                 13 3/8
  Third Quarter............................................         59                     28 5/8
  Fourth Quarter...........................................        105                     50 7/8

YEAR ENDED DECEMBER 31, 2000
  First Quarter............................................        104 5/8                 66 3/4
  Second Quarter...........................................         91 13/16               53 1/2
  Third Quarter............................................         97 27/64               66 1/2
  Fourth Quarter (through __________, 2000)................

On August 25, 2000, the last trading day prior to the formal public announcement of the signing of the Deutsche Telekom/Powertel merger agreement and the VoiceStream/Powertel merger agreement, the last sale price of Powertel common shares on Nasdaq was $86.63 per share. On __________, 2000, the last trading day for which information was available prior to the printing of this document, the last sale price of Powertel common stock on Nasdaq was $____ per share. The Powertel preferred shares are not traded on Nasdaq or on any U.S. national securities exchange.

As of __________, 2000, the last date prior to the printing of this document for which it was practicable for Powertel to obtain this information, there were approximately ____ registered holders of Powertel common shares.

YOU ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE POWERTEL COMMON

SHARES.

DIVIDEND DATA

Deutsche Telekom

The Deutsche Telekom ADSs and Deutsche Telekom ordinary shares issued in connection with the Deutsche Telekom/VoiceStream and Deutsche Telekom/Powertel mergers will have the same dividend rights as the other outstanding Deutsche Telekom ADSs and all other Deutsche Telekom ordinary shares. For information relevant to receipt of dividend payments by Deutsche Telekom ADS holders, see "Exchange Rates," "Description of Deutsche Telekom Ordinary Shares -- Dividends and Other Distributions" and "Description of Deutsche Telekom American Depositary Shares -- Dividends and Distributions."

The following table sets forth the annual dividends paid per Deutsche Telekom ordinary share with respect to each of the fiscal years indicated:

                                                                Dividend Paid per
                                                                Deutsche Telekom
Year Ended December 31,                                          Ordinary Share
-----------------------                                       ---------------------
                                                               DM     euro     $(a)
1996........................................................  0.60       --    0.35
1997........................................................  1.20       --    0.68
1998........................................................  1.20       --    0.64
1999........................................................    --     0.62    0.58

(a) Dividend amounts have been translated into dollars at the noon buying rate for the relevant dividend payment date, which occurred during the second quarter of the following year.

The dividend levels of past years may not be indicative of future dividends.

Shareholders determine the declaration, amount and timing of dividends in respect of each fiscal year at their annual general meeting in the following year, upon the joint recommendation of the management board and the supervisory board. As long as the Federal Republic and KfW own a majority of Deutsche Telekom's voting share capital, they will have the power to control most decisions taken at shareholders' meetings, including the approval of proposed dividend payments. We expect that, as a result of the Deutsche Telekom/VoiceStream merger and the Deutsche Telekom/Powertel merger, the Federal Republic and KfW will no longer own a majority of Deutsche Telekom's voting share capital. Deutsche Telekom may declare and pay dividends only from distributable balance sheet profit (Bilanzgewinn) of Deutsche Telekom AG, as adjusted to reflect losses or gains carried over from prior years as well as transfers to or from retained earnings. Certain reserves (Rucklagen) are required by law to be made and deducted in calculating distributable balance sheet profits available for distribution as dividends.

The payment of future dividends depends on Deutsche Telekom's earnings, its financial condition and other factors, including cash requirements, the future prospects of Deutsche Telekom and tax, regulatory and other legal considerations. Although Deutsche Telekom expects to pay annual dividends on its shares, you should not assume that any dividend will actually be paid or make any assumption about the amount that will be paid in any given year. To the extent necessary to implement Deutsche Telekom's dividend policy, Deutsche Telekom will consider drawing upon its retained earnings. Deutsche Telekom's ability to pay dividends is determined by reference to the unconsolidated financial statements of Deutsche Telekom AG, which are prepared in accordance with German GAAP. In 1999, Deutsche Telekom AG recognized gains from an intra-group sale of its shares in Sprint of approximately 8.2 billion euros, which contributed significantly to total net income of approximately 9.7 billion euros on an unconsolidated basis. In the consolidated financial statements, the net effect of this intra-group transfer was zero. Deutsche Telekom's net income on a consolidated basis was 1.3 billion euros. The portion of the unconsolidated income of Deutsche Telekom AG for 1999 that has not been allocated to dividends has been allocated to retained earnings and may be drawn upon in connection with future dividend payments. Dividends paid will be subject to German withholding tax. For further information on German withholding tax and related U.S. refund procedures, see "U.S. Federal and German Tax Consequences."

VoiceStream

VoiceStream has never declared or paid dividends on its common shares and does not anticipate paying dividends in the foreseeable future. In addition, VoiceStream has entered into certain credit agreements and indentures which contain restrictions on its ability to declare and pay dividends on its common shares. For more information on such restrictions, please refer to VoiceStream's 10-K for the fiscal year ended December 31, 1999, which is incorporated by reference into this proxy statement/prospectus.

Powertel

Powertel has never declared or paid cash dividends on its common shares and does not anticipate paying cash dividends in the foreseeable future. Powertel's Series E preferred shares and Series F preferred shares accrue a cumulative 6.5% annual dividend that is payable quarterly in Powertel common shares or cash. Powertel pays these dividends in Powertel common shares because it is prohibited from paying cash dividends due to restrictions contained in agreements governing its and its subsidiaries' indebtedness. For more information on such restrictions, please refer to Powertel's Form 10-K for the fiscal year ended December 31, 1999, which is incorporated by reference into this proxy statement/prospectus.