Growth opportunities

In view of the dynamic market development of fiber-optic connections, mobile internet, and cloud applications, our growth opportunities are clearly apparent: universally accessible, increasingly powerful broadband connections are enabling new and more sophisticated cloud applications. These internet-based programs for end users and companies will remain our growth drivers over the coming years – both as stand-alone products in our Applications division as well as in combination with landline and mobile access products in our Access division.

With our many years of experience as an access and applications provider, our expertise in software development, the operation of networks and data centers, marketing, sales, and customer support, as well as our strong and well-known brands, and our customer relationships with millions of private users, freelancers, and small companies in Germany and abroad, we are well placed to exploit the further market growth in our business fields.

Access division

In the Access division, our operations are pooled in the segments Consumer Access and Business Access.

Consumer Access segment

The Consumer Access segment comprises landline-based broadband products (including the respective applications, such as home networks, online storage, Smart Home, IPTV, and video-on-demand) and mobile internet products, which mainly target private users.

These internet access products are offered to our customers as subscription contracts with fixed monthly fees (and variable, volume-based charges).

With the broadband products of the 1&1 brand (especially VDSL/vectoring and fiber-optic connections), we are one of Germany’s leading suppliers.

We use 1&1 Versatel’s fiber-optic network as the transport network, and for both VDSL/vectoring connections and direct fiber-optic connections (FTTH) we use city carriers and Deutsche Telekom (mainly Layer-2) for the “last mile”.

Landline infrastructure for private customers

We are also one of the leading providers of mobile internet products in Germany.

Since December 8, 2023, 1&1 has had a fully functional mobile communications network, which is being permanently expanded. Wherever we do not yet have sufficient mobile coverage during the years of network expansion, we use national roaming. Our national roaming partnership with Vodafone started in late August. National roaming via Vodafone will be available for all 1&1 mobile customers by the end of 2025. At the same time, the national roaming advance services previously procured from Telefónica will be completely phased out. National roaming is a standard procedure when setting up new mobile networks, which enables customers to surf and make calls without interruption in areas not yet covered during the rollout phase. This is achieved by automatically using the roaming partner’s antennas in these areas.

Until our 12 million-plus customers have been fully migrated to the 1&1 mobile network, we will continue to partially use Telefónica’s mobile network as a so-called Mobile Virtual Network Operator (MVNO), in addition to MVNO capacities supplied by Vodafone. The gradual migration of our existing MVNO customers to the 1&1 mobile network began in early 2024.

Our mobile internet products are marketed via the premium brand 1&1 as well as via discount brands, such as winSIM and yourfone, which enable us to target a wide range of specific user groups in the mobile communications market.

Our brands

In addition to the operation and expansion of the 1&1 mobile network, the Consumer Access segment once again focused on adding further valuable broadband and mobile internet contracts in the fiscal year 2024.

The number of fee-based contracts in the Consumer Access segment rose by 130,000 contracts to 16.39 million in the fiscal year 2024. Whereas the number of broadband connections decreased slightly by 60,000 to 3.95 million, mobile internet contracts increased by 190,000 to 12.44 million contracts.

Development of Consumer Access contracts in the fiscal year 2024

With our strong brands, innovative products, customer-oriented services, flexible pricing policy, and our excellent value for money, we believe the Consumer Access segment is also well positioned for the future. In addition to the rollout of the 1&1 mobile communications network, we will continue to focus in particular on marketing our mobile internet products and winning high-quality customer relationships in 2025.

Business Access segment

In the Business Access segment, 1&1 Versatel offers a wide range of telecommunication products and solutions for business customers.

The core of the business model is a modern fiber-optic network with a length of over 66,000 km, 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 standardized 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 used to provide 1&1 DSL and FTTH connections and to connect antenna locations. Infrastructure services (wholesale) for national and international carriers are also provided.

Fiber-optic infrastructure for business customers

In the fiscal year 2024, the key topics in the Business Access segment were the expansion of the fiber-optic network and the addition of further sites. In total, the network was expanded from 61,566 km in the previous year to a length of 66,376 km. In 2024, the number of sites connected to the fiber-optic network increased from 25,626 to 27,797.

In 2025, the Business Access segment will continue to expand its fiber-optic network and connect further locations. In addition, the commercial customer and wholesale business is to be further developed.

The development of the German telecommunications market is of particular importance for the Access division. The industry association Bitkom forecasts that the total market is likely to grow by 1.8% (prior year: 1.0%) to € 74.3 billion in 2025.

The strongest growth in this segment is expected to come from business with telecommunications infrastructure, which is set to grow by 3.5% (prior year: -4.8%) to € 8.0 billion. Sales of end-user devices are likely to increase by 2.7% (prior year: 1.6%) to € 12.8 billion and business with telecommunications services by 1.4% (prior year: 1.8%) to € 53.5 billion.

Market forecast: telecommunications market in Germany

Source: Bitkom, January 2025

Applications division

The Applications division comprises United Internet’s activities in the segments Consumer Applications and Business Applications.

Consumer Applications segment

Applications for home users are pooled in the Consumer Applications segment. These mainly comprise Personal Information Management applications (e-mail, to-do lists, appointments, addresses), online storage (cloud), and office software.

By steadily expanding our portfolio, we have developed the GMX and WEB.DE brands – the most widely used e-mail providers for German consumers for many years now – from pure e-mail service providers into complete command centers for communication, information, and identity management.

From e-mail service to command center for communication, information, and identity management

Our consumer applications are nearly all developed in-house and run at the Group’s own data centers. The products are offered as fee-based subscriptions (pay accounts) or in the form of ad-financed free accounts. These free accounts are monetized via classic – but increasingly also via data-driven – online advertising, which is marketed by United Internet Media.

With their ad-financed applications and fee-based consumer applications, GMX and WEB.DE are primarily active in Germany, Austria, and Switzerland, where they are among the leading players.

We are driving our international expansion with mail.com. In addition to the USA, mail.com targets users in the UK, France, and Spain.

Activities in the Consumer Applications segment focused on the establishment of data-driven business models and the expansion of customer relationships in 2024. The number of pay accounts rose by 240,000 to 3.04 million in the fiscal year 2024. Due to stricter security requirements, however, ad-financed free accounts of 38.93 million were down on December 31, 2023 (39.93 million).

Development of Consumer Applications accounts in the fiscal year 2024

(1) Contract figures as of December 31, 2024 excluding 0,02 million Energy contracts (value-added subscription);
contract figures as of December 31, 2023 and September 30, 2024 excluding 0,02 million Energy contracts and 0,02 million De-Mail contracts (Premium-Mail subscription)

With its strong and specialized brands, constantly growing portfolio of cloud applications, and established business relationships with millions of home users, our Consumer Applications segment is well positioned to exploit emerging opportunities in the cloud computing market for home users, as well as in the advertising-oriented big data business.

In the fiscal year 2025, the key topics will continue to be the expansion of data-driven business models and a focus on fee-based premium products.

Business Applications segment

In the Business Applications segment, IONOS opens up online business opportunities for freelancers and SMEs, while also helping them to digitize their processes. It offers a comprehensive range of powerful applications, such as domains, websites, web hosting, servers, e-shops, group work, online storage (cloud), and office software, which can be used via subscription agreements. In addition, cloud solutions and cloud infrastructure are offered.

Our business applications are developed at in-house development centers or in cooperation with partner firms and operated at the Group’s own data centers. IONOS is also a leading global player in this segment with activities in various European countries (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 (Canada, Mexico, USA).

IONOS footprint

Our business applications are marketed to specific target groups via the brands IONOS, Arsys, Fasthosts, home.pl, InterNetX, STRATO, united-domains, and World4You. In addition, Sedo offers professional services in the field of active domain management, while we22 offers other hosting suppliers a white-label website builder for the creation of high-quality websites.

In 2024, the Business Applications segment focused on up- and cross-selling measures for existing customers as well as the acquisition of new customer relationships. The total number of fee-based contracts for business applications increased by 220,000, resulting from 60,000 new contracts in Germany and 160,000 abroad. The total number of contracts therefore rose to 9.59 million.

Development of Business Applications contracts in the fiscal year 2024

(1) Contract numbers as of December 31, 2023 and September 30, 2024 retrospectively adjusted downwards by 0,02 million contracts following a change in policy at an IONOS Group subsidiary as part of the annual financial statements as of December 31, 2024.”

With our strong and specialized brands, a steadily growing portfolio of cloud applications, and existing relationships with millions of home users, freelancers, and small businesses, we are also well positioned in our Business Applications segment. We aim to further exploit the opportunities offered by the cloud computing market for business clients – in Germany and abroad. In 2025, the segment will focus on the further expansion of business with existing customers and the acquisition of new high-quality customer relationships. It also aims to grow its cloud business in particular.

The trend toward the increasing use of cloud applications is working in favor of our Applications division – both for Consumer and Business Applications.

According to Gartner’s calculations, the global public cloud services market is expected to grow by 21.5% (prior year: 19.2%) to USD 723.4 billion in 2025. The strongest growth is expected in the areas of cloud system infrastructure services (laaS) at 24.8%, cloud application infrastructure services (PaaS) at 21.6%, and cloud application services (SaaS) at 19.2%.

Market forecast: global cloud computing

Source: Gartner Forecasts, Worldwide Public Cloud End-User Spending, November 2024

There are also good opportunities for the refinancing of free applications via advertising. After a 10.7% increase in online advertising in 2024, PricewaterhouseCoopers also expects further growth in 2025 with an increase in total market volume (mobile advertising and desktop advertising) of 9.6% to € 20.7 billion.

Market forecast: online advertising in Germany (mobile advertising & desktop advertising)

Source: PricewaterhouseCoopers, German Entertainment and Media Outlook 2024 – 2028, September 2024