Thomas Dannenfeldt, Chief Financial Officer (CFO) of Deutsche Telekom (DT), reasserted Group plans to raise cash via a rejig of German tower arm Deutsche Funkturm – while also indicating that earlier reports suggesting the business was set for an autumn 2016 spin-off were wide of the mark.

Dannenfeldt – who has been hinting at planned changes at Funkturm since 2015 (Deutsche Telekomwatch, #47, #51, and #54) – stated that maintenance of the division in its current format was “unlikely”, but played down the prospect of an imminent move.

Behind-the-scenes tower optimisation planned

The CFO referred to the review of the business as an “ongoing process”, adding that “we don’t feel in a hurry”. He also indicated that DT ideally wanted to perform “a lot of optimisation” within Funkturm before bringing in any new partner, in order to maximise its value. While he did not expand on these rationalisation plans, they may well relate to assimilation of the 7, 700 cell sites Telekom Deutschland (TDE) agreed to take on from Telefónica Deutschland in 2015, as part of network restructuring by the latter following its 2014 merger with E-Plus (Deutsche Telekomwatch, #44).

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Dannenfeldt went on to intimate that some Europe segment tower assets could form part of any future deal involving Funkturn.

“ The key question is [whether there is] additional value we can get out of that business by managing it differently and handling it differently, because we have the German towers [and] we have, by the way, some assets as well in the European countries additionally. We’re using [Funkturm] more like a workbench for tech than as a dedicated optimised tower portfolio. And so we think there is value we can get out of a different way of handling the business, whether it’s then a listing or a sale or [the] status quo… ”

“ My guess is [maintenance of the] ‘status quo’ is unlikely, because we believe we can do better and more. A sale is unlikely, as well, because we believe there is lot of optimisation we should go for in the first instance… We’re looking into that and then after we conclude… what we believe is the best way forward, we will talk about it… ” – Dannenfeldt.

As noted previously, a sale of Funkturm would allow DT to raise cash at a time funding has been coming under greater pressure from elevated expenditure in Germany and the USA – although Dannenfeldt insists the main benefit would be to unlock increased “value” for Group operations enabled by the tower business. However, there would be inherent risks in relinquishing control over parts of its infrastructure, and taking on a new partner. A further factor in DT’s caution could be that many European peers are simultaneously pushing through tower asset divestments, potentially limiting DT’s options and returns.

  • Formed in 2002, Deutsche Funkturm currently supports TDE by operating around 27, 000 broadcasting- and telecoms-oriented sites from its Münster headquarters and ten regional offices throughout Germany. The sites are also marketed to rivals from the media and telecoms sectors, although levels of internal and external revenue remain unclear.

Image: Les Chatfield/Flickr

About

About Deutsche Telekomwatch

Report: #56
Covering: September 2016
Published: September 2016
Next report: October 2016
For more information visit: Deutsche Telekomwatch

Table of Contents

Management update
6 DT seeks to refresh in Germany and Europe as sales drop
7 Headline data: On target, but lop-sidedness a rising worry
8 Results across regions: two-track progress
10 Spend: capex throttle opened wider; 5G now on radar
10 Guidance: US-led Plan A still on, despite knocks
Corporate Development
14 Deutsche Funkturm reboot still on
14 Behind-the-scenes tower optimisation planned
Technology & Innovation
17 Trio of demos flagged as DT eyes “Gigabit-class” mobile
17 DT still to reveal when it will go Pro
18 DT battling to be seen as the Gigabit provider
19 Satellite launch delay unsettles EAN plan
19 Red tape issue
20 Competition coming
22 QIVICON ecosystem expands at home and abroad
23 Touch Home Base 2.0 released
23 More products on way
Q2 FY16
25 TDE seeks to up commercial game on broadband/TV
26 Adding up
27 DT leadership wants some payback
Strategy
28 Höttges gets defensive again on fibre plan limitations
28 Fibre-to-the-home? Meh
30 TDE enters broadband price war with EUR19.95 offer
Partnerships
31 TDE ends zero-rated Spotify deal
31 Apple joins partner line-up
Q2 FY16
34 Waiting for Gopalan: Europe decline goes on
35 “Internationalisation” a new buzzword at DT
35 Dutch malaise mars the numbers
Croatia
37 Redknee completes HT charging revamp
37 BSS revamps continue
Hungary
38 MT beefs up fixed broadband networks
Poland
39 TMPL and Orange review NetWorkS! after spectrum wins
39 Tower rejig also linked in
Slovakia
40 ST enlists Continuity Software on IT resilience
Q2 FY16
43 Scrutiny building as T-Sys turnaround effort drags on
44 Cloud push flourishing — DT
44 T-Sys future remains blurry
Contracts
45 Autobahn tolls business expands to Austria
Network
46 T-Sys entering challenging period on All-IP Migration
46 Europe past halfway; but B2B a drag
Partnerships
47 Apinauten partnership boosts T-Sys’s PaaS capabilities
Products and services
48 T-Sys widens Open Telekom Cloud with MySQL options
Q2 FY16
50 DT continues to stoke Un-Carrier growth engine
50 Churn focus working
51 Feeding the beast
People
52 Legere’s pay nearly four times greater than Höttges’s
52 Fatter pay packets stateside
Commercial
54 Backlash hits TMUS “unlimited” data expansion
55 Changes follow outcry
55 EFF hostilities recommence
55 Network impact
Network
56 TMUS all quiet on the 5G spectrum front
57 Pauses for thought
58 Credit where credit’s due?
59 Testing, testing: Obama’s advanced wireless initiative
60 5G on trial
60 Verizon 5G? Are you sure?
61 TMUS steps up pressure for LTE-U progress
62 In bed with Nokia
62 Testing times
Partnerships
63 Novatel, Sequans back TMUS’s emerging IoT play
63 Sequans deal takes TMUS into 4G-based IoT
64 Twilio, another recent IoT partner, cites innovation potential with TMUS

Index

Symbols

3rd Generation Partnership Project (3GPP) 18, 23

A

Air France 38
Alfred Karcher 23
Alior Bank 40
Amazon.com Inc. 48
Amdocs 37
Americas
Brazil 16
– Canada 37
– United States of America (USA) 7, 10, 11, 15, 23, 49, 51, 58, 59, 61
Federal Communications Commission (FCC) 55, 56, 57, 58, 60, 61, 62
– – government 57, 58
– – Government 59
– – Securities & Exchange Commission (SEC) 52
– – States
Califormia 47
– – – Florida 19
– – – New Jersey 60
– – – New York 40
Apigee Corp. 16
Apple 31, 38, 58, 59
Asia-Pacific 17
Australia 31
– China 15, 63
– India 17
– Japan 38
– Singapore 17, 38
– South Korea 23, 60
AT&T 11, 23, 50, 52, 54, 58, 59, 64

B

Bharti Group 6, 35
Bharti Airtel 6, 34, 35
BMW 20
Boingo Wireless 62
Broadcom 62
BT Group 44, 58
BT Global Services 44
– EE 31
Bundesliga 30

C

CeBIT 47, 48
Choice (Australia) 55
Columbia Capital 17
Comcast Corp. 58, 61, 62
CommScope Inc. 59

D

Daimler AG 45
Dell 52
Deutsche Telekom 6, 7, 8, 9, 10, 11, 14, 15, 16, 17, 18, 19, 20, 22, 23, 25, 26, 27, 28, 29, 30, 31, 34, 35, 36, 37, 38, 39, 40, 43, 44, 45, 46, 47, 48, 50, 51, 52, 54, 55, 56, 60, 61, 62, 63, 64, 66
Corporate
Headquarters 15
Deutsche Telekom Capital Partners 14
Deutsche Telekom Strategic Investments 14
SafeBreach (see separate) 14
Europe 34, 35, 36
Austria 8, 16, 35, 37
– – Croatia (Hrvatski Telekom) 16, 37
– – Czech Republic 37
– – Greece (see OTE) 18
– – Hungary (see Magyar Telekom) 7, 8, 34, 35, 38, 48
– – International Carrier Sales & Services (ICSS) 38
– – Montenegro (see Magyar Telekom) 16, 37
– – Netherlands 8, 35, 37, 38, 39
– – Poland (Polska Telefonia Cyfrowa/PTC) 8, 16, 18, 39, 40
NetWorkS! 39
Slovakia (Slovak Telekom/T-Mobile) 16, 18, 37, 40
– – UK (EE) 31
European Aviation Network 19
– Executives
Brnjac, Goran 16
– – Clemens, Reinhard 52
– – Dannenfeldt, Thomas 9, 14, 35, 44, 46, 52
– – Höttges, Timotheus 6, 17, 26, 28, 35, 52, 60
– – Jacobfeuerborn, Bruno 18, 23
– – Kedzierski, Piotr 16
– – Kremer, Thomas 52
– – Kschwendt, Karin 16
– – Legere, John 9, 52, 54, 58, 60, 64
– – Lips, Thomas 39
– – Molefe, Dineo 16
– – Nemat, Claudia 22, 35, 52
– – Ray, Neville 55, 60
– – Rubim, Camillo 16
– – Sievert, Mike 54, 55, 58
– – Sylla, Marie 16
– – von Reventlow, Christian 23
– – Zekovic, Milija 16
Ex-executives
King, Gary 16
– – Naidoo, Aneshree 16
Germany 6, 7, 8, 9, 10, 14, 15, 17, 18, 22, 23, 25, 26, 27, 28, 29, 30, 31, 46, 48
– Investments
Magyar Telekom (see separate) 7, 8, 34, 35, 38, 48
– – OTE (see separate) 8, 20, 35
Product and Innovation
Telekom Innovation Laboratories (T-Labs) 23
Products and services
Binge On 51, 55
– – Entertain 27, 30
– – MagentaEINS 26
– – MagentaZuhause 30
– – QIVICON 22, 23
– – Wi-Fi Mobilize 38
Systems Solutions 7, 8, 10, 11, 34, 35, 42, 43
Telekom IT 43, 44
– – Toll Collect GmbH 45
– – T-Systems 8, 9, 14, 16, 43, 44, 45, 46, 47, 48, 52
South Africa 16
– – – Telekom Security 14
Technology
BNG (Broadband Network Gateway) 29
USA 6, 7, 9, 11, 16, 23, 35, 50, 51, 52, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64
Deutsche Telekom Capital Partners 14
Dropbox 31

E

EADS / Airbus 20
Electronic Frontier Foundation 55
Elisa 18
Energie Baden-Württemberg AG 23
Ericsson 18, 23, 37, 38, 60, 62
Europe
Austria 22, 36, 45
– Belgium 43, 45
– Croatia 22, 36, 37, 46
– Czech Republic 22, 36
– Finland 18, 62, 63
– France 17, 19, 22, 45, 64
– Germany 6, 7, 8, 10, 11, 14, 15, 17, 18, 20, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 39, 45, 46, 47, 48, 51, 52
Bundesnetzagentur für Elektrizitat, Gas, Telekommunikation, Post und Eisenbahnen (BNetzA, RegTP, FNA, or German Federal Network Agency) 29
– – Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen (BNetzA, RegTP, FNA, or German Federal Network Agency) 29
Greece 20, 35, 36, 46
– Hungary 7, 8, 23, 34, 35, 36, 38, 46
– Italy 22
– Macedonia 46
– Montenegro 46
– Netherlands 22, 34, 35, 36, 38, 39
– Norway 20
– Poland 16, 17, 36, 39, 40
UKE 39
Romania 22, 36, 40, 46
– Slovakia 17, 36, 40, 46
– Sweden 16, 18, 38
– Switzerland 20, 48
– United Kingdom (UK) 16, 31, 37, 44
European Union 17, 19, 20, 23, 48
European Commission 19, 29
Eutelsat Communications 20
Evernote Corporation 31

F

Facebook 58
France Télécom
Orange 15, 39
Poland (see Telekomunikacja Polska) 39
– – UK (see EE, DT) 31

G

Google 16, 38, 48, 58, 59
GSM Association
Mobile World Congress 18, 23
GSM Association (GSMA) 60

H

Hewlett-Packard 14
High Tech Computer Corp. (HTC) 59
Hrvatski Telekom (see DT, Croatia) 16, 37
Combis d.o.o. 16
Huawei Technologies 17, 18, 23, 38, 48, 63

I

Inmarsat 19, 20
Intel 59
Inter IKEA Systems B.V.
Family Mobile (UK) 54
International Airlines Group SA
British Airways 38
International Court of Arbitration 17
iPass Inc. 38

J

Japan Airlines 38
J.D. Power and Associates 54
Juniper Networks 47, 59

K

Karcher 23
KPN 22, 39
E-Plus 14

L

LG Electronics 58
Liberty Global Inc. 30
Unitymedia GmbH 26, 30
– UPC Broadband
Germany (Unitymedia) 26, 30
Logitech International SA 23
Lufthansa 20, 38

M

Magyar Telekom (see DT) 7, 8, 34, 35, 38, 48
Montenegro (Crnogorski Telekom) 16, 37
– T-Systems Hungary 8
Market segments
Mobile virtual network operator (MVNO) 39, 54
– Over-the-top (OTT) 31, 38
MetroPCS Communications Inc. 11, 60
Carter, Braxton 54
Microsoft 48, 58, 59
Middle East
Israel 14, 23, 46
Miele & Cie. KG 23
Mobile One (Singapore) 51

N

National Instruments 59
NEC 37
Netatmo 23
Nexmo 14
Nielsen Company, The
Nielsen Mobile 54
Nokia 18, 20, 23, 58, 59, 60, 62, 63
Novatel Wireless 63
Numerex Corp. 64

O

OpenCloud 37
Openet 37
Optima Telekom 37
Oracle 59
Osram 23
OTE (Hellenic Telecom. Org. SA, see DT) 8, 20, 35
Cosmote 18
Greece 18

P

P4 sp. z o.o. (Play) 39
Philips 23
Polkomtel 39
Providence Equity Partners
KDG Holding GmbH (Kabel Deutschland) 26, 30

Q

Qualcomm 18, 23, 58, 59, 62

R

Red Hat 47
Redknee 37
Research In Motion 58
BlackBerry 58
RootMetrics 54

S

SafeBreach 14
Samsung 23, 58, 59, 60, 63
SAP 44, 45, 48
SAS Institute Inc. 48
Sequans 63, 64
Sequoia Capital 14
SES S.A. 20
SK Telecom 23
Slovak Telekom (see DT, Slovakia) 16, 18, 37, 40
Sonos 23
Spotify Ltd 31
Sprint Nextel 16, 52, 59
Swisscom 18

T

Target Corporation 11
Technology
2G 54, 64
GSM 64
3G 55
Evolved HSPA (HSPA+/I-HSPA) 60
MIMO 17, 18
HSPA 60
4G 18, 60, 63, 64
Long Term Evolution (LTE) 10, 17, 18, 20, 39, 54, 55, 61, 62, 64
5G 10, 18, 23, 35, 56, 57, 58, 60
– BSS 37
– DSL 26
– Ethernet 45
– Fibre 8, 27, 28, 29, 38, 39, 56
– FTTH 27, 28, 29
– GPON 28
– IP 8, 10, 23, 27, 35, 38, 46
– LAN 47
– LBS 64
– M2M 27
– MPLS 45
– OTA 20
– Personal computer 38
– R&D 23, 59, 62
– RF 56
– SIM 64
– Smartphone 38
– Spectrum 18, 39, 56, 57, 58, 59, 60
800 MHz 39
– – 1800 MHz 18
– – 2100 MHz 18
– – 2600 MHz 18, 39
ultra-low energy (ULE) 23
– VDSL 8, 27, 29
– VPN 45
– W-LAN 20, 38, 47, 61, 62
Tele Columbus 30
Telefónica Group 14, 64
Telekom Slovenije
ONE 54, 55
Telstra 18, 31, 64
Thales Group 19
Time Warner
AOL 58
Trio 17

U

United Internet 26

V

Value-added services 36, 56
Verizon Communications 52, 58, 59, 60, 62, 64
Verizon Wireless 62, 64
McAdam, Lowell 52
VINCI Group
Cofiroute, S.A. 45
Vodacom Group 16
Group 16
Vodafone 16, 18, 20, 30, 36, 39, 64
Africa, Middle East, and Asia Pacific Region (AMAP)
India 6, 35
– – South Africa (see Vodacom) 16
Europe Region
Germany 30
– – Netherlands 36, 39

W

Wal-Mart Stores Inc. 54
Wells Fargo 60

Z

Zagrebacka banka 37
Zesko Holding BV (Ziggo) 36
ZTE Corp. 15