More behind-the-scenes restructuring is understood to have taken place in Deutsche Telekom’s (DT) service development functions, with a radical slimdown of focus and change of leadership.

The Group’s Product Innovation unit has reduced the number of areas where it primarily concentrates from 64 to just five, under a “4+1” strategy enacted following its 2017 transfer to DT’s Technology & Innovation segment, headed by Claudia Nemat (Deutsche Telekomwatch, #52).

The revamp comes amid reports that Group Product & Innovation Officer Christian von Reventlow, the unit’s head, has been replaced by Omar Tazi, a former Orange executive and prolific startup founder. von Reventlow has reportedly been offered a new position within DT, although it is unclear whether he has accepted, and a manager-magazin report suggested he is resisting the move legally.

Product Innovation departments that have folded under the reboot include payments and ereaders, following up the recent cessation of DT’s interests in digital commerce subsidiary ClickandBuy and the ebook-focused Tolino Alliance, respectively (Deutsche Telekomwatch, #50 and #58). Enterprise cloud services — which previously saw development of the Group’s Business Marketplace portal — are also now noticeably absent from the Product Innovation brief.

Alongside the focus refresh, Product Innovation appears to be seeking to become quicker and more agile in how it allocates budget to internal projects, to reflect shorter innovation cycles, including via DT’s corporate entrepreneurship platform UQBATE and Corporate Innovation Fund, set up in 2013.

Clearing the decks

The four main areas where Product Innovation now focuses comprise:

  1. Connectivity — covering access technology innovations, such as Wi-Fi aggregation tool CONNECT.
  2. Digital Customer Care — including “artificial intelligence”-based care and sales developments.
  3. Home — progression of products including the flagship IPTV offering EntertainTV, QIVICON connected-home initiative, and coming Smart Speaker device.
  4. Internet of Things (IoT) — a stream evidently tied in with T-Systems’ emerging “Big IoT” drive (see separate report), as well as NatCo initiatives around Narrowband IoT.

Beyond these four main pillars, Product Innovation has been mandated to pursue more “future”-oriented, 5G-led innovations, such as low-latency applications for automotive and industrial partners.

The unit’s mandate is expected to be reviewed annually.

Déjà vu all over again

Product development is an area where DT has regularly flagged high hopes and stressed willingness to refashion itself internally, to better gestate external partnerships and create service differentiation. However, at the same time, it appears to have had trouble finding the right business formula, and the latest refresh adds to the impression it is still tying things down properly.

At Management Board level, the field of product innovation was, from 2011, overseen directly by DT’s then-Chief Executive (CEO), René Obermann, after a brief (and apparently less than overwhelmingly successful) spell being run by former Chief Technology & Innovation Officer Edward Kozel.

Following Obermann’s departure in January 2013, responsibility was transferred to Telekom Deutschland CEO Niek Jan van Damme, and then at the start of 2017 hived off to Nemat, as part of a wider board responsibility rejig (Deutsche Telekomwatch, #5, #6, #16, #41, and #59).

Shortly after the 2015 arrival of von Reventlow, DT’s product development activities underwent a process of “realignment”. These changes were seemingly designed to make functions more commercially-focused and closely plugged into NatCo requirements. It also saw a renaming of DT’s former Digital Business Unit to “Group Innovation+” — now seemingly dropped in favour of the does-what-it-says-on-the-tin Product Innovation banner (Deutsche Telekomwatch, #41 and #52).

The latest reorganisation echoes many of the key ambitions highlighted following the 2015 reset — such as pursuing the “right” projects and ideas, and collaborating more effectively with partners and NatCos.

Image: Deutsche Telekom.

Table of Contents

EXECUTIVE BRIEF

Q4 FY17

Management update

DT nails headline aims but still has unfinished business [p6]

  • Dannenfeldt exit allows another board tweak
  • Figure 1: DT Board of Management responsibility split, at 2015 and 2018 Capital Markets Days
  • Table 2: Deutsche Telekom, financial summary, FY17

Headline data: All targets hit but not all problems sorted [p9]

  • America still first

Spend: taps to remain open on capex [p10]

  • Table 3: Deutsche Telekom, capex development picture (including spectrum investment), FY12-18
  • Purchasing power constraints
  • Systems shake-up ongoing, with M&A adding to opportunity
  • Capital Markets Day preview — discipline and digitisation
  • Table 1: Deutsche Telekom strategy, FY14 vs FY17

Guidance: DT on track but favourable currents weaken [p13]

  • For FY18 at least, US still tasked with breaking trail
  • Table 4: Deutsche Telekom, financial development picture, FY12-FY18
  • As investor day looms, ‘Leading European Telco’ still not a complete fit

GROUP

Deals

Pruchnow has 70 fibre tie-ups up sleeve [p16]

  • DT’s current German broadband plans — key facets
  • EWE JV is test pilot for DT’s FTTP rocket…
  • … but the background remains highly political
  • Pruchnow has been quietly busy, but mission not yet accomplished
  • A third way
  • Liberty-Vodafone talks add fuel to the fibre fire

DT does a Greek gimme-five [p24]

  • OTE reviving, but not yet recovered
  • Höttges reiterates Greek ambitions, flags plans for “tighter” OTE links
  • Greek telco meld coming together

DT buys into IoT management player Axonize [p27]

  • Table 5: Telekom Innovation Pool overview

DT confirms DeTeMedien exit [p29]

  • It’s still not yet over…
  • Table 6: People movement highlights

Group Development

DT quietly prepping Dutch and German tower revamps [p33]

  • Pressured DT careful on spend presentation and language
  • Funkturm morphing into tower outsourcer
  • DT to take Cellnex relationship to next level, with Dutch tie-up?

Technology & Innovation

DT takes axe to non-core innovation [p35]

  • Clearing the decks
  • Déjà vu all over again

DT to start 5G trials in Germany, talks up partnerships [p36]

  • Nothing too fancy in 5G vision
  • FWA reaches TIP point with mmWave spectrum
  • DT’s work within the mmWave Networks Project Group is diversifying
  • Riding with Huawei to 5G staging posts
  • Nokia out
  • Smarter energy management…
  • …more coordinated network slicing
  • Figure 2: 5G Momentum Index: Deutsche Telekom global ecosystem, to March 2018
  • DT hands Digital Domain a slice of reality

DT reboots operator vRAN push with alliance meld [p42]

  • DT tweaks language as Jacobfeuerborn passes baton
  • Dissenting vRAN voices from within
  • Vodafone, with skin in the RAN game, takes different route
  • vRAN fragmentation
  • Table 7: Supplier participation comparison, next-generation RAN initiatives

DT gets edgy with smart-glasses and SKT [p46]

  • Enterprise and consumer app push
  • SKT circles MobiledgeX

DT fumbles ball with EAN demo at MWC [p47]

  • EAN lacks elán

GERMANY

Q4 FY17

Höttges unmoved on German investment [p50]

  • Table 8: Deutsche Telekom, Germany area revenue split (as reported), FY17
  • Table 9: Deutsche Telekom, Germany area financial summary (as reported), FY17
  • A capital idea
  • Money is power

Strategy

TDE goes Un-Carrier on unlimited data [p54]

  • Keep the customer satisfied
  • Network badge of honour
  • Another sign of shifting geo-politics within DT

Service meld sees TDE absorb Vivento’s customer unit [p56]

  • DT keen to talk up automation, despite more union difficulties

EUROPE

Q4 FY17

DT cautiously optimistic on European recovery [p59]

  • Happier, to a degree
  • Figure 3: Comparison, capital expenditure intensity as a proportion of revenue, DT’s Europe and Germany segments, FY17
  • Table 10: Deutsche Telekom, Europe area financial summary (as reported), FY17

Croatia

DT slams Croatia’s second “state telco” plan [p62]

  • It was coming

Greece

EETT to press on with 3.4GHz-3.8GHz auction [p63]

  • Air resistance
  • Table 11: DT’s Europe spectrum agenda, FY18-FY19

Ericsson upgrades Cosmote LTE network with NB-IoT [p64]

SYSTEMS SOLUTIONS

Q4 FY17

T-Systems still seeking an ‘out’ from outsourcing [p66]

  • T-Sys refresh could have Indian flavour
  • Can T-Sys finally break with ‘tradition’?
  • Table 12: Deutsche Telekom, Systems Solutions financial summary (adjusted), FY17
  • No uptick seen in FY18
  • T-Sys puts money behind pivot to “Big IoT”

Partnerships

SAP bags early spot in T-Sys’s ‘Big IoT’ mission [p70]

  • Other Things planned
  • SAP sees the way the wind’s blowing
  • T-Sys to double IoT headcount, to address project bottlenecks

Products and services

T-Sys retools flagship IntraSelect service for SD-WAN [p72]

  • Two networks, one solution
  • PoC Smart SD-WAN deployments now live

USA

Q4 FY17

DT looks to dive into burbling US cash flow [p75]

  • Table 13: Deutsche Telekom, US area operational indicators, Q4 FY17
  • Table 14: Deutsche Telekom, US area financial summary (as reported), FY17
  • Dollar fall takes gloss off
  • Figure 4: Quarterly net revenue comparison, US vs Germany plus Europe, FY16-FY17
  • DT strengthens TMUS stake in anticipation of cash

Network

TMUS twitchy for more 5G spectrum [p79]

  • American Pai
  • Ingredients coming together for TMUS
  • Knocked off the Straight Path
  • FCC ferrets for frequencies
  • Infrastructure rules revamp…
  • …and the lighter touch
  • 5G or not 5G
  • Ericsson, Nokia get 5G nod

TMUS clocks up 1.3Gbps speeds using Nokia LAA kit [p85]

  • LAA law

FURTHER Reading

INDEX

Index

Symbols

3rd Generation Partnership Project (3GPP) 38, 79, 84, 85

A

adidas 32
Africa 32
– South Africa 32
AF Telecom (Alisher Usmanov)
– MegaFon (see Alfa/TeliaSonera/separate) 31
Alfa Group
– Altimo (Alfa Telecom International Mobile)
– – MegaFon (see AF Telecom/TeliaSonera/separate) 31
Alphabet
– Google 21, 46
– – Android 40
Amazon.com Inc. 30, 32
Amdocs 42, 45
Americas
– Canada 20, 84
– Mexico 32, 84
– North America 80
– United States of America (USA) 6, 11, 13, 14, 20, 21, 28, 32, 46, 54, 55, 63, 70, 74, 79, 81, 83, 84
– – Federal Communications Commission (FCC) 79, 80, 81, 82, 83
– – Securities & Exchange Commission (SEC) 77
– – States
– – – Califormia 81
– – – Kansas 82
– – – New York 80, 81, 84
– – – Ohio 81
– – – Washington 82, 84, 85
Apple 30
– iOS 40
Aricent Inc. 42, 45
Asia-Pacific 42
– China 39, 42
– – Province/Municipality/Region
– – – Shanghai 38
– Hong Kong 40
– India 67
– – Licence Circles
– – – Himachal Pradesh 26
– Japan 84
– South Korea 40
Atos 32, 67
AT&T 6, 21, 42, 53, 55, 75, 81, 83
Axiata Group Bhd (TM International)
– Cambodia (TM International (Cambodia) Co. Ltd./hello) 30
– Indonedia (PT Excelcomindo Pratama Tbk/XL, see separate listing) 54

B

Bayern Munich 47, 48
Bitcoin 81
BT Group 17, 44, 82
– EE 32

C

Carl Zeiss 46
Cellnex Telecom 34
– Swiss Towers 34
China Mobile 39, 42
– Research Institute 39
Ciena Corp. 42, 45
Cisco Systems 28, 42, 45, 70, 73
Comarch SA 28, 73
Comcast Corp. 75
– NBCUniversal, LLC
– – NBC 80
Credit Suisse 77

D

Daimler AG 18
Deutsche Bank 77
Deutsche Post 26
Deutsche Telekom 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17, 18, 19, 20, 21, 22, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 42, 43, 44, 45, 46, 47, 48, 50, 51, 52, 53, 54, 55, 56, 59, 60, 61, 62, 63, 64, 66, 67, 68, 69, 70, 71, 72, 73, 75, 76, 77, 79, 80, 81, 82, 85
– ClickandBuy (Firstgate) 35
– Corporate
– – Headquarters 28, 37, 38
– Deutsche Telekom Capital Partners 17, 28, 51
– – BENOCS 27, 28
– – Deutsche Sportwetten 28
– – Deutsche Telekom Strategic Investments 28
– – – Cuculus (see separate) 27
– – Digital Media Audience Products 28
– – Kumukan 28
– – Lite Elements 28
– – Mojio (see separate) 20
– – Motionlogic 28
– – Next Generation Enterprise Network Alliance (ngena) 28, 72, 73
– – SoundCall 28
– – Strato (see separate) 30
– – SureNow 28
– – Swiss Towers (see separate) 34
– – The Digitale 28
– – Trust2Core 28
– – xplosion interactive 28
– Digital Business Unit 36
– – DeTeMedien 29, 30
– Europe 61
– – Austria 39
– – Bulgaria (see OTE) 31
– – Croatia (Hrvatski Telekom) 31, 62
– – Czech Republic 27, 32, 59, 63
– – Greece (see OTE) 25, 63, 64
– – Hungary (see Magyar Telekom) 31, 32, 38
– – International Carrier Sales & Services (ICSS) 31
– – Montenegro (see Magyar Telekom) 60
– – Netherlands 9, 11, 14, 20, 22, 32, 33, 34, 50, 52, 55, 61
– – Poland (Polska Telefonia Cyfrowa/PTC) 31, 53, 61
– – Slovakia (Slovak Telekom/T-Mobile) 32, 63
– – UK (EE) 32
– European Aviation Network 47
– Executives
– – Abolhassan, Ferri 56
– – Batelic, Boris 31
– – Bederke, Reyk 32
– – Calian, John 29
– – Dannenfeldt, Thomas 7, 17, 27, 31, 33, 56, 59, 66, 71, 77
– – Dijkman, Freddy 32
– – Failer, Thomas 32
– – Fleutiaux, Francois 67
– – Gopalan, Srini 61
– – Hagspihl, Michael 51
– – Höttges, Timotheus 6, 8, 17, 20, 24, 37, 47, 51, 52, 61, 67, 69, 76
– – Illek, Christian 7, 31
– – Jacobfeuerborn, Bruno 25, 43
– – Janssen, Uwe 39
– – Koster, Rudiger 39
– – Kremer, Thomas 7
– – Legere, John 83
– – McDiarmid, Mark 85
– – Molefe, Dineo 32
– – Nemat, Claudia 7, 30, 35, 36, 37, 38, 39, 43, 47, 61
– – Pruchnow, Johannes 16, 53
– – Ray, Neville 37, 79, 80, 85
– – Schoonbee, Gert 32
– – Strecker, Frank 70
– – Talavera, Martin 32
– – van Damme, Niek Jan 36
– – Vento, Vicente 51
– – von Reventlow, Christian 31, 35
– – Wössner, Dirk 20, 51
– Ex-executives
– – Kozel, Edward 36
– – Obermann, Rene 36
– Germany 12, 16, 18, 19, 20, 25, 28, 31, 33, 34, 36, 38, 39, 50, 51, 52, 53, 54, 55, 56, 60
– – T-Online 51
– InteractiveMedia 28, 30, 51
– Investments
– – Magyar Telekom (see separate) 31, 32, 38
– – OTE (see separate) 24, 25, 26, 27, 31, 63
– Management Board 36
– Product and Innovation 31
– – hubraum
– – – M2MGO (see separate) 27
– – Telekom Innovation Laboratories (T-Labs) 29
– Products and services
– – Binge On 54
– – Business Marketplace 35
– – immmr 27, 28
– – Magenta drone defence shield 26
– – QIVICON 31, 35
– – Scout24 30
– – T-Mobile TV 77
– – tolino 30, 35
– Systems Solutions 9, 10, 11, 14, 50, 52, 61, 65, 67, 68
– – Telekom IT 9, 11, 12, 14, 31, 50, 52, 61, 68
– – T-Systems 7, 20, 28, 29, 31, 32, 35, 51, 56, 66, 67, 70, 72
– – – Detecon 67
– – – South Africa 32
– – – Telekom Security 29, 32, 69
– Technology
– – 5G
haus 38, 39, 40
– Toll Collect 18
– USA 6, 9, 10, 11, 12, 13, 14, 20, 21, 31, 37, 39, 53, 54, 55, 60, 75, 76, 77, 79, 80, 81, 82, 83, 84, 85
Deutsche Telekom Capital Partners 17, 28
– Deutsche Telekom Strategic Investments 28
DHL Worldwide Express 26
Dr. Ing. h.c. F. Porsche AG 70

E

Enel 82
Ericsson 24, 39, 40, 44, 47, 60, 64, 79, 80, 82, 84, 85
Europe
– Albania 25, 63
– Austria 12, 14, 20, 32, 39, 60, 63, 64
– Bulgaria 31
– Croatia 28, 61, 62
– Czech Republic 20, 32, 59, 63, 64
– Finland 39, 85
– France 17, 32, 44, 48
– Germany 9, 10, 11, 12, 13, 14, 16, 17, 18, 19, 20, 22, 26, 27, 28, 30, 31, 32, 33, 34, 36, 37, 39, 40, 43, 44, 46, 47, 49, 50, 51, 52, 53, 54, 55, 56, 60, 61, 62, 63, 64, 67, 68, 70, 73, 76
– – Bundeskartellamt (Federal Cartel Office) 17, 29
– – Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen (BNetzA, RegTP, FNA, or German Federal Network Agency) 18, 30
– Greece 24, 25, 26, 27, 60, 61, 63, 64
– – Government 27
– – Hellenic Telecoms and Post Commission (EETT) 63
– Hungary 28, 31, 32, 61, 63, 64
– Italy 22
– Macedonia 63
– Montenegro 60
– Netherlands 12, 14, 22, 32, 33, 34, 60, 63, 64
– Norway 48, 52
– Poland 31, 63, 64
– Romania 25, 61, 63
– Russia 31
– Scandinavia 32
– Slovakia 24, 28, 32, 61, 64
– Spain 17, 32, 34, 84
– Sweden 28, 60, 61, 80, 84
– Switzerland 32, 33, 34, 48, 52, 54, 66
– United Kingdom (UK) 17, 28, 32, 44, 85
European Organisation for Nuclear Research 66
European Union 30, 48, 52, 54, 62
– Court of First Instance 30
– European Commission 22, 62, 66
– European Parliament 19
EWE
– EWE Tel 16, 17, 18, 19
ExxonMobil Corp. 54

F

Facebook 21, 36, 37, 38, 44
– Telecom Infra Project 37, 43
Forthnet 27
France Télécom
– Orange 30, 31, 32, 35, 42, 44, 53
– – UK (see EE, DT) 32
Fraunhofer Institute 30
Fujitsu 42, 45

G

GSM Association
– Mobile World Congress 21, 22, 24, 25, 26, 29, 30, 36, 37, 38, 40, 43, 45, 46, 47, 48, 70, 71, 72, 79, 80, 81, 82, 84
GSM Association (GSMA) 21, 39, 53
GTS Central Europe 27

H

H1 Telekom 62
Hamburg Port Authority 70
Hewlett-Packard 26
Hrvatski Telekom (see DT, Croatia) 31, 62
Huawei Technologies 36, 38, 39, 40, 44, 47, 59, 66

I

IBM 32
Inmarsat 47, 48
Intel 38, 42, 45, 47
Intracom Holdings
– Hellas On Line (HOL) 27

K

Kohlberg Kravis Roberts 21
KPN 22

L

Liberty Global Inc.
– Unitymedia GmbH 20, 22
– UPC Broadband
– – Germany (Unitymedia) 20, 22

M

M2MGO 27
Magyar Telekom (see DT) 31, 32, 38
– Montenegro (Crnogorski Telekom) 60
Market segments
– Machine-to-machine (M2M) 69
– Mobile virtual network operator (MVNO) 51, 53
– Multinational corporations (MNCs) 66, 70
Mavenir Systems 42, 45
McKinsey & Co 32
MegaFon (see AF Telecom/Alfa /TeliaSonera) 31
MetroPCS Communications Inc. 81
– Carter, Braxton 77
Microsoft 27, 32
Middle East 32
– Israel 27, 70
M-Net 17
Mojio 20

N

Naspers Limited (MIH Group)
– Electronic Media Network (PTY) Ltd (M-Net) 17
National Telecommunications and Information Adminstration 82
NEC 42, 45
Net Cologne 17
NetCologne 17
Next Generation Mobile Networks 33
Nokia 39, 42, 44, 45, 48, 63, 79, 82, 84, 85
NTT 42
Nuance Communications Inc. 30

O

Open Handset Alliance (OHA)
– Android 40
Optima Telekom 62
Oracle 31
OTE (Hellenic Telecom. Org. SA, see DT) 24, 25, 26, 27, 31
– Bulgaria (Globul) 31
– Cosmote 25, 63, 64
– – Albania (Telekom Albania) 25, 61
– – Greece 25, 63, 64
– Germanos 25

P

Panasonic 60
Providence Equity Partners
– KDG Holding GmbH (Kabel Deutschland) 22
PT Excelcomindo Pratama Tbk (XL) 54

Q

Qualcomm 85

R

Red Hat 45
Robin Radar Systems 26
Rohde & Schwarz 26
RTL Group 31
RWE AG 17
RWTH Aachen University 26

S

Samsung 40, 42, 45, 85
SAP 32, 70, 71
Schoonbee, Gert 32
Siemens AG 32
SK Telecom 40, 42, 46, 47
Slovak Telekom (see DT, Slovakia) 32, 63
Sprint Corporation 21, 53, 75, 77, 83
Squarehead Technology 26
Strato 30

T

Target Corporation 31
Tech Mahindra Ltd 45
Technology
– 2G
– – GSM 21, 53
– 3G 63, 82
– – Evolved HSPA (HSPA+/I-HSPA)
– – – MIMO 38, 59, 85
– 4G 33, 37, 38, 63, 64
– – Long Term Evolution (LTE) 10, 33, 39, 47, 48, 53, 55, 59, 64, 80, 84, 85
– 5G 10, 18, 33, 35, 36, 37, 38, 39, 40, 43, 55, 59, 63, 79, 80, 81, 82, 83, 84, 85
– CRM 28
– DSL 16
– Ethernet 72
– Fibre 10, 11, 13, 14, 16, 17, 18, 19, 20, 21, 22, 27, 36, 37, 42, 51, 53, 55
– FTTH 16, 19, 21, 37
– IP 10, 12, 24, 36, 68
– IPTV 35, 61, 77
– M2M 69
– MPLS 72
– Narrowband Internet of Things (NB-IoT) 52, 64
– NFV 42
– NGN 62
– OpenStack 43
– Personal computer 40
– RAN 39, 42, 43, 44, 45, 84
– R&D 29, 30, 42, 45, 59
– RF 85
– SaaS 70
– SIM 26, 52, 84
– Smartphone 46, 79, 83, 84
– Spectrum 37, 82, 84, 85
– – 700 MHz 63, 81
– – 800 MHz 63
– – 900 MHz 63
– – 1800 MHz 63
– – 2100 MHz 63
– – 2300 MHz 63
– – 2600 MHz 63
– – 3500 MHz 63, 82
– – Digital dividend 63
– VDSL 16
– WAN 72, 73
– W-LAN 35, 38, 80
Tele2 22, 34
– Netherlands 22, 34
Telecom Italia
– Telecom Italia Mobile 39
Telefonica Group 51, 53, 82
Telekom Slovenije
– ONE 54
Telenet 17
Telenor ASA 21, 31, 53
TeliaSonera 21
– MegaFon (see AF Telecom/Alfa/separate) 31
Telstra 42
Telus 20
Tencent Holdings Ltd 39
Texas Instruments 42, 45
Thales Group 48

U

United Internet 17, 18, 20, 30

V

Value-added services 26
ver.di (Vereinte Dienstleistungsgewerkschaft) 56
Verimi 53
Verizon Communications 21, 42, 45, 53, 55, 75, 79, 80, 81, 83
– Verizon Wireless 55
VINCI Group
– Cofiroute, S.A. 18
Vodafone 12, 20, 21, 22, 27, 44, 47, 51, 53, 56
– Europe Region
– – Germany 20, 22, 51, 53
– – Greece 27
– – UK
– – – Cornerstone 27
Volkswagen AG 39

W

Weather Investments
– Orascom Telecom
– – WIND Hellas 27
– – Wind Telecomunicazioni 27, 82
WhatsApp Inc. 21

Z

Zenterio 61

About

About Deutsche Telekomwatch

Report: #71
Published: March 2018
Next report: April 2018
For more information visit: Deutsche Telekomwatch