1. GROUP AND COMPANY PROFILE
1.1 Business model
Founded in 1998 and based in Montabaur, Germany, United Internet AG is the parent company (hereinafter also referred to as “the Company”) of the United Internet Group.
Together with its service company United Internet Corporate Services GmbH, United Internet AG focuses mainly on centralized functions in the areas of Finance, Corporate Controlling & Accounting, Tax, Investment Management, Press Relations, Investor Relations, Legal, Corporate Governance, Compliance & Sustainability, Risk Management, Corporate Audit, HR Management, Facility Management, Procurement, and Corporate IT.
Compared to the previous year, the Group structure as of December 31, 2022 is largely unchanged from the previous year.
Operating activities in the Consumer Access segment are mainly managed by the companies Drillisch Online GmbH and 1&1 Telecom GmbH under the umbrella of 1&1 AG.
In its Business Access segment, United Internet mainly operates via 1&1 Versatel Germany GmbH, held by 1&1 Versatel GmbH.
Operating activities in the Consumer Applications segment are primarily managed via the companies 1&1 De-Mail GmbH, 1&1 Energy GmbH, 1&1 Mail & Media GmbH, 1&1 Mail & Media Inc., and United Internet Media GmbH, pooled together under 1&1 Mail & Media Applications SE.
In its Business Applications segment, United Internet is primarily active via its shares in STRATO AG and its subsidiary Cronon GmbH – held by the holding companies IONOS Group SE (formerly: IONOS TopCo SE) and IONOS Holding SE – as well as in IONOS SE and its main domestic and foreign subsidiaries. These include – in addition to the foreign subsidiaries IONOS Inc. (USA), IONOS Cloud Ltd. (UK), IONOS S.A.R.L. (France), and IONOS Cloud S.L.U. (Spain) – in particular Arsys Internet S.L.U. (Spain), Fasthosts Internet Ltd. (UK), home.pl S.A. (Poland), InterNetX GmbH, Sedo GmbH, united-domains AG, we22 GmbH (formerly: we22 AG), and World4You Internet Services GmbH (Austria).
In addition to these operating and fully consolidated subsidiaries, United Internet held a number of other investments as of December 31, 2022. These mainly consist of equity interests – held by United Internet Investments Holding AG & Co. KG – in Kublai GmbH, Frankfurt am Main (40.00%), which in turn holds 95.39% of shares in Tele Columbus AG, Berlin, and investments in the strategic partners Open-Xchange AG, Cologne (25.39%), rankingCoach International GmbH, Cologne (31.52%), uberall GmbH, Berlin (25.10%), and AWIN AG, Berlin (20.00%), as well as the investment in Stackable GmbH, Pinneberg (25.10%) held by IONOS SE .
Further details on these investments and changes in investments are provided in chapter 2.2 “Business development” under “Group investments”.
A simplified illustration of the Group structure of United Internet with its significant operating subsidiaries and investments – as of December 31, 2022 – is shown in the following chart.
With over 27 million fee-based customer contracts and more than 40 million ad-financed free accounts, United Internet is one of Europe’s leading internet specialists.
The Group’s operating business is divided into the two business divisions “Access” and “Applications”, which in turn are divided into the segments “Consumer Access” and “Business Access”, as well as “Consumer Applications” and “Business Applications”.
Consumer Access segment
The Consumer Access segment comprises mobile internet products as well as landline-based broadband products (including the respective applications, such as home networks, online storage, telephony, Smart Home, or IPTV) for private users.
These internet access products are offered as subscription contracts with fixed monthly fees (and variable, volume-based charges) and contractually fixed terms.
With its broadband products under the 1&1 brand (especially VDSL/vectoring and fiber-optic connections), United Internet is one of Germany’s leading suppliers.
The Company uses the fiber-optic network of 1&1 Versatel as the transport network for VDSL/vectoring connections and for direct fiber-optic connections (FTTH) it uses city carriers and Deutsche Telekom (mainly Layer-2) for the “last mile”. In the case of business with ADSL connections (currently being phased out), further advance service providers are used.
With its mobile internet products, United Internet is the leading Mobile Virtual Network Operator (MVNO) in Germany .
United Internet – indirectly via 1&1 AG – is the only so-called MBA MVNO (Mobile Bitstream Access / Mobile Virtual Network Operator) with long-term and guaranteed rights to up to 30% of the used network capacity of Telefónica Germany and thus extensive access to one of the largest mobile networks. In addition to its privileged access to the Telefónica network, the Company also purchases mobile advance services from Vodafone.
These purchased network services are enhanced with end-user devices of major manufacturers, as well as self-developed applications and services in order to differentiate them from competitive offerings.
The mobile internet products are marketed via the premium brand 1&1 as well as via discount brands, such as yourfone and smartmobile.de, which enable the Company to offer a comprehensive range of wireless products while also targeting specific customer groups.
As part of the planned rollout of its powerful 5G mobile communications network – and following its successful bid for two frequency blocks of 2 x 5 MHz in the 2 GHz band and five frequency blocks of 10 MHz in the 3.6 GHz band during the 5G spectrum auction in 2019 – 1&1 concluded long-term agreements in the fiscal years 2021 and 2022 and now has all key prerequisites in place to drive forward the rollout of the 1&1 mobile network and thus extend its added value in this market segment – as in the landline segment. Operations of the 1&1 mobile network were launched on December 28, 2022 with “1&1 5G at home” – a product positioned as an alternative to conventional DSL, cable internet, or fiber-optic house connections. Smartphone tariffs are set to follow in 2023 , together with the scheduled provision of national roaming by Telefónica. National roaming is a standard procedure used in the rollout of new mobile networks that enables customers to surf and make calls without interruption in areas not yet covered during the construction phase of the new network. This is achieved by automatically using the roaming partner’s antennas in these areas.
Business Access segment
In its Business Access segment, United Internet offers a wide range of telecommunication products and services for business customers via the 1&1 Versatel brand.
The core of 1&1 Versatel’s business model is the operation of a cutting-edge fiber-optic network with a length of over 55,000 km (with 9 own data centers, 35 co-locations, and over 400 own micro data centers) , which is one of the largest networks in Germany a nd is constantly being expanded.
1&1 Versatel uses this network to offer telecommunication products – from fiber-optic direct connections to tailored ICT solutions (voice, data and network solutions) – to companies and local authorities. In addition, the 1&1 fiber-optic network is offered for infrastructure services (wholesale) to national and international carriers and internet service providers (ISPs).
Consumer Applications segment
Applications for home users are pooled in the Consumer Applications segment. In particular, these applications include Personal Information Management applications (e-mail, to-do lists, appointments, addresses), and online storage (cloud) , as well as domains, website solutions tailored to consumer needs, and office software.
In the course of portfolio development over the past few years, the GMX and WEB.DE brands – the most widely used e-mail providers in Germany for many years now – have been expanded from pure e-mail service providers to complete command centers for the communication, information, and identity management needs of users.
Applications for home users are nearly all developed in-house and operated at the Group’s own data centers.
The products are offered as fee-based subscriptions (pay accounts) or – for free – in the form of ad-financed accounts (free accounts). These free accounts are monetized via classic – but increasingly also via data-driven – online advertising, which is marketed by United Internet Media.
United Internet markets its ad-financed applications and fee-based consumer applications via the GMX and WEB.DE brands primarily in Germany, Austria, and Switzerland, where it is among the leading players.
Since the acquisition of the US provider mail.com, United Internet has also been driving its international expansion in this segment. In addition to the USA, mail.com targets other countries, such as the UK, France, and Spain.
Business Applications segment
In the Business Applications segment, United Internet opens up online business opportunities for freelancers and SMEs, helping them digitize their processes. This involves offering a broad range of products, such as domains, websites, web hosting, servers and e-shops, group work, online storage (cloud), and office software, which customers can use via subscription agreements. In addition, cloud solutions and cloud infrastructure are offered.
The applications are developed at in-house development centers or in cooperation with partner firms and operated on over 100,000 servers at 11 own data centers and 21 co-locations .
In its Business Applications segment, United Internet is also a leading global player with activities in Europe (Germany, France, the UK, Spain, Portugal, Italy, the Netherlands, Austria, Poland, Hungary, Romania, Bulgaria, Czech Republic, Slovakia, and Sweden) as well as in North America (the USA, Canada, Mexico).
Business applications are marketed to specific target groups via differently positioned brands, such as IONOS, Arsys, Fasthosts, home.pl, InterNetX, Strato, united-domains, and World4You. In its after-market business, United Internet also offers customers professional services in the field of active domain management. Moreover, other hosting suppliers are offered a white-label website builder for the creation of high-quality websites via the we22 brand.
Divisions, segments and brands (as of: December 31, 2022)
The Management Board of United Internet AG comprised the following members in the fiscal year 2022:
Management Board members as at December 31, 2022
- Ralph Dommermuth, founder and Chief Executive Officer
(with the Company since 1988)
- Martin Mildner, Chief Financial Officer
(with the Company since October 1, 2020)
The Supervisory Board of United Internet AG comprised the following members in the fiscal year 2022:
Supervisory Board members as at December 31, 2022
- Philipp von Bismarck, Chairman
(member since July 2020; Chairman since May 2021; member of the Audit and Risk Committee since May 2021)
- Dr. Manuel Cubero del Castillo-Olivares, Deputy Chairman
(member since May 2020; Deputy Chairman since May 2021)
- Stefan Rasch
(member since May 2021; member of the Audit and Risk Committee since May 2021)
- Prof. Dr. Andreas Söffing
(member since May 2021; Chairman of the Audit and Risk Committee since May 2021)
- Prof. Dr. Yasmin Mei-Yee Weiß
(member since July 2020)
Departed in the fiscal year 2022
- Dr. Claudia Borgas-Herold
(member from May 2020 to August 2022)
Main markets and competitive standing
Germany is the most important sales market of the United Internet Group by far and accounted for around 89% of total global sales in the fiscal year 2022.
Besides Germany, the Group’s most important sales markets are
- the USA,
- the UK,
- Poland, and
Competitive standing in the Consumer Access segment
Following the merger with Drillisch AG (now 1&1 AG) in 2017, United Internet is the fourth force in Germany’s telecommunications market with landline and mobile products in its purely domestic Consumer Access segment – based on customer contracts and sales revenues – after Deutsche Telekom, Vodafone, and Telefónica Germany.
Competitive standing in the Business Access segment
United Internet is also a leading company in its Business Access segment, whose operations are also limited to Germany. With the fiber-optic network of 1&1 Versatel spanning over 55,000 km, United Internet operates one of Germany’s largest fiber-optic networks.
Competitive standing in the Consumer Applications segment
In its Consumer Applications segment, United Internet operates in Germany, Switzerland, and Austria via the GMX and WEB.DE brands, as well as in countries such as the USA, UK, France, and Spain via the international brand mail.com. United Internet is the leading provider of e-mail services and one of the leaders in cloud services in its domestic German market – based on the number of users.
Competitive standing in the Business Applications segment
In the globally aligned Business Applications segment, United Internet is active in a total of 18 countries with its hosting and cloud applications. The Company has long been the market leader in the German hosting business – based on the number of managed country domains – and strengthened its position in 2017 with the takeover of its competitor STRATO. In other European countries, United Internet’s hosting applications are now available in all major markets – either locally or from Germany. In addition to the domestic German market, these mainly include the major European economies of France, the UK, Italy, Poland, and Spain. With the exception of Italy, the Company is among the market leaders – measured by the number of managed country domains – in the aforementioned countries. All in all, therefore, United Internet is also one of the leading European suppliers of hosting applications – based on the number of managed country domains. Further target markets outside Europe are the North American countries Canada, USA, and Mexico. In the most important of these markets, the USA, United Internet is also one of the leading players in this segment – based on the number of managed country domains.
From a global perspective, United Internet is thus also one of the leading companies in the hosting business.
As of December 31, 2022, the United Internet Group employed a total of 10,474 people at around 40 domestic and foreign facilities.
Main locations (by headcount; > 50 employees)
1&1 Mail & Media Applications
IONOS, Strato, we22
Cebu City (Philippines)
Madrid / Logroño / Barcelona / Lugo (Spain)
1&1 Mail & Media Applications
Chesterbrook / Lenexa (USA)
Frankfurt am Main
Linz / Vienna (Austria)