Flying through the sunrise


Deutsche Telekomwatch
This release
: #81
March 2019: 76pp
Releases/year: 10+
Click for more details of this release

EXECUTIVE BRIEF

MANAGEMENT UPDATE

Q4 FY18: USA-fuelled DT gains more ground [p.6]

  • Headline data: targets hit
  • Spend: growth doesn’t come cheap
  • Table: Deutsche Telekom, financial summary, FY18
  • Pushing the boundaries
  • Table: Deutsche Telekom, capex and spectrum investment development, FY12–18
  • Guidance: DT’s European reboot to get real
  • Table: Deutsche Telekom, financial development picture, FY13–FY21

GROUP

Deals: DT takes high-altitude punt on comms-in-the-sky player [p.14]

  • Group looks into thin air for network gains
  • A new layer for Integrated Networks Strategy

Partnerships: DT seeks to widen IoT presence with new ‘ecosystem’ [p.17]

  • DT unveils IoT Solution Optimizer
  • Table: DT’s “global IoT ecosystem”
  • Less than an eSIM: new integrated platform for low‑cost IoT devices

People [p.21]

  • Table: People movement highlights

Supply Chain: DT quiet as Huawei pressure eases (slightly) in Germany  [p.25]

  • Pragmatism versus suspicion
  • DT walking a political tightrope
  • Calming measures, home and abroad
  • The US dimension: Höttges goes to Washington
  • End-game approaching in Sprint–TMUS battle

Technology and Innovation: DT says game on for 5G; first antenna shoots appear [p.31]

  • More 5G trials in Germany
  • Investment catch-up
  • DT takes 5G on the MWC dancefloor

DT gains a friend in the ULE Alliance [p.35]

  • DT and Orange remain homies

GERMANY

Q4 FY18: TDE staying the course on cost-cutting [p.39]

  • Table: Deutsche Telekom, Germany area financial summary (as reported), FY18
  • Table: Deutsche Telekom, Germany area operational indicators, Q4 FY18
  • €750m savings still the main prize
  • IP transplant will be worth the wait

Strategy: TDE sounds emergency alarm on 5G auction [p.41]

  • Fuzzy roaming rules
  • First-mover disadvantage

Commercial: Political cover‑up [p.44]

Partnerships: Drillisch in the game [p.45]

  • Table: Not playing by the BNetzA rulebook

Network: Reply responds to Access 4.0 call [p.47]

  • Has DT’s Four Play been a bit full-on?

EUROPE

Q4 FY18: Gopalan’s regional refresh gathers momentum [p.50]

  • Table: Deutsche Telekom, Europe area financial summary (as reported), FY18
  • Table: Europe segment strategic and financial objectives, FY17–FY21
  • Bugs in Poland and Romania suggest reboot hasn’t worked completely
  • Table: Deutsche Telekom, Europe area revenue by territory (adjusted), FY18
  • Recovery building, but not yet signed off

Austria: TMAT eyes 5G jumpstart after auction gains [p.53]

  • 5G launch “within weeks”
  • A prelude to the main event
  • Table: Deutsche Telekom’s Europe spectrum agenda FY19–20

Czech Republic: CTÚ makes moves towards 5G auction [p.55]

  • Been there, done that
  • Huawei matters

SYSTEMS SOLUTIONS

Q4 FY18: “Solid” year for T‑Sys but change still the focus [p.58]

  • Table: Deutsche Telekom, Systems Solutions financial summary (adjusted), FY18
  • Go-to-market gains
  • Table: T‑Sys’ “re-defined” portfolio structure

USA

Q4 FY18: TMUS powers on but DT eyes yet more gains [p.63]

  • Table: Deutsche Telekom, US area financial summary (as reported), FY18
  • Table: Deutsche Telekom, US area operational indicators, Q4 FY18
  • America first

Strategy: TMUS gears up for 5G; unlimited data plans in store [p.65]

  • TMUS won’t forget its Un-Carrier roots
  • 600MHz on the move
  • Sprint key to TMUS’ bid for 5G gold

FURTHER READING

INDEX

Symbols

3rd Generation Partnership Project (3GPP) 68

A

Affirmed Networks 15, 16

Africa 22

Allianz 16

Alphabet

 - Google 14, 15, 36, 37, 67

  --  Android 56

Altair Semiconductor 19

Amazon.com Inc. 15, 36, 69

Americas

 - Brazil 22

 - Canada 27, 29, 44

 - Latin America 22

 - Mexico 22

 - North America 21, 23

 - United States of America (USA) 6, 7, 10, 11, 12, 15, 18, 23, 25, 26, 27, 29, 31, 33, 36, 52, 56, 61, 69, 73

  --  Department of Justice (DoJ) 30, 69

  --  Federal Communications Commission (FCC) 30, 69, 71

  --  government 29

  --  States

   ---   Califormia 68, 69

   ---   Kansas 67, 68, 71

   ---   New York 68

   ---   Washington 29

Apple

 - iOS 56

 - iPhone 68

Asia-Pacific 20, 25, 31, 34, 61

 - Australia 27, 28

 - China 16, 23, 25, 26, 27, 28, 29, 30, 37, 56

  --  Government 25

 - India 47, 51

  --  Licence Circles 68

 - New Zealand 27, 28, 71

 - Singapore 61

 - South Korea 20, 33, 34

Atos 36

AT&T 37, 52, 66, 67, 68, 69

Axiata Group Bhd (TM International)

 - Cambodia (TM International (Cambodia) Co. Ltd./hello) 36

B

Blackstone Group 16

British Broadcasting Corp. (BBC) 71

British Standards Institute (BSI) 25, 26, 27

Broadcom 47

C

Český Telekomunikační Úřad (ČTÚ) 55, 72

China Unicom 37

Chordant 18

Committee on Foreign Investment in the United States 30

D

Deutsche Bank 16

Deutsche Telekom 6, 7, 8, 9, 10, 11, 12, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 25, 26, 27, 28, 29, 31, 32, 33, 34, 35, 36, 37, 39, 40, 41, 42, 43, 44, 45, 47, 48, 50, 51, 52, 54, 55, 56, 58, 59, 60, 61, 65, 66, 67, 68, 69, 70, 71, 72, 73

 - Deutsche Telekom Capital Partners 15, 16, 21

 - Deutsche Telekom Strategic Investments 16

  --  Mojio (see separate) 15, 56

  --  Next Generation Enterprise Network Alliance (ngena) 14, 20

  --  Telekom Innovation Pool 14, 34, 47

   ---   BENOCS 15

   ---   Comfortcharge 14

   ---   MobiledgeX 14, 33, 71

   ---   Rtbrick 15

   ---   Stratospheric Platforms 14, 15

 - Europe 50, 51, 52

  --  Austria 23, 28, 50, 53, 54, 72

  --  Croatia (Hrvatski Telekom) 14, 22

  --  Czech Republic 21, 22, 28, 34, 55, 56

  --  Hungary (see Magyar Telekom) 22, 34, 37

  --  Netherlands 10, 12, 14, 28, 36, 52

  --  Poland (Polska Telefonia Cyfrowa/PTC) 23, 28, 51, 56

  --  Slovakia (Slovak Telekom/T-Mobile) 21, 22

  - European Aviation Network 15

 - Executives

  --  Al Saleh, Adel 59

  --  Arnold, Heinrich 22

  --  Bierwirth, Andreas 54

  --  Calian, John 20

  --  Clauberg, Axel 22, 37

  --  Dannenfeldt, Thomas 6

  --  Daub, Daniel 14

  --  El Hattachi, Rachid 14

  --  Fleutiaux, Francois 60

  --  Gopalan, Srini 51

  --  Hischke, Sven 21

  --  Hollaender, Stefan 22

  --  Höttges, Timotheus 6, 10, 16, 29, 40, 41, 58, 72

  --  Illek, Christian 6, 39, 42, 50, 60

  --  Kopf, Wolfgang 43

  --  Legere, John 30, 67, 69

  --  Lehner, Dr. Ulrich 44

  --  Lesser, Andy 22

  --  Nemat, Claudia 31, 32, 33, 48

  --  Ray, Neville 65

  --  Schröder, Lothar 44

  --  Streibich, Karl-Heinz 44

  --  van der Walt, Mardia 21

  --  Wössner, Dirk 40

 - Ex-executives

  --  Munhoz, Ideval 22

  --  Obermann, Rene 7

 - Germany 7, 8, 9, 11, 21, 25, 26, 27, 28, 32, 33, 34, 39, 40, 41, 42, 43, 44, 45, 47, 48, 61

 - Investments

  --  Magyar Telekom (see separate) 22, 23, 34, 37

 --  OTE (see separate) 51, 52, 55

 - Product and Innovation

  --  hubraum 32

  --  Telekom Innovation Laboratories (T-Labs) 20, 22

 - Products and services

  --  IoT Solution Optimizer 18, 70

  --  nuSIM 19, 70

  --  QIVICON 35

  --  Smart Speaker 35, 36

 - Strategy

  --  Connected Home 35

 - Systems Solutions 8, 10, 12, 22, 57, 58, 73

 - Telekom IT 10, 12

 - T-Systems 7, 17, 21, 22, 23, 37, 58, 61

  --  Detecon 22

  --  Deutschland 23

  --  Slovakia 23

  --  South Africa 23

  --  Telekom Security 22

  --  USA 6, 7, 8, 10, 11, 18, 23, 25, 29, 30, 33, 52, 65, 66, 67, 68, 69

Deutsche Telekom Capital Partners 15

DLA 20

Drillisch AG 45

DSP Group 35, 71

E

EADS

 - Airbus 15

Emblaze Group

 - European Telecom 20

EMC

 - VMware 61

Ericsson 25, 30, 32, 67, 69

Europe

 - Albania 50, 54, 55

 - Austria 7, 15, 18, 22, 31, 44, 51, 52, 53, 54, 55, 72

  --  Rundfunk und Telekom Regulierungs (RTR) 53, 54, 72

 - Central & Eastern Europe (CEE) 23

 - Croatia 18, 22, 52, 54, 55

 - Czech Republic 15, 18, 44, 52, 54, 55, 56, 72

 - Denmark 32

 - Finland 32

 - France 16, 32, 35, 36, 44

 - Germany 7, 8, 9, 10, 12, 15, 16, 18, 21, 22, 25, 26, 27, 31, 32, 33, 34, 38, 39, 40, 41, 42, 43, 44, 45, 48, 52, 53, 54, 55, 56, 61, 71, 72

  --  Bundesnetzagentur (BNetzA, or German Federal Network Agency) 25, 26, 27, 41, 42, 43, 44, 45

  --  Government 26

 - Greece 31, 51, 52, 54, 55

  --  Hellenic Telecoms and Post Commission (EETT) 55

 - Hungary 18, 22, 23, 31, 34, 52, 54, 55

 - Italy 47

 - Macedonia 22, 54, 55

 - Netherlands 7, 18, 22, 31, 32, 36, 54, 55, 61

 - Poland 15, 18, 31, 32, 51, 52, 54, 55, 56, 72

 - Romania 51, 52, 54, 55

 - Scandinavia 19, 56

 - Slovakia 18, 52, 54, 55

 - Spain 45

 - Switzerland 20, 23

 - United Kingdom (UK) 14, 15, 27, 32, 36, 71

  --  British Standards Institute (BSI) 25, 26, 27

European Telecommunications Standards Institute 20

European Union 16, 34, 55

 - European Commission 55, 72

ExxonMobil Corp. 44

F

Facebook 22, 37, 69

 - Telecom Infra Project 22, 37, 48

France Télécom

 - Orange 21, 35, 36, 71

G

GCSB, New Zealand 28

GSM Association

 - Mobile World Congress 31, 32, 33, 34, 36, 37, 43, 71

GSM Association (GSMA) 28, 71

H

Hellman & Friedman 16

HiSilicon 19

Hrvatski Telekom (see DT, Croatia) 14, 22

Huawei Technologies 25, 26, 27, 28, 29, 30, 32, 33, 56, 71

I

IBM 22, 23

Inmarsat 15

Intel 35, 37, 67

Intellectual Ventures 69

L

LG Electronics 33, 66

Liberty Global

 - UPC Austria 7, 50, 52, 54

Liberty Global Inc.

 - UPC Broadband 7, 50, 51, 52, 54

M

Magyar Telekom (see DT) 22, 34, 37

 - Executives

  --  Mattheisen, Christopher 23

 - Macedonia (Makedonski Telekom/T-Mobile) 52

 - T-Systems Hungary 22

Market segments

 - Mobile virtual network operator (MVNO) 44, 45, 61, 67

 - Multinational corporations (MNCs) 17

Microsoft 17, 23, 61

Middle East 22

 - Iran 29

 - Israel 32

 - Qatar 23

Mojio 15, 56

Mozilla Foundation 69

Mozilla Corporation 69

N

Nokia 30, 32

Nomura 20

Nuance Communications Inc. 36

O

Omnicom

 - DDB 43

Open Handset Alliance (OHA)

 - Android 56

Osram 34

OTE (Hellenic Telecom. Org. SA, see DT) 51, 52

 - Cosmote

  --  Albania (Telekom Albania) 51, 52

P

Panasonic 35

Philippine Long Distance Telephone Co. (PLDT) 20

Premiere AG 71

Q

Qualcomm 16, 19, 34

Quectel Wireless Solutions 19, 70

R

Reliance-Anil Dhirubhai Ambani Group

Reliance Communications (RCom) 51

S

Salesforce 22

Samsung 18, 19, 33, 66, 69, 71

SAP 17, 58, 60, 61

Scout24 16

Scout24-Gruppe 16

 - AutoScout24 16

Sequans 18, 19, 70

Siemens AG 16

Sierra Wireless 19

SK Telecom 33, 71

Slovak Telekom (see DT, Slovakia) 21, 22

SOFTBANK CORP. 29

Software AG 44

Sprint Corporation 6, 7, 10, 11, 25, 29, 30, 37, 66, 67, 68, 71, 73

Swisscom 20

T

Target Corporation 60

Technology

 - 2.5G 67

 - 2G 67

  --  CDMA 56

  --  GSM 28

 - 3G

  --  Evolved HSPA (HSPA+/I-HSPA)

  --  MIMO 32

 - 4G 27, 28, 68

  --  Long Term Evolution (LTE) 10, 18, 19, 34, 66, 68, 69

 - 5G 7, 10, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 41, 42, 43, 45, 48, 53, 54, 55, 56, 65, 66, 67, 68, 71, 72, 73

 - Fibre 32, 40, 48

 - Fixed-mobile convergence (FMC) 51

 - FTTH 40

 - IP 14, 22, 37, 40

 - LTE-Vehicular (LTE-V) 34

 - Mozilla 69

 - Narrowband Internet of Things (NB-IoT) 18, 19

 - OpenStack 48

 - Personal computer 65, 73

 - RAN 25, 28, 32, 37

 - R&D 15, 36

 - SIM 19, 70

 - Smartphone 19, 33, 56, 66, 69

 - SMS 19

 - Spectrum 32, 44, 55, 67

  --  700 MHz 54, 55, 67

  --  800 MHz 54

  --  1800 MHz 54

  --  2100 MHz 54

  --  2300 MHz 54

  --  2600 MHz 54

 - ultra-low energy (ULE) 35, 36, 71

 - VDSL 40

 - WAN 20

 - W-LAN 37, 56, 61

Tele2 7

 - Netherlands 7

Telefonica Group 41, 44, 45, 72

 - Europe 55

Telekom Austria 22, 53

 - Austria

  --  A1 22, 53

Telit 19

Telus 15

Total S.A.

 - Saft Groupe 18

U

United Internet 45

V

Value-added services 45

Venfin Ltd

 - Tracker Network (Proprietary) Limited (TRACKER) 56

Veolia Environnement SA 18

Verizon Communications 52, 66, 67, 68, 69

Visa 20

Vodafone 16, 17, 28, 34, 41, 44, 55, 61, 72

 - Europe Region

  --  Czech Republic 55

  --  Germany 41, 61

X

Xiaomi 23

Z

ZTE Corp. 25, 26, 28, 29, 30, 56

  • DT furthers status as prolific corporate venture player and backer of potential supply chain disruptors.
  • Tie-up has echoes of Google’s high-profile Loon initiative.

Deutsche Telekom (DT) has taken a minority stake in Isle of Man-registered aviation technology pioneer Stratospheric Platforms Ltd, Deutsche Telekomwatch can reveal.

The 31%-holding has been added to DT’s Telekom Innovation Pool (TIP) – a family of “strategic” investments that include edge computing spinoff MobiledgeX, car-charging venture Comfortcharge, and enterprise networking collective ngena. It was routed through a vehicle within TIP called Sophia Invest, which was quietly set up by DT around 2016, but without any detail on its aims or focus.

DT’s ties with Stratospheric Platforms look to extend back to at least the same year, when the Group began being referenced in the business’ Articles of Association, and appears to have become a shareholder.

Former T-Mobile Netherlands Chief Technology Officer Rachid El Hattachi and Hrvatski Telekom (HT) Chief Financial Officer Daniel Daub had spells as Directors of the Isle of Man business during 2016 and 2017. Daub has sat on the Board of a UK-based subsidiary of Stratospheric Platforms, called Hydrogen Aircraft Services Ltd, since its incorporation in April 2016. At that time, Daub was DT’s Vice-President of Equity & Innovation Controlling, with oversight of American and European businesses, before joining HT in 2017.

Neither DT nor Stratospheric Platforms responded to requests for more information on the tie-up.

Group looks into thin air for network gains

Stratospheric Platforms Director Peter Davidson is a Cambridge-based technology consultant who received attention in the early part of the decade in connection with the UK government-funded Stratospheric Particle Injection for Climate Engineering project. This planned to use tethered, high-altitude balloons to disperse particles into the stratosphere, to help counteract climate change, but reportedly hit trouble over internal intellectual property differences and regulatory concerns.

A series of recent patent filings by Davidson and other directors of Stratospheric Platforms indicate a current focus on using high-altitude craft for next-generation communications – reminiscent of Google’s Loon project. A patent detailing delivery of data between “high altitude aerial platforms” and “ground-based or low altitude user equipment” was granted to Stratospheric Platforms in January 2019, with Davidson among named inventors.

Further, according to company filings, Stratospheric Platforms has a research and development relationship with German aviation research business Leichtwerk. Davidson and Leichtwerk Chief Executive Dr. Reiner Kickert jointly applied for a patent in 2016, focused on wing geometry of “unmanned high altitude aircraft operating above 15km”, which would help deliver “information services at altitude, including telecommunications, observation, astronomical, and positioning services”. Stratospheric Platforms’ Articles of Association leaves scope for licensing of its technology by DT NatCos, with approval of the business’ Board.

A new layer for Integrated Networks Strategy

DT has for several years been visibly interested in aviation technology as a driver of its Integrated Networks Strategy, pushing in-flight broadband services through its European Aviation Network partnership with Inmarsat, and tying with Airbus to explore edge-based media-sharing platforms for aircraft passengers (Deutsche Telekomwatch, #78).

Through prolific corporate investment arm Deutsche Telekom Capital Partners, which manages TIP, the telco has also been increasingly channelling financial backing to upstart vendors that promise to disrupt operators’ supply chains and reduce procurement costs. As well as Stratospheric Platforms, DT has minority stakes in network infrastructure upstarts Affirmed Networks, BENOCS, and Rtbrick, among others.

Image: Lenny K Photography / Flickr (CC BY 2.0)

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