2. ECONOMIC REPORT
2.1 General economic and sector conditions
General economic development
In its latest economic outlook (World Economic Outlook, Update January 2026), the International Monetary Fund (IMF) reported growth of 3.3% for the global economy in 2025, based on preliminary calculations. Growth was thus exactly on a par with the prior-year level (3.3%).
In the United Internet Group’s target markets in North America, the IMF anticipates noticeable growth for 2025 – but at a lower level than in the previous year. The IMF calculated growth of 2.1% for the USA (prior year: 2.8%), of 1.6% for Canada (prior year: 2.0%), and of 0.6% for Mexico (prior year: 1.4%).
The situation for United Internet’s most important target markets in Europe is as follows: the IMF anticipates growth of 0.8% for France in 2025 (prior year: 1.1%), of 2.9% for Spain (prior year: 3.5%), of 0.5% for Italy (prior year: 0.7%), and of 3.3% for Poland (prior year: 3.0%). Growth of 1.4% (prior year: 1.1%) is forecast for the UK .
With regard to Germany – United Internet’s most important market by far (sales share 2025: around 90%) – the IMF expects economic output to rise again for the first time in 2025, by 0.2% (previous year: -0.5%).
Multi-period overview: GDP trend in United Internet’s key target countries and regions
World
6.2%
3.5%
3.3%
+/-0.0%-points
USA
5.9%
1.9%
2.9%
2.8%
2.1%
–0.7%-points
Canada
5.0%
3.8%
1.5%
2.0%
1.6%
–0.4%-points
Mexico
4.7%
3.9%
1.4%
0.6%
–0.8%-points
France
6.8%
2.5%
1.1%
0.8%
–0.3%-points
Spain
5.5%
5.8%
2.7%
+0.4%-points
Italy
6.7%
3.7%
0.7%
0.5%
–0.2%-points
Poland
6.9%
5.3%
0.1%
3.0%
–0.6%-points
UK
7.6%
4.3%
0.3%
Germany
2.6%
1.8%
–0.3%
–0.5%
0.2%
+0.7%-points
2021
2022
2023
2024
2025
YoY change
Source: International Monetary Fund, World Economic Outlook (Update), January 2026
The IMF’s calculations for Germany are in line with the preliminary figures of the country’s Federal Statistical Office (Destatis), which – at its “GDP 2025” press conference on January 15, 2026 – also announced a slight increase in (price-adjusted) gross domestic product (GDP) of 0.2% for 2025 (prior year: -0.5%) for the first time since 2022 (+1.8%).
According to the Federal Statistical Office, this slight growth is primarily attributable to increased consumer spending by private households and the government. Exports, on the other hand, declined again as the export industry faced “strong headwinds” from higher US tariffs, the appreciation of the euro, and stronger competition from China. Moreover, investment remained weak. Investment in both equipment and construction was lower than in the previous year.
Multi-period overview: development of price-adjusted GDP in Germany
GDP
–0.9%
Source: Destatis, January 2026
While many industries are struggling with weak demand, the digital economy is proving robust. Despite the current challenging economic environment, the digital sector association Bitkom expects the German market for IT and telecommunications (ICT) to grow by 3.9% (prior year: 4.8%) to € 234.8 billion in 2025.
The increase in the overall ICT market resulted in particular from growth in sales of information technology. According to Bitkom’s 2025 forecast, sales in this largest submarket rose by 5.3 % (prior year: 6.4%) to € 160.6 billion. All segments of this sub-market made good progress: software (which also includes AI platforms, collaboration tools, and cloud services) grew by 9.4% (prior year: 13.9%), IT hardware by 3.8% (prior year: 3.2%), and IT services by 2.9% (prior year: 3.5%).
The most important ICT markets for United Internet’s business model are the German telecommunications market in its mostly subscription-financed Access division, as well as the global web hosting and cloud market, and the German online advertising market for its subscription- and ad-financed Applications division.
Telecommunications market in Germany
For the ICT submarket of telecommunications, the industry association Bitkom expects an increase of 1.2 % (prior year: 1.4%) to € 74.2 billion in 2025. The individual segments of the German telecommunications market are developing quite differently: for example, sales of infrastructure grew by 6.6% (prior year: -6.3%) and telecommunications services by 1.4% (prior year: 1.7%), while sales of end-user devices fell by -2.6% (prior year: 5.8%).
Key market figures: telecommunications market in Germany
Telecommunication revenues
74.2
73.3
+ 1.2%
in € billion
Change
Source: Bitkom, January 2026
According to the study “German Entertainment and Media Outlook 2025 - 2029” (June 2025), the auditing and consultancy firm PricewaterhouseCoopers (PwC) expects service revenues – of particular importance for United Internet – to increase by 4.1% to € 34.2 billion in 2025. Service revenues in the mobile telecommunications segment are expected to grow by 5.8% to € 19.4 billion and service revenues in the broadband segment by 2.0% to € 14.8 billion.
According to PwC, the number of mobile phone contracts will grow by 3.7% to 191.9 million in 2025. This growth results from an increase of 47.9% in 5G contracts to 75.5 million, while contracts for lower data rates declined significantly.
PwC expects that the number of landline broadband connections rose by 1.2% to 39.3 million in 2025. At the same time, a decrease is forecast for the number of DSL connections (-7.3% to around 21.5 million) and the number of cable connections (-1.4% to around 8.3 million), while an increase of 35.5% to around 8.2 million is expected for fiber-optic connections.
According to the market report “Web Hosting Services Market Size, Share & Industry Analysis” published by Fortune Business Insights, global sales of web hosting services are expected to grow by 18.1% to around USD 149.3 billion in the fiscal year 2025. The report specifically covers revenues in the areas of shared hosting, dedicated hosting, co-located hosting, virtual private server hosting, managed hosting, and self-managed hosting.
Geographically, North America dominates the global market with a share of 41%, followed by Europe. The fastest growing market, however, is Asia/Pacific.
Key market figures: global w eb hosting services
Sales of global Web Hosting Services
149.30
126.41
+ 18.1%
in $ billion
Source: Fortune Business Insights; Web Hosting Services Market Size, Share & Industry Analysis, Update December 2025
There was further dynamic growth for the cloud services market in 2025. According to the market report “Cloud Computing Market Size,” Precedence Research expects further global growth for cloud services of 21.2% to around USD 912.8 billion in 2025. The share of pure private cloud services for companies and public authorities, for example, is expected to remain unchanged at around 47%, while the share of public cloud services, which are provided to a large number of customers simultaneously and with hybrid use, is expected to be around 53%.
Geographically, North America also dominates the global cloud services market with a share of 39%, followed by Europe with 25%. The Asia/Pacific region is also the fastest-growing market for cloud services, with a market share of 21%.
Software-as-a-service (SaaS) accounts for the largest share of global service revenue, at around 55%.
Key market figures: global cloud services
Global sales of cloud services
912.77
753.11
+ 21.2%
thereof Private Cloud
429.00
353.96
thereof Public Cloud (incl. Hybrid)
483.77
399.15
Source: Precedence Research; Cloud Computing Market Size, Share, and Growth Forecast, Update October 2025
In its study “German Entertainment and Media Outlook 2025 - 2029” (June 2025), the auditing and consultancy company PricewaterhouseCoopers (PwC) forecasts an increase in total revenues (paid search, display, video, affiliate/classifieds) of the German online advertising market (mobile advertising and desktop advertising) of 10.6% to around € 21.5 billion in total for 2025 – following growth of 14.7% in 2024.
Key market figures: total online advertising market in Germany – acc. to PWC
Online advertising revenues
21.45
19.40
+ 10.6%
Source: PricewaterhouseCoopers, German Entertainment and Media Outlook 2025 – 2029, June 2025
The Online Marketing Group (OVK) of the German Association for the Digital Economy (BVDW) broadly shares PwC’s assessment of the situation in the German online advertising market. The OVK only takes net revenues into account in its market figures and focuses exclusively on the most important sub-market for United Internet, the display and video advertising market (mobile and desktop) – whereby the United Internet brands GMX and WEB.DE still generate most of their revenue in the display advertising market and only a small portion in the video advertising market.
Based on its updated forecast in September 2025 – as part of its OVK Report 2025/02 – the OVK expects net revenues in the display and video advertising market to rise to around € 7.5 billion in 2025. This represents an increase of 8.5%, following growth of 12.8% in the previous year. The OVK attributes this slower year-on-year market growth in particular to geopolitical and macroeconomic uncertainties, which advertisers responded to in part with short-term and tactical booking behavior.
The aforementioned growth of 8.5% is primarily attributable to the video advertising market, which is expected to grow by 16.6% to € 3.65 billion. By contrast, the display advertising market is only expected to grow by 1.6% to € 3.81 billion.
Key market figures: display and video advertising market in Germany – acc. to OVK
Display and video advertising revenues
7.46
6.88
+ 8.5%
thereof Video
3.65
3.13
+ 16.6%
thereof Display
3.81
3.75
+ 1.6%
Source: Online-Vermarkterkreis (OVK), OVK-Report 2025/02, September 2025
The legal parameters for United Internet’s business activities remained largely unchanged from the previous year in 2025 and had no significant influence on the development of the United Internet Group.
Federal Network Agency decision on low- and mid-band spectrum
On March 24, 2025 , the German Federal Network Agency (“Bundesnetzagentur“ - BNetzA) announced its decision regarding the allocation of low- and mid-band spectrum that will become available from January 2026. The decision is largely based on the consultation draft published in May 2024 and provides for an extension of existing spectrum usage rights for Deutsche Telekom, Vodafone, and Telefónica. The extension is subject to the obligation that Telefónica continues to make 2*10 MHz of its 2.6 GHz spectrum available to 1&1 for shared use, and that Deutsche Telekom, Vodafone, and Telefónica make part of their available low-band spectrum available to 1&1 for shared use. To achieve this, the authority obliged the established network operators to conduct fair negotiations with 1&1. If 1&1 has not been granted the use of low-band spectrum by 1 January 2026, the Federal Network Agency reserves the right to enforce such use. Negotiations between 1&1 and the other mobile network operators on the cooperative, shared use of equivalent spectrum below 1 GHz have so far been unsuccessful. On February 17, 2026, the Federal Network Agency therefore initiated a written hearing regarding an order for the cooperative, shared use of low-band spectrum in the expansion areas of 1&1 Mobilfunk GmbH. The hearing of the mobile network operators will end on March 18, 2026.
Exit of Warburg Pincus from IONOS
On March 27, 2025 , Warburg Pincus sold its entire stake in IONOS Group SE (shareholding as of December 31, 2024: 16.2%). Among other things, the exit resulted in total conditional purchase price payments of € 45.0 million from Warburg Pincus to United Internet and € 34.0 million from IONOS to Deutsche Telekom from the acquisition of STRATO AG in 2017. Moreover, in connection with the exit of Warburg Pincus, further purchase price adjustments from the repurchase in 2021 amounting to € 9.9 million became due, which were recognized in equity without affecting earnings.
Purchase of 4.4 million 1&1 shares
In early April 2025 , United Internet AG purchased a total of 4.4 million shares of Group subsidiary 1&1 AG. The purchase price amounted to around € 60.8 million. As a result of the purchase, United Internet AG’s stake in 1&1 AG increased from 78.32% to 80.81% of capital stock.
Preliminary legal assessment of the Federal Cartel Office regarding the failure to provide antenna locations for 1&1
On April 11, 2025 , the German Federal Cartel Office published its preliminary legal assessment regarding Vodafone and Vantage Towers’ failure to provide antenna locations for 1&1. In its assessment, the Federal Cartel Office deemed the delayed provision of contractually agreed locations to be a violation of antitrust law, hindering 1&1’s entry into the market as a fourth network operator. In late 2021, Vantage Towers entered into a contractual agreement with 1&1 regarding the shared use of a four-digit number of antenna locations, to be implemented in several tranches by the end of 2025. The dates for the agreed provision targets were then contractually postponed by one year.
However, the provision of the locations promised to 1&1 has been significantly delayed since the agreement was signed. Vodafone and Vantage Towers subsequently had the opportunity to respond to the Federal Cartel Office’s assessment. The Federal Cartel Office has still not made a final decision.
Public tender offer for 1&1 shares
Following an announcement on May 16, 2025, United Internet published the offer document on June 5, 2025 for its voluntary public tender offer in the form of a partial offer (cash offer) to the shareholders of 1&1 AG to acquire up to 16,250,827 no-par value bearer shares of 1&1 (corresponding to approximately up to 9.19% of capital stock), each with a notional value of € 1.10, against payment of a consideration of € 18.50 per 1&1 share. The offer of € 18.50 per 1&1 share represented a premium of approximately 20% over the closing price in XETRA trading and approximately 29% over the volume-weighted 3-month average price (XETRA) as of May 15, 2025. United Internet thus offered all shareholders of 1&1 AG, including those with larger holdings, an attractive opportunity to obtain liquidity at a significant premium.
The aim of United Internet’s public tender offer was to further expand its existing 80.81% stake in 1&1 and consolidate its voting majority. A clear and stable shareholder structure is particularly important in view of the investments planned for the expansion of the 1&1 mobile network over the coming years. At the same time, an appropriate free float portion is to be maintained.
The deadline for accepting the offer was July 3, 2025, 24:00 CET. A total of 7,585,033 1&1 shares were offered to United Internet as part of the voluntary public tender offer (corresponding to approximately 4.29% of capital stock). The resulting acquisition price amounted to € 140.3 million and was paid in July 2025. As a result, United Internet’s shareholding increased from 80.81% in July 2025 to 85.10% of 1&1 AG’s capital stock.
Purchase of further 2.4 million 1&1 shares
In late August 2025 , United Internet purchased a further 2.4 million shares of 1&1 AG. The purchase price amounted to around € 44.9 million. As a result of the purchase, United Internet AG’s stake in 1&1 AG increased from 85.10% to 86.46% of capital stock.
United Internet sells 1&1 Versatel to 1&1 AG
In November 2025 , United Internet and 1&1 AG (United Internet share: 86.46%) agreed on an intra-group sale of United Internet Management Holding SE (United Internet share: 100%), including its wholly owned subsidiary 1&1 Versatel GmbH (together: 1&1 Versatel), to 1&1 AG.
The economically agreed purchase price amounts to approximately € 1.3 billion. In addition, 1&1 AG will pay compensation of € 246 million in connection with the transaction. The background to this is that the transaction led to an impairment of the investment in 1&1 Versatel at United Internet Management Holding SE to the lower fair value . The resulting loss was to be borne by United Internet AG due to the existing profit and loss transfer agreement (loss assumption pursuant to section 302 AktG) and was offset in January 2026 by a payment from United Internet AG to United Internet Management Holding SE. The compensation amount is repaid outside of the purchase price fulfillment; technically, it is attributed to the acquisition costs. The total acquisition costs for 1&1 thus amount to € 1,546 million.
1&1 AG acquired 1&1 Versatel with all its assets, in particular network infrastructure and debts, including € 950 million in loan liabilities to United Internet. This loan remaining with 1&1 Versatel was secured by a guarantee of 1&1 AG in the course of the sale.
The purchase price claim was settled by offsetting it against counterclaims from a cash management credit balance of € 650 million, as well as by granting a shareholder loan from United Internet AG to 1&1 AG also amounting to € 650 million. In addition, the compensation amount for the loss assumption was repaid. Taken together, these mutual payments offset each other, meaning that United Internet did not receive any cash from the transaction.
Depending on the future business performance of 1&1 Versatel in the years 2027, 2028, and 2029, the purchase price may increase or decrease by up to € 300 million. Any adjustment amount would be due in 2030.
As a result of the intra-group restructuring and the sale of 1&1 Versatel to 1&1, United Internet has pooled its activities and expertise in the telecommunications business under the umbrella of 1&1 AG.
The sale of the shares had economic effect as of the end of November 30, 2025.
1&1 fulfills requirements of German Federal Network Agency
Just two years after launching its mobile services on Germany’s fourth mobile network, 1&1 AG achieved coverage of 27 percent of German households in December 2025 . As a result, 1&1 met the first coverage target of 25 percent set for the company by the German Federal Network Agency during the 5G spectrum auction on schedule (deadline: December 31, 2025).
In November 2025 , 1&1 had already fulfilled the Federal Network Agency's requirement for “competitive independence” ahead of schedule by completing the migration to the 1&1 mobile network of all existing customers previously supplied on the basis of wholesale contracts.
There were no other significant events in fiscal 2025 which had a material effect on the development of business.
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