For opto-electronic and photo-voltaic applications of perovskites, it is essential to know the optical properties and intrinsic losses of the used materials. A systematic microscopic analysis is presented for the example of methylammonium lead iodide where density functional theory is used to calculate the electronic band structure as well as the dipole and Coulomb matrix elements. These results serve as input for a many-body quantum approach used to compute the absorption, photoluminescence, and the optical and Auger losses for a wide range of application conditions. To illustrate the theory, the excitonic properties of the material system are investigated and numerical results are presented for typical photo-voltaic operation conditions and for the elevated carrier densities needed for laser operation.