Deutsche Telekomwatch Report #6 December 2011-January 2012 Executive Brief
1 February 2012
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- GROUP: Deutsche Telekom bowed to the inevitable and abandoned efforts to secure clearance for the $39bn mega-merger of T-Mobile USA and AT&T, knocking recent Group strategy back by a year, or more; and turning attention onto whether management will now ‘stick or twist’ with its challenged American OpCo. The rumour mill remained split over whether DT will now pursue a sale to another, less powerful competitor, or offload assets, either in Europe, or the USA, to fund an aggressive new push to cancel out TMUS’s “investment overhang”. [pp.4-6.]
- Oddly, despite these strategic challenges, the Group decided not to seek a direct replacement for recently departed Chief Technology and Innovation Officer, Edward Kozel, and will instead divide his responsibilities between Chief Executive, René Obermann, and Head of Europe, Claudia Nemat. [p.7.]
- Thomas Berlemann took over from Bart Weijermars as Chief Executive of T-Mobile Netherlands, as the OpCo seeks a grip on multiple competitive challenges in the country. The move came as the Dutch government confirmed plans to reserve sizeable tranches of spectrum for new entrants in the country’s upcoming multi-band auction, due to take place in October 2012. [pp.8, 27, 28.]
- DT furthered a recently flagged push to revamp its portfolio of consumer Internet Services by teaming with online discount aggregator Groupon on European roll out of the latter’s high-profile daily deals offering. The Group also tied with US mobile video specialist MobiTV on “converged media services”. [pp.10, 12.]
- Group investment arm, T-Venture, remained an active spender, contributing to a financing round in USA-based device maker Jawbone. [p.13.]
- GERMANY: T-Mobile Deutschland was one of two additional OpCos to strike network-sharing deals, as the Group seeks out efficiencies across Europe. The OpCo is to provide backhaul capacity to rival Telefónica Germany, while T-Mobile Austria agreed a 2G/3G national roaming deal with competitor 3 Austria, seemingly replacing the sharing pact it highlighted with Orange Austria in 2011. [pp.14, 15, 17.]
- Telekom Deutschland gained a boost in efforts to dislodge cable rivals’ entrenched housing association relationships, by agreeing a “strategic innovation” tie-up with property group Deutsche Annington. The deal gives the OpCo the opportunity to provide broadband and television services to around 171, 000 households. [pp.16.]
- EUROPE: Activity around LTE continued to bubble away, with T-Mobile Hungary becoming the third Group OpCo to officially introduce the technology, following a previously flagged customer trial in the capital, Budapest. [p.22.]
- T-Mobile Czech Republic also began piloting LTE, in Prague; while UK joint venture, Everything Everywhere, claimed success in its own ongoing trial of the technology, taking place alongside BT Wholesale. On the services side, T-Mobile Croatia began running robotics trials with the University of Rijeka, using its pilot LTE network; and Audi highlighted tests of in-car communications across T-Mobile Deutschland’s LTE infrastructure in Cologne, furthering existing, 3G-based collaboration with the Group. [pp.14, 18, 20, 31.]
- DT’s eastern European investments continue to face disruption and uncertainty, as hard-up regional governments attempt to exploit sales of new and expiring spectrum rights. Romania published proposals to put up for sale, rather than automatically renew, Cosmote Romania and main rivals’ 2G licences, via an auction scheduled for the first half of 2012. Controversy also arose over Hungary’s upcoming 900MHz auction, with state-owned companies setting up a consortium to bid for the new frequencies. [pp.23, 28, 29.]
- DT and Magyar Telekom agreed to make sizeable payments to regulators in the USA, as part of settlements to end long-running, high-profile investigations into bribery allegations in Macedonia and Montenegro. [p.24.]
- OTE continued efforts to boost cash flow, by selling its 20% stake in incumbent Telekom Srbija, and agreeing a deal with unions on a new voluntary retirement programme at its remaining operations. [p.30.]
- Everything Everywhere confirmed a previously mooted mobile wholesale partnership with Chinese CDMA and fixed-line carrier China Telecom, potentially furthering wider efforts by DT to boost ties in the Far East. However, the joint venture received a blow after UK regulator Ofcom dropped plans to reserve 800MHz frequencies for it in the country’s upcoming spectrum auction. [pp.32, 33, 36.]
- SYSTEMS SOLUTIONS: T-Systems continued to highlight cloud services traction with key enterprise partner SAP, flagging customer agreements with: Correos, Spain’s national postal operator, with on-demand IT services from the software provider; and air charter company Jet Aviation. [p.37.]
- USA: DT came under further pressure from labour organisations over representation of its US employees, receiving criticism from the Trade Union Advisory Committee to the Organisation for Economic Cooperation and Development over corporate responsibility claims. [p.38.]
About Deutsche Telekomwatch
Report: #6
Covering: Dec. 2011 to Jan. 2012
Published: January 2012
Next report: February 2012
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