Deutsche Telekom flags


Deutsche Telekomwatch
This release
: #80
February 2019: 44pp
Releases/year: 10+
Click for more details of this release

Executive brief

Group

Deals: DT pulls plug on Albania [p.6]

  • A taster for wider portfolio rejig?
  • Table: DT “principal subsidiaries” and their affiliates

People [p.11]

  • Table: people movements

Supply Chain: DT pushes back against anti-Huawei forces in Europe [p.15]

  • Keep calm and carry on
  • Mixed messages from Germany
  • Hurricane Huawei continues to gather force
  • America first (Huawei last)

Germany

Legal and Regulatory: TDE treads warily into 5G auction [p.21]

  • 5G investment under threat
  • Table: Not playing by the BNetzA rulebook: Kopf rounds on the regulator
  • Dommermuth makes his move
  • DIY 5G

TDE gets a boost in in-building broadband battle [p.26]

  • TDE responds

Europe

Greece: EETT reviews spectrum bands for 5G [p.30]

  • Table: Deutsche Telekom's Europe spectrum agenda FY19-20

Hungary: MT progresses automotive-flavoured 5G testing [p.32]

  • Ericsson vs Huawei: MT yet to commit

Slovakia: ST ties with Ericsson on massive MIMO trial [p.34]

USA

Network: TMUS looks high and low for 5G spectrum [p.37]

  • 600MHz on the move
  • Sprint is the key to TMUS' 5G high jump

Further reading

Index

A

Africa 13

Albtelecom 7

Alphabet

 - Google 13

  -- Android 41

Americas

 - Brazil 12

 - Canada 18

 - North America 11, 12

 - United States of America (USA) 8, 13, 17, 18, 19, 22, 35, 36, 38, 42

  --  Commerce Department 18

  --  Department of Justice (DoJ) 15, 18, 19

  --  Federal Communications Commission (FCC) 19, 37, 42

  --  States

   ---   Washington 18

Asia-Pacific 11

 - Australia 17, 18, 35

 - China 15, 16, 17, 18, 19, 23, 40

 - India

  --  Licence Circles

   ---   Himachal Pradesh 31

 - Japan 18, 19

 - Malaysia 35

 - New Zealand 18

 - Singapore 35

AT&T 10, 12, 38

B

Beta Film GmbH 28

Bigtincan Holdings 39

Brand Finance 10

BREKO 27, 41

British Standards Institute (BSI) 17

BT Group 8, 17, 18, 40

 - EE 8, 18

Bundesliga 28

C

CeBIT 14

Comcast Corp. 13

Committee on Foreign Investment in the United States 19

Cosmote Romanian Mobile Teleco. SA (see OTE/DT) 8

D

Daimler AG 9, 25

 - Mercedes-Benz 10

Dennis Publishing 12

Deutsche Telekom 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 22, 24, 25, 27, 30, 31, 32, 33, 34, 35, 37, 39, 40, 41

 - Corporate

  --  Headquarters 14, 15, 17, 19

 - Deutsche Telekom Capital Partners

  --  Next Generation Enterprise Network Alliance (ngena) 10

 - Europe 6

  --  Austria 7, 8, 11, 17

  --  Bulgaria (see OTE) 7

  --  Croatia (Hrvatski Telekom) 8, 31

  --  Czech Republic 7, 8, 11, 17, 35

  --  Greece (see OTE) 30

  --  Hungary (see Magyar Telekom) 7, 8, 11, 32, 35, 41

    ---   International Carrier Sales & Services (ICSS) 11

  --  Montenegro (see Magyar Telekom) 8, 11

  --  Netherlands 7, 8, 13, 17

  --  Poland (Polska Telefonia Cyfrowa/PTC) 7, 8, 17

  --  Romania (see Cosmote Romania/OTE) 8

  --  Slovakia (Slovak Telekom/T-Mobile) 7, 8, 34, 35, 41

  --  UK (EE) 8, 18

 - Executives

  --  Ewaldsson, Ulf 13

  --  Hartmann, Jens 12

  --  Höttges, Timotheus 17, 22

  --  Kopf, Wolfgang 21

  --  Legere, John 19, 38

  --  Ray, Neville 13, 38

  --  Rekasi, Tibor 32

  --  Tsamaz, Michael 7

  --  Tsybulskaya, Dina 11

 - Germany 8, 9, 15, 16, 17, 21, 22, 23, 25, 26, 27, 28

 - Goingsoft 9

 - Investments

  --  Magyar Telekom (see separate) 7, 8, 11, 32, 33, 35, 41

  --  OTE (see separate) 6, 7, 8, 11, 30, 41

 - Products and services

  --  T-Mobile TV 39

 - Systems Solutions

  --  T-Systems 8, 9, 11, 12, 32, 35

 - South Africa 11

 - Telekom Security 12

 - Toll4Europe 9

  --  Toll Collect 9

 - USA 7, 8, 11, 13, 15, 18, 19, 37, 38, 39, 42

Drillisch AG 24, 41

E

Ericsson 11, 13, 17, 19, 33, 34, 35, 38, 42

Eurobank 6

Europe

 - Albania 6, 31, 40

 - Austria 9, 11, 31

 - Bulgaria 7

 - Croatia 31, 41

  --  Hrvatska Agencija za Postu i Elektronicke Komunikacije (HAKOM) 31

 - Czech Republic 7, 31

 - Finland 10

 - Germany 8, 9, 10, 12, 14, 15, 16, 17, 19, 20, 21, 22, 23, 24, 25, 26, 27, 31, 38, 40, 41

  --  Bundesnetzagentur (BNetzA, or German Federal Network Agency) 22, 24, 25, 26, 27

  --  Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen (BNetzA, RegTP, FNA, or German Federal Network Agency) 22, 26, 41

  --  Government 9

 - Greece 7, 11, 30, 40, 41

 - Hellenic Telecoms and Post Commission (EETT) 30

 - Hungary 7, 31, 32, 33, 35, 41

 - Macedonia 11, 31

 - Montenegro 7, 11

 - Netherlands 12, 31

 - Poland 9, 11, 15, 31, 40

 - Portugal 11

 - Romania 7, 8, 31, 40

 - Scandinavia 10

 - Serbia 7

 - Slovakia 7, 31, 34, 35, 41

 - Sweden 10, 13, 17, 34

 - Switzerland 12

 - Turkey 10

 - Ukraine 8

 - United Kingdom (UK) 8, 10, 12, 13, 18, 35

  --  British Standards Institute (BSI) 17

European Union 15, 18, 30, 35, 40

F

Forthnet 11

France Télécom

 - Orange 10

 - UK (see EE, DT) 8, 18

FreeMove Alliance (DT-FT-Telia Company-TI) 10

G

Global M2M Assocation (GMA) 10

Goldman Sachs 8

Green Party 9

H

Hewlett-Packard 31

Hitachi 13

Hrvatski Telekom (see DT, Croatia) 8, 31

Huawei Technologies 15, 16, 17, 18, 19, 23, 33, 35, 40

I

Intel 37, 38, 42

L

Liberty Global

 - UPC Austria 7

Liberty Global Inc.

 - UPC Broadband 7

M

Magyar Telekom (see DT) 7, 8, 11, 32, 35, 41

 - Macedonia (Makedonski Telekom/T-Mobile) 7, 8, 11

 - Montenegro (Crnogorski Telekom) 8, 11

 - Romania

 - Combridge 8

 - T-Systems Hungary 11, 32, 35

Major League Baseball 42

Market segments

 - Machine-to-machine (M2M) 14

 - Mobile virtual network operator (MVNO) 24

 - Multinational corporations (MNCs) 10

Middle East 13

 - Iran 18

N

Nokia 17, 19

North Atlantic Treaty Organisation (NATO) 15, 18

Novatel Wireless 8

NTT 12

O

Open Handset Alliance (OHA)

 - Android 41

OTE (Hellenic Telecom. Org. SA, see DT) 6, 7, 8, 11, 40

 - Bulgaria (Globul) 7

 - Cosmote 8, 30

  --  Albania (Telekom Albania) 6, 8, 40

 - Greece 30

 - Romania 8

Tsamaz, Michael 7

P

PPF Group 7

Premiere AG 40

Q

Qualcomm 35, 37

S

SAP 12

Siemens AG 25

Sky

 - Sky Deutschland 28

Slovak Telekom (see DT, Slovakia) 7, 8, 34, 35, 41

SOFTBANK CORP. 19

Sprint Corporation 15, 19, 38, 40

Swisscom 12

T

Technology

 - 2.5G 38

 - 2G 14, 38

 - 3G 14, 31, 35

  --  Evolved HSPA (HSPA+/I-HSPA)

  --  MIMO 34, 35, 41

 - 4G 14, 16, 18

  --  Long Term Evolution (LTE) 35

 - 5G 11, 13, 15, 16, 17, 18, 21, 22, 23, 24, 25, 30, 31, 32, 33, 34, 35, 37, 38, 40, 41, 42

 - Fibre 23, 26, 27

 - FTTH 26, 27

 - LTE Advanced 35

 - M2M 14

 - mobile TV 42

 - Narrowband Internet of Things (NB-IoT) 14

 - OpenStack 12

 - OTA 35

 - RAN 17, 23

 - R&D 11, 34

 - SIM 14

 - Smartphone 18

 - Spectrum 21, 30, 31, 37, 38, 41

  --  700 MHz 30, 31, 35, 38

  --  800 MHz 31

  --  2100 MHz 30, 31

  --  2300 MHz 30

  --  2600 MHz 31

  --  3500 MHz 31, 35

  --  Advanced Wireless Spectrum 37

 - VDSL 26

 - Vectoring 41

 - WAN 10

 - W-LAN 9

Tele2 7, 31

 - Netherlands 7

Telefonica Group 22

Telekom Austria

 - Austria

 - A1 31

Telekom Srbija a.d. 7

Telia Company 10

Twitter Inc. 39

U

UEFA 28

United Internet 21, 24, 41

V

Value-added services 10, 24

Verizon Communications 10, 38

 - Verizon Wireless 38

VINCI Group

 - Cofiroute, S.A. 9

Vivacom (BTC) 6

Vodafone 7, 10, 18, 22

 - Europe Region

  --  Albania 7

  --  Germany 22

Volkswagen AG 25

X

Xumo 39

Z

ZTE Corp. 16, 18

  • Tiny deal, but one showing DT’s changing priorities.
  • A rare country exit for expansive Group.
  • A marker of DT’s new “Trans-Atlantic” character, and move beyond universal reach across Europe.
  • Albania only one of multiple European markets where Group presence is being questioned.

Deutsche Telekom (DT) followed up recent signs of a more ruthless strategic focus in Europe with a prospective exit from Albania.

Following months of speculation (Deutsche Telekomwatch, #76 and #78), OTE Group announced that it had agreed a deal to offload its 99.97% stake in Telekom Albania (TA) – which, by extension, comprises a 45% indirect holding for DT – to Bulgarian-based venture Albania Telecom Invest (ATI).

As envisaged, the sale will see OTE gain EUR50m for an operator that produces EUR68m in revenue. This represents less than 2% of OTE’s total turnover, and a mere 0.4% of DT’s Europe area top-line (in its last reported fiscal year to 31 December 2017/FY17). Eurobank acted as OTE’s financial advisor on the agreement. The deal with ATI is expected to complete by 30 June 2019, if approved by local regulators.

ATI is jointly controlled by Spas Roussev, a high-profile Bulgarian businessman and controlling shareholder of the country’s incumbent Vivacom, and Elvin Guri, an Albania-Bulgarian investor. Empower Capital, the Sofia-based fund of which Guri is Chief Executive (CEO), does not flag any existing (or potentially conflicting) telecoms investments on its website.

TA had been linked with several other potential buyers in the run-up to the ATI agreement, including the possibility of a politically-charged buyout by Serbian incumbent Telekom Srbija (Deutsche Telekomwatch, #76 and #78).

TA-rival Albtelecom and Czech billionaire Petr Kellner’s PPF Group, which has competing telecoms interests with DT in the Czech Republic, Hungary, Montenegro, and Slovakia, were also mooted as having interest in TA.

Neither DT nor OTE went into any detail on their motivations for the TA sale. OTE Chairman and CEO Michael Tsamaz described the TA sale as a “strategic decision, in the context of OTE Group’s redefined priorities and growth plans”, but did not elaborate.

A taster for wider portfolio rejig?

While this is first country exit that DT has made since OTE’s sale of Bulgaria’s Globul in 2013 (Deutsche Telekomwatch, #19), the move is not necessarily a major departure in Group strategy.

As a small and mobile-only operator, and one that was loss-making in FY17, TA sits on the periphery of the Group’s convergence-, scale-, and profitability-focused Europe segment. The operator had 1.9 million mobile subscribers at 31 December 2017, putting it second in the market behind Vodafone Albania, and ahead of Albtelecom in third.

The deal also chimes with the pragmatic ‘pick-and-mix’ approach to deal-making that DT has been taking in markets where (in the Group’s parlance) it remains a “converged challenger” (rather than “converged leader”), and so needs either to shape up or sell out. Since 2016, this has seen buyouts by T-Mobile Austria (UPC Austria) and T-Mobile Netherlands (Tele2 Netherlands), ‘wholebuy’-led broadband expansion by T-Mobile Poland, and, in the case of T-Mobile Czech Republic, wireline investments supported by soft-consolidation with more fixed-line-geared sibling Slovak Telekom (Deutsche Telekomwatch, passim).

Another take on the sale is that it maintains the sense that DT – an aggressive empire-builder across Europe up to the time of the regional debt crisis – has in more recent times performed a reset of ambitions in the region, having seen its expansive mojo weakened by perpetual economic, political, and regulatory battles, and the rise of the lustrous T-Mobile US (TMUS) as its now key object of affections (and a cash-hungry one at that).

Sales of Telekom Romania (TR – also part of OTE), Magyar Telekom (MT), and MT-controlled Makedonski Telekom (MkT) have been mooted in recent months, and Roussev has been put forward as potential mopper-upper of various unwanted Group assets (Deutsche Telekomwatch, #76, #77, and #79). Shortly after the TA deal’s announcement, OTE denied the gist of a Capital report that quoted Roussev as saying he was holding talks with the Greek operator with regard to a buyout of TR, as a follow-up. OTE had “not entered negotiations with a third party”, said a spokesperson for the operator. Roussev was also cited as showing interest in MkT, as a prospective third stage in a takeover of DT indirect assets.

Better out than in

While the TA proceeds are minor, any wider retrenchment in central and eastern Europe would suggest a renewed push for cash to support plans elsewhere, especially with next-generation network spend demands rising in major markets like Germany and the USA, and rumours continuing to swirl around DT’s intentions for BT Group.

In an unconfirmed, anonymously-sourced report, UK newspaper the Mail on Sunday recently claimed that BT had “sounded out” M&A advisors Robey Warshaw and Goldman Sachs to help it repel any takeover move by DT.

A three-year, post-EE-sale standstill agreement that restricted DT from increasing its 12%-stake in BT came to an end in late-January 2019, no doubt inciting the latest wave of speculation over their relationship (and perhaps some City mischief-making too). BT’s shares remain priced at less than half the level of January 2016, when the EE deal completed, and effectively have been made even cheaper by sterling’s Brexit-led slump against the euro over a similar timeframe.

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