27 Depreciation, amortization and impairment losses

The following table provides a breakdown of depreciation, amortization and impairment losses:

Impairment losses break down as follows:

Depreciation, amortization and impairment losses on intangible assets, property, plant and equipment, and right-of-use assets increased by EUR 0.5 billion year-on-year to EUR 27.6 billion.

Depreciation and amortization decreased by EUR 0.3 billion to EUR 26.5 billion. In the Group Development operating segment, depreciation and amortization were down on the prior-year level in connection with the fact that T‑Mobile Netherlands had been held for sale until it was sold and accordingly the related depreciation and amortization had been suspended, and in connection with its subsequent sale. Depreciation on property, plant and equipment in the United States operating segment declined due to the ongoing strategic withdrawal from the terminal equipment lease business. By contrast, in the United States operating segment, a reduction in the useful life of leased network technology for cell sites following the business combination of T‑Mobile US and Sprint increased depreciation of the corresponding right-of-use assets by EUR 1.6 billion. The agreement concluded between T‑Mobile US and Crown Castle on a modification of existing arrangements, mainly concerning the lease of Crown Castle’s cell sites, also had an increasing effect on depreciation and amortization.

Impairment losses, by contrast, increased by EUR 0.9 billion to EUR 1.2 billion, of which EUR 0.9 billion related to the United States operating segment, mainly in connection with assets of the former Sprint’s fiber-optic-based fixed network. These impairment losses arose in part in connection with the sale of the business agreed in September 2022. Further impairment losses of EUR 0.1 billion related to the Systems Solutions operating segment and the Group Headquarters & Group Services segment. These related to follow-up investments in connection with assets previously impaired in the 2020 and 2021 financial years. Furthermore, despite the business outlook remaining positive, the substantial increase in the cost of capital in the reporting year prompted further impairment losses to be recognized on non-current assets at the end of 2022. In addition, impairment losses of EUR 0.1 billion related to the Europe operating segment in connection with non-current assets in the Romanian fixed-network business. The Romanian national company continues to operate in the structurally challenging and highly competitive Romanian market at prices that are low compared with other countries. In addition, high energy prices and sharp rises in interest rates had a negative impact on the enterprise value. The impairment losses recognized in the prior year amounted to EUR 0.3 billion and related primarily to the Systems Solutions operating segment and the Group Headquarters & Group Services segment.

For further information, please refer to Notes 6 “Intangible assets,” 7 “Property, plant and equipment,” and 8 “Right-of-use assets – lessee relationships.”