BT Tower


Deutsche Telekomwatch
This release
: #78
December 2018: 56pp
Releases/year: 10+
Click for more details of this release

Executive brief

Management update

Q3 FY18: Bullish DT seeks to leave struggling peers in dust [p.6]

  • Made in America, but Europe starting to get involved upstream
  • Table: Deutsche Telekom, financial summary, Q3 FY18
  • Figure: DT net debt development, FY14-FY18 (EURbn)
  • Another uprating in earnings
  • Table: Deutsche Telekom, Europe area revenue by territory (adjusted), Q3 FY18
  • The costs of aggression

Group

Deals: FT hints at BT-DT deal on the QT [p.12]

  • BT down the list of DT global domination plans…

DT doesn't dance to EC tune in the Netherlands

People [p.15]

  • Table: People movement highlights
  • Partner/supplier people movement highlights

Group Development: Comfortcharge makes low-powered debut [p.19]

  • DT seeks to socket to them

Technology & Innovation: 5G tests at Hamburg port going swimmingly [p.21]

  • Group ties with Airbus to explore inflight media-sharing

Germany

Strategy: Höttges: no progress in United Internet talks [p.26]

  • Friends could be re-United, but only after 5G squabble is patched up

Network: TDE turns to Facebook for 'advanced' network planning [p.30]

  • Facebook digs deeper into ecosystem mix
  • Pole dancing in Berlin

Supply chain: DT ties with Huawei under scrutiny in Germany [p.33]

  • We've got it covered, says Höttges
  • Security Innovation Lab opened up

Systems Solutions

Legal and regulatory: T-Sys SA ends court battle with state-owned Transnet [p.36]

  • Disengagement begins

Operations: T-Sys lands in Indonesia [p.38]

  • Optimisation elsewhere

USA

Deals: 'America First' noises get louder against TMUS-Sprint [p.41]

  • Protection or protectionism?
  • Legere sanguine, Son edgy
  • TMUS extends Sprint ties to PCS spectrum
  • Closer -- merger, or no merger

Partnerships: TMUS readies Un-Bank launch [p.47]

Products and services: TMUS ties success of '5G TV' to Sprint merger [p.48]

  • TV on standby

TMUS updates call-blocking services

  • TMUS first to adopt new STIR/SHAKEN standards

Further reading

Index

A

AAA 37
ADC 36, 37
Africa
 - South Africa 53
  --  Black Economic Empowerment (BEE) 37
Algorithms 31
Alphabet
 - Google 17
  -- Android 51
Amdocs 17
Americas
 - Brazil 17, 38
 - United States of America (USA) 6, 8, 17, 23, 24, 33, 34, 40, 42, 43, 46, 49, 51, 53
  --  Commerce Department 43
  --  Department of Justice (DoJ) 42
  --  Federal Communications Commission (FCC) 42, 43, 49, 51
  --  government 51
  --  Securities & Exchange Commission (SEC) 45, 47, 53
  --  States
    ---   Kansas 46
    ---   New York 43, 46
    ---   Washington 46, 49
Apple
 - iOS 51
 - iPhone 43
Asia-Pacific
 - Australia 33, 34, 39, 53
 - China 33, 34, 42, 43, 53
  --  Government 34
    ---  Beijing 34
 - India 17
 - Indonesia 38, 39, 53
 - Japan 38, 42, 43
 - Singapore 38
Atos 22
AT&T 42, 51

B

BMW 20
British Standards Institute (BSI) 34
BT Group 12, 13
 - Openreach 12

C

Choice (Australia) 41, 42
Cisco Systems 18
Comcast Corp. 9, 51
 - NBCUniversal, LLC
CNBC 53
Committee on Foreign Investment in the United States 42
Covata 39
CTIA 51

D

Daimler AG 20
Deutsche Bahn 24
Deutsche Telekom 6, 7, 8, 9, 10, 12, 13, 14, 16, 17, 18, 19, 20, 21, 22, 23, 24, 26, 27, 28, 31, 32, 33, 34, 38, 39, 42, 43, 45, 46, 48, 49, 50, 51, 52
 - Corporate
  -- Headquarters 6, 19, 20, 24, 32, 33, 34, 53
 - Deutsche Telekom Capital Partners
  --  Telekom Innovation Pool 20
   ---   Comfortcharge 19, 20
 - Europe
  -- Austria 10
  -- Croatia (Hrvatski Telekom) 16
  -- Hungary (see Magyar Telekom) 16
  -- Netherlands 10, 14
  -- Poland (Polska Telefonia Cyfrowa/PTC) 17
 - European Aviation Network 24
 - Executives
  --  Andrasi, Judit 16
  --  Blankenburg, Dido 27
  --  Dannenfeldt, Thomas 7
  --  Gievska, Slobodanka 16
  --  Gopalan, Srini 10
  --  Höttges, Timotheus 6, 13, 14, 26, 34
  --  Illek, Christian 7
  --  Jacobfeuerborn, Bruno 20, 52
  --  Kaymer, Ingo 17
  --  Legere, John 43, 46
  --  Molefe, Dineo 37
  --  Pohlink, Claudia 16
  --  Pruchnow, Johannes 27
  --  Schumann, Sebastian 16
  --  Sievert, Mike 48
  --  Wössner, Dirk 9
 - Ex-executives
  --  Munhoz, Ideval 17
  --  Werner, Rolf 17
  --  Germany 9, 20, 26, 27, 28, 30, 31, 32
 - Investments
  --  Magyar Telekom (see separate) 16
  --  OTE (see separate) 13
 - Product and Innovation
  --  Telekom Innovation Laboratories (T-Labs) 16
 - Products and services
  --  Business Marketplace 16
  --  immmr 16
  --  QIVICON 16
  --  T-Mobile TV 48
 - Systems Solutions 7, 17, 35, 53
 - T-Systems 6, 16, 17, 21, 24, 36, 38, 39, 53
  --  South Africa 36, 39, 53
 - Telekom Security 39
 - Technology
  --  5G
  --  haus 22
  --  Toll Collect 8
 - USA 6, 7, 8, 9, 10, 17, 34, 41, 42, 43, 45, 46, 47, 48, 49, 50, 51, 53
Dialogue Communications 16
Dido 27
Drillisch AG 27

E

EADS
 - Airbus 23
eBay
 - PayPal 20
EchoStar Communications Corp.
 - Dish Network 42
Emblaze Group
 - European Telecom 16, 24
Energous Corporation 24
Europe
 - Albania 13
 - Austria 10, 17
 - Croatia 10
 - Czech Republic 10, 38
 - France 52
 - Germany 7, 8, 9, 16, 17, 19, 20, 25, 26, 27, 30, 33, 34, 39, 42, 43, 52, 53
  --  Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen (BNetzA, RegTP, FNA, or German Federal Network Agency) 27, 52
  --  Government 20
 - Greece 10
 - Hungary 10, 38
 - Italy 6, 22, 38
 - Netherlands 10, 14, 52
 - Poland 10, 17, 38
 - Romania 10, 16
 - Serbia 13
 - Slovakia 10
 - Spain 38
 - Turkey 41, 42
 - United Kingdom (UK) 13, 17
  --  British Standards Institute (BSI) 34
European Telecommunications Network OperatorsE Association (ETNO) 16, 24
European Union 22, 24, 52
 - European Commission 14, 21, 24, 45
EWE
EWE Tel 26, 27

F

Facebook 30, 31, 32, 53
 - Telecom Infra Project 22, 31
Ford Motor Company 20
 - Jaguar 17
France Télécom 12
 - Orange 13, 18
Fraunhofer Institute 32
Fujitsu 17

G

Gartner Group 37
Global Transit Solutions, LLC 17
GSM Association
 - Mobile World Congress 19
GSM Association (GSMA) 24

H

Hamburg Port Authority 21
Hitachi 17
Hrvatski Telekom (see DT, Croatia) 16
Huawei Technologies 22, 32, 33, 34, 42, 43, 53

I

Inmarsat 24

K

KPN 13, 14

L

Land Rover 17
Liberty Global
 - UPC Austria 8, 10
Liberty Global Inc.
 - UPC Broadband 8, 10
Lufthansa 24

M

Magyar Telekom (see DT) 16
 - Macedonia (Makedonski Telekom/T-Mobile) 16
 - T-Systems Hungary 16
MetroPCS Communications Inc. 45
Microsoft 39
Middle East
Saudi Arabia 41, 42, 43

N

Nokia 21, 22

O

Open Handset Alliance (OHA)
 - Android 51
OTE (Hellenic Telecom. Org. SA, see DT) 13
 - Cosmote
   --  Albania (Telekom Albania) 13

P

Portugal Telecom 39

Q

Qatar Telecom (Qtel) 12
Quantenna Communications 28

S

Samsung 22
SAP 17, 38
Satelindo 39
SK Telecom 24
SOFTBANK CORP. 41, 43
 - Son, Masayoshi 41
Sprint Corporation 6, 8, 34, 41, 42, 43, 45, 46, 48, 49, 53
Symantec 39

T

Technology
 - 2G
  --  GSM 24
 - 4G
  --  Long Term Evolution (LTE) 45, 46
 - 5G 6, 7, 8, 16, 21, 22, 24, 26, 27, 30, 33, 34, 48, 49, 52, 53
 - Fibre 26, 27, 30, 31, 32
 - FTTH 30, 32
 - GPS 32
 - IP 16, 31
 - IPTV 48
 - MMS 17
 - mobile TV 48, 49
 - OTA 24
 - R&D 16, 34
 - RF 24
 - Smartphone 49
 - Spectrum
   --  Advanced Wireless Spectrum 45
 - W-LAN 24, 28
Tele2 10, 14, 52
 - Netherlands 10, 14
Telecom Italia 22
Telefonica Group 18
Telekom Slovenije
 - ONE 50
Telekom Srbija a.d. 13
TeliaSonera 13
Transnet 36, 37, 53

U

United Internet 26, 27, 52
 - 1&1 Internet 27
 - Versatel 27

V

Verizon Communications 42, 45, 51
 - Verizon Wireless 45
Vodafone 16, 17, 18
 - Europe Region
   --  Romania 16
   --  UK 17
Volkswagen AG 20

W

Wipro 17
Worldpay Group 12

Z

ZTE Corp. 33, 34, 42, 43

  • Report of unsubstantiated rumours of Deutsche Telekom interest in a BT bid prompts further round of speculation.
  • Höttges downplays prospect, but positive on BT recovery potential.

November 2018 saw a flurry of reports that Deutsche Telekom (DT) was considering raising its existing stake in BT and potentially launching a takeover of its British peer.

The latest round of BT-DT rumours originated in the Financial Times (FT) with an Alphaville live market report citing comments from several unnamed sources discussing rumours circulating in the “darker corners of the market” that suggested DT was holding talks with advisors regarding a full takeover of BT Group. Discussions were said to have taken place “very recently” between the two telco groups.

The Alphaville feed was very clear that the foundations for the rumours appeared shaky at best, but reported the widely circulating rumours “only seeking to let sunlight be the disinfectant”.

The future direction of BT is subject to considerable speculation generally at the moment, linked to the imminent arrival of outgoing Worldpay co-Chief Executive Philip Jansen as its new Group Chief Executive. The future of BT’s infrastructure arm Openreach has been under close scrutiny in particular. The official BT line is that Jansen will be pursuing the gist of BT’s recently laid out transformation plan which is built on Openreach remaining within the Group, although fresh thinking on BT’s future can obviously not be ruled out. DT has backed that plan (Deutsche Telekomwatch, #74).

BT down the list of DT global domination plans…

Responding to a question during DT’s latest results conference call on the prospect of DT raising its stake in BT, Timotheus Höttges joked that acquisition plans were somewhere down the list of DT ambitions, below takeovers of Orange, KPN Group, and TeliaSonera.

Höttges suggested that he should not comment on the question in earnest, as it was policy not to respond to M&A-related questions. However, with BT a strategic investment and “part of our pension stock here” (Deutsche Telekomwatch, #71) he did have positive remarks to make on the transformation work that the UK incumbent is undertaking. The scope of the BT recovery plan was described as “quite impressive” and he anticipated an uptick in its valuation in the future, but stressed that “we are not in a phase of upgrading or improving our stake here”.

Changes for the future were not ruled out, though – once the new BT chief executive is in place, if the targeted improvements in business performance come to fruition, and should the UK regulatory environment become more amenable, “then we discuss further”, said Höttges.

More BT-DT speculation appears inevitable in the coming weeks, as the Group nears late-January 2019’s expiry of a standstill arrangement on its 12% BT stake.

Deutsche Telekomwatch’s sibling, BTwatch considers a foreign takeover of BT in the near-future to be highly unlikely, not least due to UK political sensitivities, but with a stake-increase feasible. While BTwatch sees DT as considered rather than nimble in its opportunism, DT could deftly exploit current corporate and national vulnerability to grow its BT stake comparatively cheaply, and to secure greater commitment to partner in strategic areas such as infrastructure and service innovation, enterprise, procurement, content, and international cooperation — all under the guise of placing a generous ‘vote of faith’ in both BT and the UK. DT did not, however, swoop in 2012-13 to exploit the crisis in Greece, to raise its stake in OTE cheaply (a near-90% discount at lows), although the local situation may have been riskier due to Germany being widely damned by locals for being considered part of a ‘troika’ bullying Greece, thus potentially tarring DT as a ‘bad actor’.

Image: BT Group

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