Deutsche Telekomwatch Report #1 April-May 2011 Executive Brief
25 May 2011
|
- Q1 FY11 MANAGEMENT UPDATE: Deutsche Telekom (DT) published its Q1 FY11 financial results, reporting a 9.8% drop in sales as competitive, economic, and regulatory difficulties took their toll across most of its markets, particularly in Central and Southern Europe. Continuing international operations were especially badly hit. Nevertheless, management maintained guidance and showed measured optimism regarding outlook across most operations — as well as indicating willingness to “front load” investment where signs are more positive. [pp.4-10,20-23,27-29,36-40,43-45,47-51,53,54,56,57,61-65,67,68,85,86,90-92.]
- GROUP: Also evident from executives was great relief at having finally offloaded sub scale and spectrum deficient T Mobile USA (TMUS) — and at what appears to be a decent price, with AT&T to acquire the OpCo for $39bn (EUR27bn). TMUS is now classified by the Group as a “discontinued” operation, although regulatory approval for the deal is not expected to be straightforward. Deutsche Telekom has “fully hedged” the approximate $25bn cash element of AT&T’s bid. [pp.78-85.]
- Following the AT&T deal, Deutsche Telekom announced plans to establish an expansive but potentially controversial procurement partnership with European peer France Télécom, reawakening visions of a wider merger, and resultant creation of a ‘European Union incumbent’. Building on the Groups’ recent Smart Industry cooperation, and other collaborations (including UK joint venture Everything Everywhere), the deal aims to combat Deutsche Telekom’s revenue pressures through generation of “above EUR400m” in annualised savings. However, it also faces multiple hurdles — not least antitrust approvals, and longer term operational risks. [pp.11-14.]
- The companies also detailed plans to expand network sharing arrangements, with cooperation in rural Austria, and similar initiatives being mooted in Romania and Slovakia. [pp.34-35.]
- Deutsche Telekom is seeking to cultivate stronger ties with Chinese media and telecoms players, particularly around value added service innovation, according to Edward Kozel, the Group’s Chief Technology & Information Officer. [p.14.]
- 21 year Deutsche Telekom veteran Roland Mahler is reported to have come out of retirement to serve as interim head of the Group’s Europe region, following Guido Kerkhoff’s recent, unexpected exit. It was also reported that Deutsche Telekom has recruited former BSkyB executive Gerry O’Sullivan to push international growth of its Entertain television business via a newly created role of Vice President of Global TV & Entertainment. [pp.16,30-32.]
- GERMANY: Deutsche Telekom indicated it is planning to hold an Investor Day in July 2011, where the agenda appears set to include details of a new, less capital intensive model for its fibre expansion programme in Germany. The announcement will no doubt be closely watched for evidence of reining in of ambitions for the network, and whether the Group will adopt a more conciliatory approach towards rivals and other prospective rollout partners. [p.22.]
- Deals started to filter through in the Group’s drive for growth from Intelligent Network Solutions, including expansion of smart meter deployment in the T City of Friedrichshafen; although the company conceded it is yet to ‘show any significant revenues” from these operations. [pp.25-26.]
- EUROPE: Europe area activity in the infrastructure and software as-a service markets continues to grow, with Hrvatski Telekom preparing to debut a family of cloud computing solutions in June 2011, and Slovak Telekom flagging that a long awaited new data centre is close to going live. [pp.41,63-65.]
- Several Europe area OpCos trumpeted 3G/HSPA expansion and upgrades, as well as progress with or towards Long Term Evolution (LTE) infrastructure experimentation. Hrvatski Telekom began operating a Huawei supported LTE “test network” in the western city of Rijeka, while: Telekom Srbija completed a two month trial of the technology (with Ericsson, Huawei, and NSN); and T Mobile Slovakia gained regulatory clearance to run its own LTE field tests, without confirming vendor participation. TMSK separately highlighted addition of HSPA+ 64QAM technology to its existing 3G network. [pp.41,52,58,65-66.]
- There were suggestions that OTE, like Deutsche Telekom, may hit the brakes on fibre expansion, after seeing imposition of tougher regulatory controls on its high profile VDSL rollout programme. [p.49.]
- Other financially strapped, central European governments also continue to throw regulatory challenges at the Group — Hungary is said to be preparing a 900MHz licence auction that would likely give T Mobile Hungary a third network based competitor; while the Slovakian government confirmed T Mobile Slovakia and main rival Orange Slovakia will face one off fees to renew expiring 2G licences. In the UK, Everything Everywhere was dealt blows by media and telecoms watchdog Ofcom, with: confirmation of hefty mobile termination rate reductions; and proposal of terms for the country’s forthcoming ‘digital dividend’ auction, which the joint venture described as potentially damaging to the “normal development of the market”. [pp.52,66,70-75.]
- Reports of a spike in PTC’s media buying activity prompted speculation that Deutsche Telekom will shortly follow up its recent buyout by switching PTC’s Era mobile brand to the Group’s flagship T Mobile marque. [p.55.]
- Romtelecom boosted its presence in the country’s fast consolidating pay TV sector, releasing an online video portal and agreeing two acquisitions of direct to home players. Reports also suggested it may seek to head off the competitive threat offered by cable operator rivals RCS&RDS and UPC’s mooted merger, with its own bid for the latter. [p.58.]
- Everything Everywhere (EE) made a series of senior executive and reporting line changes in its Commercial function, including refashioning Marketing and Products teams, as the joint venture continues to rationalise and unify operations. Huawei was awarded a contract to revamp EE’s 2G infrastructure. [pp.33,69.]
- USA: T Mobile USA suffered embarrassment after launching a new messaging and communications brand Bobsled by T Mobile, but was subsequently forced to suspend its first offering — a free, Facebook based internet telephony tool. The OpCo previously resurrected the youth oriented Sidekick messaging device family to support the push, with release of the Samsung made Sidekick 4G. [pp.17,18,88,89.]
- SYSTEMS SOLUTIONS: T Systems stated intent to bolster its marginal French business, following recent restructuring, as well as announcing a slew of new contracts in the financial services, healthcare, and local government sectors. The latter saw an IT services deal with the eastern German city of Cottbus, positioning the provider for a push for greater business from local authorities. [pp.91,94.]
About Deutsche Telekomwatch
Report: #1
Covering: April-May 2011
Published: May 2011
Next report: June 2011
Central Europe’s communications titan — surveillance, analysis, insight.
A unique monthly report for the industry.
- Deutsche Telekomwatch is the only independent monitor of everything and anything to do with Deutsche Telekom Group, worldwide. Nothing else comes close. Thorough, impartial, accessible, and time-saving.
- Covering not just Germany's integrated telcoms leaders and all of its international operating companies, but also its wider interests, including OTE in Greece, Magyar Telekom in Hungary, and much more.
- Our ‘watch' titles are repeatedly described by clients and end-users as the single most valuable source of third-party sales intelligence, and are considered invaluable by many high-achieving commercial teams and account directors.
- A unique source of valuable opportunities, knowledge, planning, strategy, and much more, the reports represent both tactical tool and strategic reference, providing input and even a springboard for corporate planning, reporting, and meetings.
- A ‘must-have' for sales teams focused on high-value sales, maintaining strategic relationships, and managing extended sales cycles. Just one nugget, insight, or validation can pay for the service many times over.
- Pricing is typically USD $8.2k / EUR 5.7k / UKP £5k per year for an Account Team Licence, and can be tailored to meet your specific needs and situation. Copies of individual reports are also available, priced from GBP £999 (USD $1,650 / EUR 1,100). Multiple purchasing options available, including payment cards.
- Delivered electronically 10-12-plus times a year, with back issues also available, providing unparallelled reference and insight into major events, strategic initiatives, financials and KPIs.
- Contact us for further information, including samples and evaluation trial requests. info@marketmettle.com / +44-20-7183-0111.
Comments
Got something to say?
