COMPANY PRESENTATION
COMPANY PRESENTATION OVERVIEW 01 Deutsche Telekom 02 Strategy & Transformation 03 Network, Products & Innovation 04 Service & Brand 2
PROFILE Customers & Markets Facts & Figures Customers 156 m mobile customers 29 m fixed-network customers/ 18 m broadband customers Approx. 6.6 m TV customers Some 1.6 m managed workplace systems Markets Present in 50 countries Germany, Europe and the USA: with own infrastructure T-Systems: global presence & alliances via partners Telekom in figures, 2015 Revenue 69.2 bn Adjusted EBITDA 19.9 bn Free Cash-Flow 4.5 bn Employees & responsibility Employees worldwide: 225,000 8,600 trainees and cooperative degree students in Germany Pioneer of social issues (climate protection, data privacy, diversity, etc.) Source: DT 2015 annual report/tmus annual report to shareholders 2015 Customers & markets, facts & figures 3
GERMANY 40 million mobile customers Biggest (V) DSL provider in Germany 12.6 million broadband lines 2.7 million IPTV customers incl. satellite 22.4 billion revenue 8.8 billion EBITDA 68,638 employees 110,354 employees in Germany overall Financial figures taken from DT's 2015 annual report Facts & Figures: Germany 4
Europe & United states T-Mobile US: 63.3 million mobile customers USD 32.07 billion revenue USD 7.36 billion EBITDA 44,229 employees Financial figures taken from DT's 2014 annual report/tmus' annual report to shareholders 2014 Europe: Present in 13 countries 52.2 million mobile customers 5 million broadband lines 3.9 million IPTV, satellite, cable customers iphone in all European markets 12.7 billion revenue 4.3 billion EBITDA 49,638 employees Direct shareholdings Facts & figures: EU & US 5
T-SYSTEMS Information technology and telecommunications services in all industries: automotive, finance, transport, retail & public sector Pioneer in cloud computing Corporate customers, multinational corporations & public sector 8.6 billion revenue 0.8 billion EBITDA 46,000 employees Financial figures taken from DT's 2015 annual report Facts & figures: TSI 6
HOW WE SEE OURSELVES WHAT CONNECTS US. It is in our nature to seek the company of others: humans need this interaction in order to move forward. Sharing fosters closeness. It is the very reason we choose to share our important moments with those important to us. We share events, experiences, and opinions sometimes even our possessions. We share knowledge and our ideas. And quite often, by sharing these thoughts, we turn them into something bigger, something better. That is what drives us. We, Deutsche Telekom, are more than just another company, which provides society with infrastructure. Whatever the circumstances, we are a trusted companion in both people s private and work lives. Whenever. Wherever. Forever making life easier for people and enriching it is our mission. Our network is an artery pumping life: fast, reliable and secure. It provides easy access to all who need it. We are close to the consumer and are transparent, fair, and open to dialogue. We identify innovative products at an early stage and develop them in collaboration with our partners. We do all of this better than anyone else. This ability forms the basis of trust an essential ingredient for long-lasting relationships. Precisely this is the essence of our work at Deutsche Telekom. Together, with passion, focus and efficiency, we are entering a world of infinite possibilities. This connects us. Profile 7
We take responsibility Data privacy Diversity Sponsorship Leading role in data privacy & data security Data Privacy Report & Security on the Internet report Honeypots as early warning system against cyber attacks Leading role in societal and diversity-related issues Pioneer as first to introduce Group-wide women s quota Special programs & initiatives to promote education & training Modern working models, e.g., E-mail Policy Winner of the Max Spohr prize for exemplary promotion of diversity Commitment to culture & sport Amateur & professional sports e.g., German football association (DFB), Bayern Munich, Olympic & Paralympic Games, New sports experience project in recreational sports Culture/examples: International Beethoven Competition, Beethovenfest Responsibility 8
We take responsibility CORPORATE RESPONSIBILITY Sustainability & social engagement Environmental and climate protection E.g., CO2 reduction, efficient use of resources, sustainable mobility Social engagement & stakeholder mgmt. E.g., promote employees social commitments, support education and competence in media Sustainable products and innovations E.g., environmentally friendly and accessible products, efficient data centers, ehealth Sustainable supply chain E.g., binding requirements for the supply chain, inspections and audits Integrated financial and CR reporting E.g., mandatory CR KPIs for the entire Group in the annual and CR reports, sustainability indexes Groundbreaking projects Group climate protection target: 20% less CO2 by 2020 Yes, I can! initiative for children and young adults: 5 years, 500 projects, 50,000 opportunities Blue Angel : first cordless telephone on the market to have the eco-label Supplier selection and development: sustainability as a key criterion Success in respected rating indexes and rankings: oekom, CDP and Sustainalytics, among others Responsibility 9
OUR GUIDING PRINCIPLES Customer delight and simplicity drive our action Respect and integrity guide our behaviour Team together Team apart Best place to perform and grow I am T count on me Guiding Principles 10
COMPANY PRESENTATION OVERVIEW 01 Deutsche Telekom 02 Strategy & Transformation 03 Network, Products & Innovation 04 Service & Brand 11
Changing industry s paradigms internet of things convergence self-service sharing mix and match individualization simplicity convenience apps synchronity digitization open platforms Industry 4.0 interoperability data is the resource two-sided business model OTT data analytics virtualization bandwidth All-IP coverage modularization softwarization stability reliability hybrid networks LTE connected data platforms ecosystem data analytics network effects freemium Trends 12
Customer trends sharing in a connected world Phone by Apple Contract by Telekom 25 different apps 1 Individual mix & match Telekom.de LTE 16:45 38 % Seamless connectivity LTE WLAN HYBRID FIBRE Sharing is the new having Appification: one use case, one app Intuitive and simple interfaces mobile first Digital enabling of all aspects of life 2 1) Average number of downloaded apps on smart phones (2014) 2) Telekom Service Apps: Magenta Service and Telekom Hilft Trends 13
Technology trends convergence & virtualization SOFTWARIZATION VIRTUALIZATION CONVERGENCE DATA ANALYTICS Software defined networks Service Programming Control & Automation Network function virtualization Service A Control & Automation Service B Cloud Infrastructure Hybrid Fixed net for base load and stability + mobile net for additional bandwidth Modern in-memory platform Transact & analyze data in real-time Low-cost open source platform Batch process/archive infinite amounts of data Common IP Layer Commodity Hardware Replacing consumer hardware Faster Time-to-Market Heterogeneous networks SAP HANA HADOOP Higher elasticity Instant Results Infinite Storage Higher redundancy esim virtual set-top box Independence from hardware micro cell macro cell pico cell Real time business results from big data Technology trends 14
Business model trends OTT disruption TELCO BUSINESS MODEL Usage-based monetization Transport and protection of user data 5 Asset-heavy network invest Open 4 platforms 1 3 Interoperable standards Regulated market 2 PREMIUM SERVICE Scale for utilization DISRUPTION OTT BUSINESS MODEL Asset-light portfolio extension FREEMIUM SERVICE Scale for Reach 5 Closed 1 platforms 4 2 De-facto standards Unregulated market 3 Ad-based monetization Exploitation of user data Business model trends 15
We fight for control over our value points Infrastructure projects Virtualized access through esim Telco service substitution Retailization of device distribution enforced by esim Customer relationships dominated through app and content stores, payment solutions and online service OTT moves Dumb Pipe Owned network Access enabling hardware/ SIM-card Services (communication, TV, ) Device distribution Billing & contractual relationship Sales & service channels Seamless connectivity in fixed and mobile State-of-the-art devices Integrated and simple offers Strategic terminal management Reliable and secure service Digital and omnichannel service DT moves Business model trends 16
Our strategy LEADING EUROPEAN TELCO INTEGRATED IP NETWORKS BEST CUSTOMER EXPERIENCE WIN WITH PARTNERS LEAD IN BUSINESS TRANSFORM PORTFOLIO EVOLVE FINANCIAL TARGETS & EFFICIENCY ENCOURAGE LEADERSHIP & PERFORMANCE DEVELOPMENT Strategy 17
Our core beliefs WE ARE THE TRUSTED PARTNER FOR OUR CUSTOMERS We relentlessly strive for delivering the best customer experience Our products make life is for sharing simple, reliable and secure Our networks provide best seamless connectivity Sales and service processes go digital, omni-channel and 24 x 365 Partner products and services amend our core proposition Advanced data analytics improve and extend our service offering Technology leadership with a superior production model Fiber-based, integrated IP-networks deliver superior coverage, speed and quality We scale our production across footprint for efficiency and time-to-market Our open and interoperable connected data platforms enable the industrial internet We build the best team in the industry Empowerment, collaboration and innovation are imperatives of our leadership We constantly raise the bar while investing into the next, superior generation of talents We think customer-centric, are disruptive, take ownership, and act truly international Strategy: Our core belives 18
Our seamless high performing network TECHNOLOGY LEADERSHIP Target picture: Integrated Mobile only SUPERIOR SPEED AND COVERAGE SEAMLESS ACCESS We push a highly competitive fiber based infrastructure and at the same time stick to our capex envelope! 95% LTE pop-coverage 1 in 2018 with up to 300 Mbps Fiber household footprint of 80% in 2018 with at least 50 Mbps depending on regulatory adjustments Introduction of super vectoring with more than 250 Mbps in cable footprint Download speed of up to 550 Mbps via hybrid in cable footprint 264,000 hotspots and 2,000 small cells in 2018 to boost mobile capacity & indoor coverage 75 95% 2 LTE pop-coverage in 2018 with up to 300 Mbps 50% of households 3 with at least 100 Mbps in 2018 12% of households 3 with up to 500 Mbps 4 in 2018 1.6 mn hotspots in 2018 5 1) Outdoor coverage 2) Depending on country 3) In integrated footprint 4) FTTH, FTTB, FTTC, cable/ed3 (cable, esp. in Hungary with Euro-DOCSIS) 5) Including FON Strategy: Integrated IP networks 19
Our superior production model DIGITAL TRANSFORMATION OF CUSTOMER FACING PROCESSES COST EFFICIENCY & SIMPLICITY ALL-IP-TRANSFORMATION PAN-EUROPEAN NETWORK INTEGRATED NETWORK STRATEGY PSTN migration in all NatCos 1 LTE roll-out 2 Optical fiber Centralized, virtualized architecture and production platforms PAN- NET 3 Vectoring 4 Hybrid access PLUG & PLAY TIME TO MARKET BEST CONNECTIVITY Strategy: Integrated IP Networks 20
Our integrated Customer proposition Mobile Internet S M L SERVICE DSL Access S M L CLOUD ER KOMMUNI- KATION LEBEN ENTER- TAINMENT Product world in silos Every tariff element to be booked separately FROM SEPARATE, COMPLEX TARIFFS Simplified tariff scheme Data as key differentiator TO SIMPLIFIED WITHIN SILOS SICHERHEIT Convergent portfolio, also beyond tariffs Seamless connectivity TO FULLY INTEGRATED TODAY. Strategy: Delight your customers 21
Partnering strengthens our customer proposition WIN-WIN-WIN THROUGH PARTNERING ACHIEVEMENTS AND AMBITION OF PARTNERING CUSTOMERS One-stop shopping Integrated proposition Best digital products Subscriber (mn.) 6 2.3 2014 2018 300 Revenue ( mn.) 100 2014 2018 PARTNER Product reach Technical enablement Additional revenues DT Platform scale Loyalty boost Additional revenues Partner vs. make Subscriber (mn.) 1.7 6 2014 2018 Strategy: Win with partners 22
open & interoperable platforms INDUSTRIAL INTERNET EXAMPLE: CONNECTED CAR Smart Data fuels the next industrial revolution: Pure Connect. Data Mgmt. Platform Services Car Industry Solutions Secure Autocloud Lot sizes of 1 Autonomous robots Data-driven services (context & 3rd party data) Real-time ERP Open & interoperable platforms for crossindustry data pools Data security & privacy as key differentiator Data-driven services (internal data) Open, interoperable platforms Secure data hosting High performance network infrastructure & traffic prioritization as enabler industry-agnostic M2M Connectivity industry-specific OUR CUSTOMERS (SELECTION) Strategy: Lead in business 23
Innovation drives future differentiation INTEGRATED IP NETWORKS BEST CUSTOMER EXPERIENCE WIN WITH PARTNERS LEAD IN BUSINESS INNOVATION @ DT...... is leading edge: e.g. Hybrid, Super-Vectoring, Qivicon... happens on all levels: networks, processes, platforms, tariffs and products... considers today s and anticipates future customer demands... is efficient and effective: focused make vs. partner decisions PAN-Net/NG-/All-IP QoS Hybrid/WiFi 5G Virtualization (SDN/NFV) Super-Vectoring G.fast Carrier Aggregation/ MIMO 300 Mbit/s Communication Security Wearables etransformation MagentaEINS/ FMC Plus/ FMCC Smart Home/Qivicon NGTV Payment Ecosystem Management esim Steckerleiste Strategic Partners M2M Cloud Verticals Advanced Data Analytics Open and interoperable platforms Accentuated: Innovation in adjacent businesses Strategy: Innovation 24
Europe s most valuable and most reliable telecommunications brand MOST TRUSTED BRAND FOR INTERNET AND MOBILE COMMUNICATIONS 1 46 Most valuable brand among European telcos 24 24 21 21 19 18 17 15 9 8 Most trusted brand for Internet and mobile communications Source: Institut für Demoskopie Allensbach, 2014 1) Share of people who rate these companies as trustworthy STRATEGY & TRANSFORMATION Strategy: Brand 25
Regulation must keep pace with reality Revenue Scalability Adjust regulatory frameworks to reinvigorate industry growth Review pricing regulation Allow quality differentiation Develop uniform legal frameworks to promote digital innovations Competitiveness Access Devices Services Telcos OTTs Cable Media User experience Enable economies of scale to yield dynamic efficiency gains Promote market consolidation Enable partnerships to promote open platforms and interoperability Investment Ensure fair competition with the same rules for all players along the value chain Data privacy and data security Interoperability Consumer protection Convergence Provide incentives to invest in broadband infrastructure Ensure investment-friendly regulation Harmonize spectrum policy Improve funding and promote cost-efficient technologies The telecoms and the OTT market are merging together establishing uniform regulatory frameworks is absolutely necessary Strategy: Regulation 26
We follow a clear portfolio strategy ACHIEVEMENTS M&A POLICY GOING FORWARD Strategic solution: building FMC market leader Premium valuation: 12.5 bn EV Upside via participation in synergies Sale of 70% stake in Scout for 1.6 bn Attractive valuation of 20 times 2013 EBITDA 30% stake retains significant upside potential Access to capital markets, scale and synergies Improved network proposition & turnaround Strong customer track record, now #3 player Market cap more than doubled since listing Synergies NPV increased to $9 10 bn Sale to Ströer to create leading German portal operator and online marketer Participation via 11.6% stake in Ströer 1 2 3 4 Europa Selective and minor FMC/ICT acquisitions in our core integrated markets, but only for attractive multiples TMA and TMNL: mobile attacker strategy US Un-carrier strategy Continue de-risking, self-funding, king maker asset Other Further monetization of assets if more value can be crystallized outside group Smaller technology M&A to strengthen business and innovation capabilities Minority shareholders: Opportunistic approach, only if economically attractive General policy No major acquisitions outside our footprint Strategy: Portfolio strategy 27
We reduce our indirect cost ex TMUS VARIABILIZATION OF COST (EX US) Share of direct and indirect 1 cost (ex US) DRIVEN BY REVENUE GROWTH AND INDIRECT COST REDUCTION bn 10.4 CAGR 1-2% driven by revenue growth - 0.8 bn - 0.4 bn 67% 65% -4pp 61% Ambition 50% 55% 19.3-1.8 bn indirect cost 1 reduction across all segments (ex US) GHS & Cons. - 0.5 bn - 0.1 bn 1 2 1 2 2014 2014-2018 Segment contribution Adj. direct cost (ex US) Adj. indirect cost 1 (ex US) 1) Before capitalization of labor Strategy: Cost reduction 28
The best team puts our strategy in action Leadership Diversity Responsibility Incentivation Talent management Qualification More collaborate, innovate and empower to perform. international mindset. clear leadership and ownership. raising the bar for overall success. international leaders & experts. skill development for future business. LEADING EUROPEAN TELCO Live new leadership culture Foster international job rotation Ensure clear end-to-end responsibility Link our incentive schemes to performance & share price Push for cross functional, cross segment careers Invest in training, up-skilling on all levels Strategy: Leadership culture 29
Operational and financial priorities per segment GERMANY EUROPE USA T-SYSTEMS MU Superior All-IP production model and INS rollout! No. 1 choice for customers via differentiation: superior networks First to move to pan-european All- IP production model No. 1 choice for customers via differentiation: best seamless connectivity Un-carrier strategy: 2.2 3.2 mn branded postpaid net adds in 2015! 300m pops LTE coverage YE15 TSI 2015+ Execution No. 1 choice for customers via differentiation: best networks & scalable platforms best customer experience best in class integrated products Revenue stabilization in 2016 EBITDA CAGR 1 2% 1! trust simple and personal products! Radical indirect cost savings Cash contribution CAGR 0.5% 1 2pp op. ROCE improvement Increased $9-10 bn NPV of Metro PCS synergies Updated 5-year growth rates 2 : Revenue CAGR 7 9% EBITDA CAGR 7 10% FCF CAGR 13 18% Security outstanding cloud experience! MU Revenue CAGR 3% 1 Positive TSI adj. cash contribution after 2016! 1) All CAGR s 2014 2018 2) 2012 2017 Financial Growth Strategy: Segments 30
COMPANY PRESENTATION OVERVIEW 01 Deutsche Telekom 02 Strategy & Transformation 03 Network, Products & Innovation 04 Service & Brand 31
INTEGRATED IP NETWORKS All-IP Transformation Pan-European Network Integrated network strategy 1 LTE rollout 2 Fiber 3 Vectoring PAN NET 4 Hybrid Access Device Hybrid LTE DSL Shift to IP-Platform until 2018 DT Technology leader European production model on IP-Basis Build out of modern infrastructures: LTE, Fiber/Vectoring etc. Integrated IP Networks 32
INTEGRATED NETWORK STRATEGY Infrastructure 1 LTE Roll-Out + 2 OPTICAL FIBER + 3 Vectoring + LTE Roll-Out D: 95% LTE PoP-coverage 1 in 2018 with up to 300 MBit/s EU: 75 95% 2 LTE-PoP-coverage in 2018 with up to 300 MBit/s Vectoring D: Introduction of super vectoring with more than 250 Mbps in cable footprint Optical Fiber D: Glass Fiber household footprint of 80% in 2018 with at least 50 MBit/s depending on regulatory adjustments EU: 50% of households 3 with at least 100 MBit/s in 2018, 12% of households 3 with up to 500 MBit/s 4 in 2018 HyBrid Access D: Download speed of up to 550 Mbps via hybrid in cable footprint 4 Hybrid Access Device Hybrid LTE DSL Hybrid Router 1) Outdoor coverage 2) Depending on country 3) In integrated footprint 4) FTTH, FTTB, FTTC, cable/ed3 (cable, esp. in Hungary with Euro-DOCSIS) Network Strategy 33
BEST NETWORK & NETWORK BUILD-OUT IN GERMANY Example Germany Leader in broadband quality for mobile and fixed network Innovative products Biggest bandwidths Best network coverage AWARDS For the fives time in succession: Telekom wins the major CHIP network test Connect network test: top position reinforced Connect readers choice 2015: winner of best mobile network provider, among others Network Germany 34
BEST Network EuropE Facts Europe LTE in all markets (AMC 2015) Testing LTE Advanced Fibre, Vectoring and Hybrid as Network-Booster Europe first IP-Network in Mazedonia and DT worldwide first company with Terastream Transformation to pan-european IP-network regional FaCTS 1.1 billion km 2 132 million Inhabitants 50 million Households Network coverage LTE coverage Europe wide IP-network 100 Mbit--supply 2018: 75 95% IP-voice coverage 2018 up to 9 million 2018 up to 50% 12 Countries Network Europe 35
PRODUCTS & SERVICES Consumers Business customers Innovation & Partner Services Cutting-edge mobile communications and broadband experience TV Online services Cloud products Information & communication technology (ICT) solutions Outsourcing & cloud services Intelligent network solutions for the health care, automotive and energy industries Partner for infrastructure access and network services Platforms & partnerships for innovative services Overview: B2C, B2B, Partner 36
PRODUcts & services consumers Cutting-edge broadband and mobile communications experience WiFi Optical fiber/vdsl Mobile communications/ mobile Internet Hybrid router IP telephony Entertainment Communication services Innovative services Smart Home Products: B2C 37
PRODUcts & services consumers EXAMPLE: GERMANY Service Cloud Communi- Cation MagentaONE Living Entertainment Magenta Home Magenta Mobil Products: MagentaONE 38
Entertainment (IP)TV and ENTERTAINMENT-services (IP) TV Entertainment-Services Deutsche Telekom footprint Deutsche Telekom footprint with (IP)TV service Music streaming via Spotify Unlimited music streaming with more than 30 million songs available anywhere over smartphone, tablet, or PC Integration of the Spotify premium service into Telekom rate plans and as add-on option (IP)TV in D/Europa, 9 countries in total >6 million TV customers Entertain in Germany: 3D & TV in HD quality with 250 channels (>100 HD channels)/50,000 content offers Entertain via satellite Entertain remote app Entertain to go: tablet, PC and mobile Netflix & Maxdome: Hollywood blockbusters and series highlights Fully integrated Entertain TV service: broad TV offer in German and English As an add-on option to Entertain in SD and HD quality Entertain Products: Entertainment 39
COMMunication Services CLOUD, Security, E-mail Telekom Cloud Photos, videos and music whenever, wherever from the cloud Deutsche Telekom s secure cloud: TÜV certification E-Mail made in Germany Security Telekom Security Package: Security everywhere reliable protection against virus etc. mobile and at home Insurance for mobile devices damages, theft, etc. DE-MAIL Secure/legally binding e-mail No letter, but signed and sealed Security in line with the De-Mail Act TelekomCloud End-to-End Service Data Protection Data Security Saves printing and postage costs Letters De-Mail Registered mail Faxes Products: Communication Serices 40
SMART HOME Smart Home Home control on the move Control the entire house with Smart Home via a smartphone app and save money as you do so. Enjoy the feeling of having everything under control: Demand-based heating no more cold homes Start washing machines and other appliances when on the move and save time and money Full control over windows, doors and shutters Networked smoke and motion detectors or HD surveillance cameras Control everything from a smartphone or tablet anytime, anywhere Products: Smart Home 41
PRODUCTS & SERVICES FOR BUSINESS CUSTOMERS AND INTELLIGENT NETWORK SOLUTIONS Information & communication technology (ICT) solutions Intelligent network solutions ICT EXPERTISE & Cloud Portfolio Dynamic it access (cloud computing) Automotive Collaboration Mobile enterprise (cloud services) Energy Health care Produkte: B2B 42
T-Systems performance Industry expertise IT & Telecoms expertise Pioneer in cloud computing Manages 70% of the top 100 companies in all industries across Germany No. 2 in EMEA for manufacturing No. 1 in Germany in the transport sector No. 2 in Germany in the utilities sector No. 3 in Germany in the public sector Integration of IT and telecoms: ICT delivery management, E2E monitoring and E2E SLA, ITIL-certified processes Customer-specific pricing models, e.g., price per workstation, per LAN port Dynamic services with flexible up- and downscaling No. 1 in the ICT market in Germany Nr. 2 in the German market for systems integration T-Systems has offered solutions via dynamic platforms for over 10 years More than 36,000 cloud systems operated worldwide More than 300,000 employees in customer companies communicate via T-Systems Dynamic Services for Collaboration As of: Q1/2014 B2B: Performance 43
Zero Distance presents new challenges for all decision-makers Drive innovation Customer expectations The shop comes to the customer The customer builds the product The product talks, the crowd acts User expectations Fast access Intuitive usability Users & business areas buy IT Keep the Engine Running Budgets & costs Capabilities & resources Stable operation B2B: Zero Distance 44
Zero Distance calls for transformation of ICT Transformation toward Cloud & Big Data Business intelligence Harmonization of IT-systems Multi-cloud management Collaboration Collaborative workplace structures Interaction with customers and partners Social business Mobile BYOD Management of mobile devices & apps Mobilization of business processes Security B2B: Transformation 45
MIGRATING INFRASTRUCTURE to the cloud Business requirement CIO Challenge Manage millions of end customers instead of 100 retailers! Launch new platforms in days and months instead of years! Data privacy Billing Differentiation of services Ecosystem Costs of transformation Compliance Product liability Access control Partners & Tier-1 suppliers Data analysis and utilization (big data) Highly flexible, reliable infrastructure (cloud) Faster provisioning of new systems (cloud broker) Data privacy & data security B2B: Cloud 46
Dynamic IT access (Cloud Computing) What is truly important Security Reliability Transformation Flexibility Data is governed by German data protection regulations IT infrastructure is protected against attacks Backed-up networks and secure access line Fail-safety (24/7 availability) Access from anywhere must be ensured at all times on an end-to-end basis Optimization of networks, servers and applications Cloud integration and migration Improvement of user experience Parallel use of private and public services Integration of the various virtualization methods Comprehensive sourcing and management of hybrid landscapes Integration of in-house services as required B2B: Cloud 47
Dynamic IT ACCESS (Cloud Computing) ReferenCeS Security Reliability Transformation Flexibility Cloud business collaboration platform Maximum security and compliance with German data protection regulations Transformation towards a high availability cloud Rapid growth requires flexible infrastructure Consolidation of business-critical IT services Worldwide consolidation of IT & processes towards one private cloud Big hybrid public and private cloud Combination of services from the public and private cloud based on requirements Customer s own security policy Auditability Multi-stage transformation with a fallback strategy Highest service levels and disaster recovery in order to safeguard business continuity Hybrid document management B2B: Cloud 48
TRANSFORM Collaboration Business requirement CIO Challenge Where do your Employees share large files? Dropbox? How quickly does feedback from customers reach the development team? How quickly does your supply chain react to changes? Sharing instead of sending Easy-to-use Data security Access rights Knowledge transfer All-IP Integration of external partners Collaboration tools with social media features available globally (dynamic workplace) Integration of social media into core applications Decision-making and management tools that support real-time processes beyond company boundaries B2B: Collaboration 49
COLLABORATION GLOBAL EXAMPLES Shell Automotive Industry Barmer GEK Cloud Readiness & Management Solutions Unified Communication & Collaboration Cloud Readiness & Management Solutions Unified Communication & Collaboration Web, Social & Mobility Enabling Services Archiving & Content Management Services Access & Voice Services Smooth collaboration among Shell teams spread across the globe Documents easier to locate Implementation of Shell s document management policies Scalability and cost efficiency of a hybrid cloud Scalability and flexibility at a fixed rate per workstation/month Platform and services always up to date and available Internal and external collaboration possible worldwide Standard platform for >100 online services available for Barmer and GEK sites Digital processes reduce burden on service employees More interaction with the customer, more user-friendly B2B: Collaboration 50
Mobile ENTERPRISE Business requirement CIO Challenge WHAT Services do you offer your customers on a mobile basis? Protect mobile data Link business apps with back-end Context-based services for customers mobile applications via secure connection Manage extensive variety of devices and operating systems Protect data effectively, including on fun devices Can your employees really work from any location? SIM cards BYOD Context-based services QR-Codes B2B: Mobile Enterprise 51
MOBILE ENTERPRISE SUCCESS STORIES Mobile Enterprise Services Luggage localized anywhere in the world, always arrives at its destination Administrative costs involved in luggage management are reduced Centralized collection, analysis and provisioning of luggage data Optimization of inefficient, costly public citizens offices Mobile information & communication center Data processing on site, e.g., using finger prints B2B: Mobile Enterprise 52
Intelligent network solutions provide T-Systems customers with new business models Energy Health care Connected car Services for the highly complex energy grid of the future Smart metering and gateway communications services Solutions for energy sector processes Smart home Smart grid services Solutions for connecting doctors, patients, hospitals, health insurance providers and care facilities Telematics Telemedicine/telemonitoring Digital processes Ambient assisted living (AAL) Hospital IT Integration of cars and trucks into the Internet and company processes Cloud infrastructure and operation of the open Business2Car platform Telematics services Connectivity (M2M/broadband) THE INTELLIGENT NETWORKING OF DEVICES AND SYSTEMS IS THE GROWTH DRIVER FOR NEW TECHNOLOGIES B2B: Intelligent Network Solutions 53
PARTNER SERVICES & PLATFORMS Platforms & partnerships for innovative services 1 4 2 3 Media distribution Partner services for infrastructure Connected home Internet and product partnerships Machine-to-machine communication BusinessMarketplace Access/voice services/ network service Partner for business customers Partner & Platforms 54
partner services for infrastructure Partner for infrastructure access and network services Fixed-network and mobile products for service providers and partners Network access, lines and data transportation Voice services Network and upstream services Services within the Deutsche Telekom network Partnerships with international telecoms partners Fixed network Access: unbundled local loop line, bitstream access; contingent model Network services: transmission paths, carrier service networks (customized solutions for carriers) and infrastructure services Voice: interconnection for STN/NGN, access to added-value services Mobile Products for the conventional retail and discount market M2M & data solutions, new markets Network build-out Partnerships on building out (FTTH) infrastructure New products & services Mobile communications optical fiber connection Outsourcing services Support services Partners & Platforms: Infrastructure 55
PARTNER FOR MEDIa DISTRIBUTION TOLINO Tolino Vision e-reader Partnering with the biggest book dealers in Germany Biggest collection of reading material on the market with more than 1.2 million titles In-device storage for up to 2,000 ebooks Open ecosystem Battery life of up to 7 weeks 25 GB cloud storage free of charge for books Access to content free via WiFi and 40,000 Telekom HotSpots Partners & Platforms: Tolino 56
PLATFORM FOR THE CONNECTED HOME QIVICON Partner platform for the connected home/home automation Open and independent platform for partners Standardized solutions for flexible, easy integration of partners Success is evidenced by the more than 20 development, consulting and sales partners on board; number growing steadily Partners & Platforms: Qivicon 57
PARTNERING Innovation With PartnERS Cloud Music streaming Security Digital Lifestyle devices Mobile Security solutions Partnering 58
M2M/Machine-TO-Machine Automatic Information exchange between machines/devices (machines, automates, cars, container etc.) 1 M2M solutions from a single source Partner model offers wide spectrum of industry solutions 4 2 3 Transport and Logistics Personal Health Agricultural Daimler: connected car fleet management Lucom: remote service for car wash automatisation Rimova: baggage tracking Ista: supply data Provedo: smoke detector Locca: mobile locating Tele health: health data DRK: connected beds Limmex: emergency clocks Medria: vital data (cows) Partners & Platforms: M2M 59
PLATFORM FOR CLOUD SERVICES BUSINESS MARKETPLACE Partner platform for cloud services for small and medium-sized enterprises Marketplace for business applications Open partner solution for software providers BusinessMarketplace Software Workplace Security Plattform Infrastructure Collaboration as a cloud service Partners & Platforms: Cloud 60
INNOVATION Vital TO OUR SUCCESS Culture of innovation Promoting innovation Start-up mentality: never simply accept the status quo Breaking free of the silo mentality Culture of openness: share and advance ideas Seeing mistakes in a positive light Tolerance of failure and more respect for new ideas Innovation in infrastructure Core networks Efficient and secure transportation of constantly growing volumes of data IT infrastructure Standardized interfaces for in-house and partner products Innovation in products Network-based offerings Foster core business with innovative services and differentiated connection quality levels Platforms Interfaces between customers and partners with network-based and network-independent products, supported by APIs and marketing Innovation in service Service channels Improve the customer experience and optimally serve customer needs online and in person Service processes More efficient, faster, and more flexible processes Innovation: Overview 61
FOCUS ON INNOVATION NEW IDEAS COME FROM IN-HOUSE DEVELOPMENTS & PARTNERS innovation: VITAL TO SUCCESS! In-house developments Partnerships & cooperation Start-up backing & shareholdings DeutschlandLAN MyPhonebook IPTV Programm Manager HomeTalk app Railne HotSpot-finder Customer Center App Entertain Photo share app Inflight Digital Business Unit T-Labs T-Systems Innovation Center T-Venture Hubraum Innovation: Overview 62
INNOVATION THINK TANKs Digital Business Unit T-Labs T-Systems Innovation Center T-Venture Hubraum Incubator Group-wide development and management of innovative products, services & business models Core task areas: innovation management, platform business, product development, device and partner management Development and backing of new ideas in start-ups and spin-offs Support/challenge/ rethink Integration of customers/partners directly into the innovation process Development of new ideas and solution approaches Access to young, talented individuals through university partnerships Investment in/venture capital for innovative business ideas Key facts 2001-2013: 129 investments EUR 396 million invested 32 exits Objective: to generate profit and synergies Backing/active realization of new business models from start-ups 8-week program in cooperation with General Assembly and Betahaus Innovation: Think Tanks 63
INNOVATION SUCCESS STORIES Example: Entertain In-house development IPTV market launch in 2006 Multi-functional, networked & interactive Entertain to-go: via tablet, PC & smartphone Example: mytaxi.net Advancement of business idea by Intelligent Apps GmbH Launched in 2011 Went international in 2012 Revolutionizing the taxi market 2014: successful realization/profitable Exit (sale) Innovation: Success Stories 64
COMPANY PRESENTATION OVERVIEW 01 Deutsche Telekom 02 Strategy & Transformation 03 Network, Products & Innovation 04 Service & Brand 65
BEST CUSTOMER SERVICE EXAMPLE: Germany Awards for customer service Awarded regularly: TÜV technical inspection service s good seal for customer service European Business Award: EU accolade awarded for excellence and an innovative and successful business model throughout Europe Customer service 83 million customer contacts per year 70 million phone calls per year 13 million letters/faxes/e-mails per year Customer service in Web 2.0: Telekom helps on Facebook and Twitter feedback platform Technical service 20,000 technical service employees Daily workload (ø): 25,000 customer lines provisioned 18,000 customer contacts by phone 7,000 on-site installations 19,000 customer line faults cleared Best Customer Service 66
UNSERE MARKENPOSITIONIERUNG ERLEBEN, WAS VERBINDET OUR BRAND POSITIONING LIFE IS FOR SHARING Brand Positioning 67
OUR BRAND POSITIONING LIFE IS FOR SHARING International Brand Active Tv Commercials Brand Positioning 68
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