Business Model, Strategy, and Value Chain

Our Business

United   Internet is a leading European Internet specialist with roughly 29 million fee-based customer contracts and roughly 39 million ad-financed free accounts.

The Group’s operating business is broken down into the Access Division, which comprises the Consumer Access and Business Access segments, and the Applications Division, which consists of the Consumer Applications and Business Applications segments.

Grafik 1

Consumer Access Segment

The Consumer Access Segment pools fixed-network broadband products (including associated applications such as home networking, online storage, smart home, IPTV, and video on demand) and mobile internet products for consumers. Customers are offered these internet access products on the basis of fixed monthly subscriptions (plus variable, usage-driven top-up fees).

United   Internet’s Consumer Access Segment is one of Germany’s leading providers of broadband products (and particularly VDSL/vectoring and fiber-optic connections). The segment uses the Business Access Segment’s fiber-optic network as a transportation network, accessing the last mile via city carriers and Deutsche Telekom (primarily Layer 2) in the case of VDSL/vectoring and direct fiber-optic connections (“FTTH” = “fiber to the home”).

United   Internet is one of Germany’s leading providers of mobile internet products . The segment has a fully functional mobile network that is being permanently expanded. The segment uses national roaming wherever it cannot yet offer adequate network coverage during the network expansion years. A national roaming partnership with Vodafone started at the end of August 2024. By the end of 2025, national roaming with Vodafone will be available for all of the segment’s mobile customers. In parallel, the wholesale national roaming services that were previously sourced from Telefónica are being phased out completely.

Until the over 12 million customer contracts have been migrated in full to its own mobile network,   the segment will also partly use the mobile network of Telef ó nica as a so-called Mobile Virtual Network Operator (MVNO) as well as MVNO capacities from Vodafone. Existing MVNO customers are being successively migrated to the segment’s mobile network, a process that started at the beginning of fiscal year 2024. The migration is scheduled to be completed at the end of 2025.

The segment’s mobile internet products are marketed via the Company’s premium 1&1 brand and discount brands such as winSIM and yourfone, allowing it to offer the mobile communications market a comprehensive range of products and to address specific target groups.

Business Access Segment

United   Internet’s Business Access Segment offers business customers a broad range of telecommunications products and solutions. The business model revolves around its operation of a modern fiber-optic network, which is more than 66,000   km long. This is one of the largest networks in Germany and is being continuously expanded. The segment uses the network to offer companies and public authorities telecommunications products ranging from standardized direct fiber-optic connections to customized, individual telecommunications solutions (voice, data, and network solutions). In addition, the segment’s fiber-optic network is used to provide 1&1 DSL and FTTH connections and to connect antenna locations. In addition, (wholesale) infrastructure services are provided for national and international carriers.

Consumer Applications Segment

The Consumer Applications Segment is home to United Internet’s consumer applications. These primarily include personal information management applications (e-mails, to-do lists, and appointment/address management solutions), online (cloud) storage, and office applications. The portfolio has been successively expanded, and the Company’s GMX and WEB.DE brands – which have been the largest consumer e-mail providers in Germany for many years – have been transformed in recent years into end-to-end hubs for user communications, information, and identity management.

The consumer applications are largely developed in-house and operated in the Group’s own data centers. The products are offered as pay accounts or ad-financed free accounts. The latter are monetized using classic and increasingly also programmatic (i.e., data-driven) online advertising. Marketing is conducted by United   Internet Media, a Group company. The segment is primarily active in Germany, Austria, and Switzerland with its ad-financed and fee-based consumer applications, and is one of the leading providers in the sector. The Company’s mail.com brand internationalizes the business in the U.S.A., the United Kingdom, France, and Spain, among other places.

Business Applications Segment

United   Internet’s Business Applications Segment provides freelancers, self-employed professionals, and SMEs with internet-based business opportunities and helps them digitalize their processes. It does this by offering a wide range of high-performance applications such as domains, home pages, web hosting, servers, e-shops, group work, online storage (cloud storage), and office applications on a subscription basis. Cloud solutions and cloud infrastructure services are also offered. The applications are developed in the segment’s own development centers or in cooperation with partner organizations.

The segment is also one of the leading players in the sector at an international level, with activities in a number of European countries (Germany, France, the United Kingdom, Spain, Portugal, Italy, the Netherlands, Austria, Poland, Hungary, Romania, Bulgaria, the Czech Republic, Slovakia, and Sweden) and North America (the U.S.A., Canada, and Mexico). The business applications are marketed to their specific target groups using the following Company brands: IONOS, Arsys, Fasthosts, home.pl, InterNetX, STRATO, united-domains, and World4You. In addition, the Sedo brand offers professional active domain management services, while the we22 brand supplies other hosting providers with a white-label website builder for creating high-end websites.