Deutsche Telekom (DT) looked to be seeking insurance against rising risk in its European heartland with an ostensibly unplanned, mid-financial-year rejig of the responsibilities of its Board of Management.

The reshuffle, announced on 30 June 2016, mainly revolves around changes to the duties of Europe and Technology Chief Executive (CEO) Claudia Nemat. The former McKinsey & Company executive, who had held the awkward-looking twin-brief at DT since joining the Group in 2011 (Deutsche Telekomwatch, #1).

Nemat has now relinquished the troublesome Europe role, and taken on leadership of another combined Board of Management department melding her existing Technology area with the Group’s Innovation functions. These have been overseen, till now, by Niek Jan van Damme, Chairman & Managing Director of Telekom Deutschland (TDE), and include recently rejigged product development division Innovation+ (Deutsche Telekomwatch, #53) and its hub:raum (incubation and startup investment) and Telekom Innovation Labs (research and development/R&D) units.

DT did not immediately identify Nemat’s Europe successor – just indicating that the new hire was, firstly, male; and, secondly, arriving from outside the Group’s core operations, with revelation held back “at the request of his previous employer”. “He will bring internationality and a market focus to the table – he knows the industry and the company”, DT added.

The new hire was subsequently revealed to be Srini Gopalan, Consumer Director at India’s largest telco, Bharti Airtel.

Gopalan lured from India to Europe

In a leftfield move, Deutsche Telekom confirmed that it had lured relatively unknown Srini Gopalan from Bharti Airtel, to head its Europe region. He will arrive in October 2016, and formally take over regional responsibilities at the start of 2017. Gopalan currently oversees the Consumer segment at India’s largest telco, which, like multiple DT NatCos, is a fierce domestic rival of Vodafone.

Understood to be an Indian national, in his late-forties, Gopalan had over ten years’ experience in the UK prior to joining Airtel in 2013, having held local senior roles at Vodafone (2010-13, Consumer segment director), T-Mobile (2009-10, including Chief Marketing Officer), and Capital One (1999-2009). Before that, he worked for Accenture and Unilever India.

It is unclear just why Gopalan was considered the best choice for this major and challenging role, but his marketing and sales experience in the consumer segment do seem to hold particular appeal to DT, which could point to a shift of leadership gravity away from now increasingly-shared network, IT and common functions. Indian telcos are considered by some to represent best practice for operating flexible, innovative and low-cost business models at scale that embrace outsourcing, with the country’s 23 highly competitive licence ‘circles’ having correlation with regional NatCos. This could align with DT’s evolving vision for Europe operations, perhaps not dissimilar to (or even prompted by) Vodafone’s tendency to rotate executive fresh blood into Europe from its African and India OpCos. One question is whether Europe under Gopalan will be backed by any increase in investment.

  • Bharti Airtel has around 250 million subscribers in India, with average revenue per user (ARPU) in the region of INR 200 (EUR2.30), compared to approximately 50 million subscribers across DT’s Europe region NatCos (where ARPU ranges EUR4-EUR22).

Langheim moving on up

A further Board of Management change is the promotion of mergers and acquisitions (M&A) lead, Head of Group Corporate Development Thorsten Langheim.

His accession to the top team makes it an eight-person group (before addition of the new Europe head), and essentially firms up his job as senior overseer of key Group investments such as BT Group, T-Mobile US (TMUS), and the array of private equity, venture capital, and internal spin-off relationships managed by the new Deutsche Telekom Capital Partners division.

Although Langheim had become increasingly high-profile, Group CEO Timotheus Höttges appeared to hold Board of Management responsibility for these areas, previously.

A sensible future-proofing move…

DT’s statement on the switches painted them as orderly, sensible, and strategically-minded – noting that they will give Langheim a strengthened “remit within the company”, as well as a say in Board of Management decisions; while handing Nemat “end-to-end responsibility” for Technology & Innovation strategy at a time when DT remains enmeshed in a huge, under-the-hood overhaul of its network and IT infrastructure (Deutsche Telekomwatch, passim).

There is certainly some logic in the decision to give the previously floating Langheim more internal heft, and bridge the divide between Nemat’s Technology & Innovation functions – which emerged following the messy departure of ex-Chief Technology & Innovation Officer Edward Kozel in 2011, and Höttges predecessor René Obermann’s associated keenness to liven up his role by getting hands-on with Kozel’s Innovation brief (Deutsche Telekomwatch, #5).

It appears likely that the creation of Nemat’s new twin mandate has been motivated by leadership eagerness to extend and strengthen the service platform standardisation and consolidation she has been conducting via her flagship Pan-European Network (PANNET) programme in Europe – particularly into the Group’s innovation and R&D functions, which is something Kozel ostensibly failed to deliver.

This role as DT’s ‘repeatability tsar’ could also extend more broadly – perhaps even into T-Systems, which itself is in the midst of a change programme geared towards giving it a more efficient and standardised product portfolio. While fuzzy in meaning, the wording of the Group’s statement appeared to suggest Nemat will have some power over T-Systems’ Telekom IT unit, which is responsible for internal infrastructure and services provision. The release read that Nemat’s mandate shift is seeing the “consolidation of Telekom internal IT activities, innovation, and technology”, but did not mention how this sits with the duties of T-Systems CEO Reinhard Clemens.

… but also a reactive one

Behind the veneer, though, it is doubtful whether the reorganisation was a natural, long-planned move, and lingering questions over the logic of how top executives’ fiefdoms are allotted suggest it was not merely a prudent organisational tidy-up.

The decision’s timing is notable, for example – coming only six months after DT handed Nemat a five-year renewal of her twin, Europe and Technology mandate (Deutsche Telekomwatch, #51). It also came the week after the UK’s tumultuous Brexit vote, and accompanying concerns over the knock-on impact for DT’s Europe and Germany segments – as well as coinciding with gathering up of NatCos’ Q2 FY16 performance figures, which DT is due to publish in early-August 2016.

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Smart Attacker morphs to TMUS-inspired Mobile First

There have also recently been signals that DT has seen a need for change in approach in the Europe segment, and that top management has tired of its inability to regain anywhere near full power – and alleviate the awkward scenario DT finds itself in, where strategy is Europe-centric, but growth is driven by the USA.

The move, for example, comes after the introduction of a new strategy and management team at key problem-NatCo T-Mobile Netherlands (TMNL), and greater Group willingness to adopt commercial ideas from resurgent TMUS. This is something on which Nemat had previously indicated a level of resistance, declaring in early-2015 that TMNL was not pursuing a TMUS-like “maverick strategy” (Deutsche Telekomwatch, #41).

In mid-June 2016, TMNL Chief Executive Mark Klein was flagged to be due to leave the OpCo in September 2016, as it enters a new “phase” of transformation, focused on a Mobile First strategy “inspired by T-Mobile USA”. Previously, the Dutch NatCo was pushing a “Smart Attacker”-branded challenger approach devised by Nemat (Deutsche Telekomwatch, passim).

Relatedly, T-Systems now appears to be taking on learnings from the success story of TMUS’s Un-Carrier go-to-market approach, recently adding more flexible, Un-Outsourcer arrangements for clients of hosted SAP services to its website.

On the Technology side, there could also be recognition of a need to nail down greater insurance and focus, following recent signals of Höttges’ concern over the rising pressure on DT to become more fibre-led, via its Integrated Networks Strategy; and with the long-vaunted PANNET still to prove itself ahead of its upcoming debut in the July 2016-September 2016 quarter (Deutsche Telekomwatch, #51 and #53).

IT flashpoints?

The new alignment is also not totally devoid of areas for potential bottlenecks or internal ructions.

It was clear from DT’s statement that Nemat – who is DT’s highest-paid Board of Management member, aside from Höttges – will retain a lot of power in her new, Technology & Innovation role. It ostensibly confirmed she will retain direct oversight of infrastructure developments within both Germany, via TDE and DT Chief Technology Officer Bruno Jacobfeuerborn; and Europe, having put in place in-country Chief Technology & Innovation Officers to oversee PANNET, while in charge of the division (Deutsche Telekomwatch, #41 and passim).

While this could be a transitional arrangement, it clearly continues to place a large chunk of decision-making power out of the reach of van Damme, in Germany, as well as the new Europe CEO.

Legere still at arm’s length, despite restructure

A yet further area of interest from the realignment is the ongoing decision not to bring TMUS CEO John Legere into the Board of Management, despite the US operator’s position as DT’s star performer since his appointment in 2012, and the tempting conclusion that DT needs greater input from the American, or a Legere Mk II, to revive performance in Europe (Deutsche Telekomwatch, #13 and passim).

Instead, DT’s decision to keep the status quo serves to reaffirm TMUS’s role as an ‘outboard’ growth engine within the Group, as well as emphasising the Group’s openness to a ‘kingmaker’ M&A solution for the NatCo.

Also of note is that the reshuffle has not touched Thomas Kremer, Head of Data Privacy, Legal Affairs & Compliance at DT, despite investigations into his actions while at previous employer ThyssenKrupp (Deutsche Telekomwatch, #52).

Image: Stephen G. Barr/Flickr.com

About

About Deutsche Telekomwatch

Report: #54
Covering: July 2016
Published: July 2016
Next report: August 2016
For more information visit: Deutsche Telekomwatch

Table of Contents

Executive brief
5 Group
6 M&A
10 People
16 Partnerships
22 Technology & innovation
24 Germany
25 Network
25 Legal and regulatory
27 Products and services
29 Europe
30 Austria
30 Macedonia
33 Poland
34 Croatia
34 Greece
34 Slovakia
35 Netherlands
36 Systems Solutions
37 Contracts
37 Network
39 USA
40 Network
40 Partnerships
41 Products and services
44 Further reading
47 Index

Index

A

Accel Partners 14
adidas 19
Amdocs 15
– OpenMarket Inc. 15
Americas
– North America 15
– South America 7
– United States of America (USA) 6, 8, 11, 13, 14, 15, 17, 33, 36
– – Federal Communications Commission (FCC) 35
– – Securities & Exchange Commission (SEC) 13
– – States
– – – Califormia 15, 19
– – – Pennsylvania 34
– – – Philadelphia 34
APG app publishing 18
AppDirect 18
Apple 30, 36
– iOS 24
– Mac OS 24
Asia-Pacific
– India 17
– South Korea 17
Atos 18
– Unify Software and Solutions 18
AT&T 36
audriga 18

B

Bango 15
– BilltoMobile 15
Blackstone Group 8
Boku 15
BOKU Inc. 15
BroadSoft 29, 30
BT Group 10, 13

C

CeBIT 32
Cegeka Group 29
CenturyLink Inc. 17
Cinven 8
Cisco Systems 18, 29, 32
Citrix Systems 29
ClearPath Networks 18
collaboration Factory 18
Comcast Corp. 14
Cosmote Romanian Mobile Teleco. SA (see OTE/DT)
– Iskos, Lampros 13
Crown Castle International Corp. (CCI) 7

D

Dell 14, 29
Deutsche Telekom 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 18, 19, 20, 22, 23, 24, 26, 27, 28, 29, 30, 32, 34, 35, 36
– Deutsche Telekom Capital Partners 10, 13, 14, 16
– – Deutsche Telekom Strategic Investments 16
– – DocuSign (see separate) 14, 16
– Europe
– – Austria 26
– – Croatia (Hrvatski Telekom) 13, 27, 29, 30
– – – MaxTV 30
– – Czech Republic 15, 27, 35
– – Greece (see OTE) 35
– – Hungary (see Magyar Telekom) 26
– – International Carrier Sales & Services (ICSS) 14
– – Montenegro (see Magyar Telekom) 30
– – Netherlands 11, 13, 26, 27, 30, 35
– – Poland (Polska Telefonia Cyfrowa/PTC) 28
– – Slovakia (Slovak Telekom/T-Mobile) 27, 29, 30, 35
– Executives
– – Angst, Roland 13
– – Arnold, Heinrich 20
– – Christopoulos, Grigoris 13
– – Clemens, Reinhard 9, 10
– – Dannenfeldt, Thomas 7, 9
– – Dijkman, Freddy 13
– – Gunther, Kerstin 13
– – Hischke, Sven 13
– – Höttges, Timotheus 9, 10, 22, 26
– – Jacobfeuerborn, Bruno 11, 36
– – Kind, Marco 13
– – Klein, Mark 11, 13
– – Knauer, Martin 13
– – Kral, Otakar 13
– – Krellner, Jan 13
– – Kremer, Thomas 9, 11, 23
– – Langheim, Thorsten 9, 10, 13, 16, 17
– – Legere, John 11
– – Maierhofer, Andreas 26
– – Morgan, Michael 13
– – Muller-Berg, Michael 13
– – Müller, Klaus 13
– – Nebis, Kostas 13
– – Nemat, Claudia 9, 10, 11, 13, 17
– – Osvaldik, Peter 13
– – Ray, Neville 35
– – Rubas, Michael 13
– – Smit, Kobus 36
– – van Damme, Niek Jan 9, 22
– – Vento, Vicente 14, 16
– – von Reventlow, Christian 17
– – Young, Jack 15, 16
– Ex-executives
– – Kozel, Edward 10
– – Obermann, Rene 10
– – Zamani, Phil 18
– Ex-Executives
– – Arora, Nikesh 13
– Germany 7, 9, 11, 13, 15, 18, 22, 30, 35
– – Congstar 13
– – Strato 8, 16, 18
– – T-Online 16
– Investments
– – Magyar Telekom (see separate) 26, 27
– – OTE (see separate) 13, 29, 30
– Product and Innovation
– – hubraum 9, 17, 19
– – Telekom Innovation Laboratories (T-Labs) 19, 20
– Products and services
– – Business Marketplace 18
– – Direct Carrier Billing 15
– – Enterprise Marketplace 18
– – iMeet 18
– – Scout24 8, 16
– Systems Solutions 6, 9, 31
– – Telekom IT 10
– – T-Systems 9, 10, 11, 13, 14, 18, 30, 32
– T-Mobile International 13
– USA 7, 10, 11, 13, 15, 27, 34, 35, 36
Deutsche Telekom Capital Partners 14, 15, 16, 17
– Deutsche Telekom Strategic Investments 16
DocuSign 14, 16
Drillisch AG 8

E

eBay 15
– PayPal 15
Electronic Arts Inc. (EA) 15
– EA Mobile 15
EMC 29
– VMware 18
Ericsson 26, 27, 35
– Croatia (see Ericsson Nikola Tesla) 27
Europe
– Albania 26, 36
– Austria 8, 26
– Belgium 29
– Croatia 29
– Czech Republic 7
– Estonia 15
– France 8
– Germany 6, 7, 8, 9, 10, 11, 13, 17, 18, 19, 21, 23, 32, 36
– Greece 13, 29
– Italy 8
– Macedonia 26, 27, 30
– Montenegro 26
– Netherlands 7, 11, 13, 30
– Poland 7, 8, 17, 28
– – Urząd Komunikacji Elektronicznej (UKE) 28
– Romania 8, 13, 26, 27, 36
– Serbia 26
– Slovakia 27, 29, 36
– Spain 7, 8
– Switzerland 8
– United Kingdom (UK) 8, 10
European Union
– European Commission 29
– European Parliament 22

F

FastBill 18
forcont business technology 18
Fortumo 15
France Télécom
– Orange 7, 26, 28
– – Poland (see Telekomunikacja Polska) 7
Fraunhofer Institute 23

G

Gameloft 15
Goldman Sachs 6
Google 13, 14, 15, 30, 34, 36
– Android 24
GSM Association
– Mobile World Congress 17, 20, 36
GSM Association (GSMA) 36

H

Hellman & Friedman 8
High Tech Computer Corp. (HTC) 36
Host Europe Group 8, 16
Hrvatski Telekom (see DT, Croatia) 13, 27, 29, 30
– Combis d.o.o. 29
Huawei Technologies 27, 32, 35

I

Intel 14, 19
– Intel Capital 14
IQUADRAT 18

J

JIBE Inc. 36
Joost N.V. 19

K

Konica Minolta 26
KPN
– E-Plus 7

L

Lenovo 29
LG Electronics 36

M

Magyar Telekom (see DT) 26
– Macedonia (Makedonski Telekom/T-Mobile) 26, 27, 30
– Montenegro (Crnogorski Telekom) 30
Major League Baseball 35
Market segments
– Machine-to-machine (M2M) 26
– Mobile virtual network operator (MVNO) 34
– Multinational corporations (MNCs) 17
McKinsey & Co 9
MetroPCS Communications Inc.
– Carter, Braxton 13
Microsoft 14, 18, 29, 36
– Skype 36
– Windows Phone 15
Middle East
– Israel 14, 15, 17
mopay 15
Morgan Stanley 6

N

Nexmo 14
Nokia 35
Norwest Venture Partners 14

O

Open Handset Alliance (OHA)
– Android 24
Oracle 29
Orchestration Inc. 18
OTE (Hellenic Telecom. Org. SA, see DT) 13, 29, 30
– Cosmote 35
– – Greece 35

P

P4 sp. z o.o. (Play) 28
Payfone Inc. 15
Perceptive Software Deutschland 18
PGi 18
Phoenix Tower International 7
Premiere AG 18
projecterus 18
provantis IT Solutions 18

Q

Qualcomm 15, 35

R

rankingCoach 18
Red Hat 18, 29
Reliance-Anil Dhirubhai Ambani Group
– Reliance Communications (RCom) 17

S

Sage 18
Salesforce 18
Samsung 14, 34, 36
SAP 11, 15
Seneca Business Software 18
Silver Lake 13
Singapore Telecom 14
SK Telecom 17
Slovak Telekom (see DT, Slovakia) 27, 29, 30, 35
SOFTBANK CORP. 13
Sony Corp. 15
Sprint Nextel 13, 34, 36
Stonebridge Technologies 27
StoneOne 18

T

TecArt 18
Technology
– 2G
– – GSM 36
– 3G
– – Evolved HSPA (HSPA+/I-HSPA) 34
– – HSPA 34
– 4G 28, 30, 34
– – Long Term Evolution (LTE) 30, 34, 35
– 5G 7, 20, 22
– BSS 27
– CRM 18
– Fibre 11, 34
– IM 29
– IP 26, 27, 29, 30
– LAN 32
– Linux 24
– M2M 26
– OSS 27
– Personal computer 30
– R&D 9, 10, 14, 19
– SaaS 18
– SIM 26, 34
– Smartphone 20, 30, 34
– Spectrum 35
– – 700 MHz 34, 35
– – 800 MHz 28
– – 1900 MHz 34, 35
– – 2100 MHz 35
– – 2600 MHz 28
– – Advanced Wireless Spectrum 34
– WAN 19, 20, 32
– Windows 15, 24
– W-LAN 35
Tele2 7
– Netherlands 7
Tele Columbus 8
Telecom Italia 7
Telefónica Group 7
– Europe
– – Czech Republic 7
Telekom Austria 27
– Austria
– – A1 28
Telekom Slovenije
– ONE 27
Telekom Slovenije, d.d. 27
Telstra 14
ThyssenKrupp AG 11

U

UniSystems 29
United Internet 8
– 1&1 Internet 8
– Versatel 8
United States Cellular Corp. (US Cellular) 34

V

Value-added services 35
Verizon Communications 36
– Verizon Wireless 36
Vodafone 13, 30
– Europe Region
– – Germany 30
– – Greece 13

W

weclapp 18
Wells Fargo 34
WeSustain 18
WhatsApp Inc. 36
Wice 18
WICE 18

Y

yQ-it 18

Z

ZTE Corp. 36