Filippo Rizzante, Reply, Robert Soukup, Deutsche Telekom, Ram Velaga, Broadcom and Hannes Gredler, RtBrick.


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

  • No dilution in ambitions as Group revamps project partner team.

Telekom Deutschland (TDE) confirmed the partner line-up that will support it on the next phase of rolling out its emerging Access 4.0 cloud-based networking platform (Deutsche Telekomwatch, #68, #74, and #77).

TDE said it had formed a “co-development partnership” with Italian digital services consultancy Reply Technology to carry the initiative towards further tests during 2019, and a commercial deployment in 2020. Deutsche Telekom (DT) had flagged the selection of a co-development partner in late-2018, but did not reveal the provider’s identity (Deutsche Telekomwatch, #79).

The deal sees Reply tasked with completion of the Access 4.0 platform in “carrier-grade quality and scale”, ahead of the 2020 launch. It will also be responsible for “conceiving and implementing a global ‘product-isation’ strategy” for Access 4.0, which will involve “working closely with other carriers to understand their respective needs, as well as a strong engagement in the open source community”. DT highlighted plans to bring other operators into the fold on Access 4.0 in May 2018, but has yet to flag any tie-ups (Deutsche Telekomwatch, #74).

Also involved in the Access 4.0 project is chip-maker Broadcom and RtBrick – a Bangalore, India-based provider of software and “targeted microservices” for cloud networking software, which DT took a stake in during 2018 via its Telekom Innovation Pool “strategic” investment vehicle (Deutsche Telekomwatch, #77). TDE will work with these two players to deliver a “fully featured” broadband network gateway for the Access 4.0 platform, based on merchant silicon.

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

DT has not been scared to talk up Access 4.0‘s potential. Calling it a “paradigm shift towards open, disaggregated, and microservices-based technologies”, DT envisages using it as a more efficient and flexible, multi-access platform, initially focused on delivering high-speed broadband connectivity and subsequently expanding to become a bearer of edge computing, 5G, Internet of Things, and other services. The platform is based on rollout of new stacks within certain central offices (the MSAN) and street cabinets (optical line termination), featuring lower component costs and much greater scope for automated management.

The promise of Access 4.0 appears very apt for DT, coming with the operator under heightened political and competitive pressure to expand fibre-to-the-premises availability and address rural broadband ‘whitespots‘ – and noticeably keen to explore innovations, like Access 4.0, that could cut the costs of doing so. Strategically, it also chimes with DT’s eagerness to push open source initiatives that promise to give operators more control over and choice in their infrastructure investments, such as OpenStack, Telecom Infra Project, and the ORAN Alliance. The underlying Access 4.0 technology is thought to have at least partly originated from the Open Networking Foundation’s Central Offices Re-architected as Datacentres programme.

Like other ‘open‘ technologies, however, the Access 4.0 project has not been quick to come to fruition – contrasting with the Group’s bullish language, and the speed-to-market promise of these community-based initiatives. Access 4.0 is believed to stem back to at least 2016, and to have seen small-scale trials in Frankfurt during 2017, but DT appears to have required significant time to settle on an approach to commercial rollout, and to assemble a partner team in step with its vision. Even now, in its latest missive, the Group appears tentative, saying the rollout of the new platform in 2020 will “slowly start” with “pilot sites” within TDE’s network. It remains quiet on the scope and ambitions of the initial offering.

Access 4.0‘s off-base nature may well explain the time it has taken DT to gestate the programme, and seems likely to have narrowed partner options. It is tied with supply chain transformation concepts DT has in recent years assumed from the automotive industry, such as design-to-cost – as well as increased enthusiasm for use of fresh technologies and techniques such as merchant silicon and bare-metal hardware. Claudia Nemat, Head of Technology & Innovation, has presented Access 4.0 as promising to “disrupt the OEM ecosystem”, and DT continues to stress intent to make the technology available to other carriers, which will “increase competition on the supplier side”, as well as producing capital and operating expenditure savings for vendors’ operator customers. “The way how network departments will work in the future will change significantly”, declared the Group, boldly. “Software and [IT] are faster than traditional, chassis-based network technology. While such classic network equipment required weeks, months, or even years to be deployed, software and IT can be rolled-out almost instantly and globally”, it added.

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