Added value for Austria: a 1.03% contribution to the GDP, jobs created for 21,049 people, total investments of EUR 3.5 billion in five years, annual tax payments of EUR 850 million

The economic research institute "Economica" has carried out a survey to establish the importance of the Telekom Austria Group for Austria as a business location. The main objective of the survey was to determine the contribution that the Telekom Austria makes to value generation and job creation in the country, as well as the economic relevance of its investments. The economic effects of the company's headquarters in Austria, both on a regional and national scale, were also subject to thorough scrutiny. The results of the survey confirm that Telekom Austria is of major economic significance to Austria.

Telekom Austria generates gross value added of almost EUR 3 billion for Austria, which equates to 1% of the country's GDP or one-hundredth of each single euro generated in Austria. As opposed to the production sector, which includes a high proportion of large corporations, 90% of Telekom Austria Group's value generation chain consists mainly of small and medium enterprises. Each generated euro leads in turn to a gross value generation of a further 46 eurocents, which mainly benefits the Austrian SMEs.

A total of 9,244 people are directly employed by the company in Austria. However, as the result of indirect and induced employment effects, Telekom Austria provides over 21,000 jobs nationwide. For each person recruited by the company, a further 1.3 jobs are created or safeguarded in the country.

Investments Totaling EUR 3.5 Billion in Austria

High-performance networks play a crucial role in the future of Austria as a business location due to the immense significance of and need for information and communications technologies. The rollout of state-of-the-art, full-coverage and high-quality networks helps enhance productivity. In contrast, the lack of such infrastructure would be a major inhibitor to economic success.

For this reason, Telekom Austria invested EUR 4.8 billion in the CEE area over the past five years. Almost EUR 3.5 billion of this (72%) was in Austria alone, which accounts for 62% of total spending by the domestic telecommunications industry. Thus, Telekom Austria is the uncontested domestic leader in terms of investments compared to its rivals, stressing once again its role as a leading provider of ICT infrastructure.

Annual Tax Payments Amounting to Over EUR 850 Million

Telekom Austria's annual tax contribution to the Austrian economy, i.e. all direct, indirect or induced taxes and duties paid by Telekom Austria as a result of its business activities in the fiscal year 2013, amounted to EUR 850.2 million. However, according to the survey, this value only represents a minor part of global tax payments incurred by the company in the year under review. The income tax paid by companies integrated in the value generation process, for instance, has not been included in this evaluation.

In order to estimate the magnitude of the Telekom Austria's tax footprint in Austria, the following benchmarks provide a clear picture: Telekom Austria's global tax contribution for 2013 was slightly below the level of total spending for energy consumption (EUR 886 million) and higher than the total payments for property transfer tax (EUR 790 million).

Vienna Headquarters Strengthens Regional Economy

The strong partnership between ÖIAG and América Móvil will enable Telekom Austria to unlock the growth potential in Central and Eastern Europe, while at the same time the company's headquarters and in-house R&D center will remain in Vienna. As a result, additional investments will be made in the company's domestic state-of-the-art telecommunications infrastructure, while safeguarding currently existing jobs.

The relocation of the Group's headquarters would have considerable economic repercussions on the Austrian Federal Republic as a whole and more specifically on the Federal Capital of Vienna. In 2013 alone, the total value generation created by the Vienna headquarters amounted to EUR 700 million, with 99.7% of this directly benefitting the city of Vienna.

The relocation of Telekom Austria's headquarters would also impact the labor market, first and foremost, those jobs that are directly linked to the Vienna headquarters, which currently amount to 175. However, if - besides the company's overall economic ties and relationships and the resulting lower consumption expenses - all indirect and induced employment effects are considered, the total impact in terms of job losses, resulting from a potential relocation of the headquarters, would translate into 489 redundancies.

In addition, if Vienna loses the headquarter function, this might also cause the potential loss of taxation rights in Austria. The relocation of the company's headquarters abroad would see taxation rights, especially a considerable proportion relating to corporate tax, transferred to the country where the headquarters has been relocated, based on corresponding double taxation agreements. For Austria, this would also mean the loss of any tax earnings arising from the capital duty. For instance, payroll-related levies and duties alone potentially account for annual tax earnings of EUR 15 million and this would be lost as the result of direct, indirect and induced job losses in the domestic market.

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