Deutsche Telekomwatch Report #132 - February 2024

Executive Brief:

Key people moves in recent weeks have included the appointment of a new DT boardroom representative at the UK’s BT Group, with some clear readthrough regarding its priorities for future ties with the challenged operator (including the possibility of them being brought to an end). Its last delegate, former T-Systems CEO Adel Al-Saleh, was appointed back in 2020, when things were different and DT’s leadership appeared primarily focused on how to enhance collaboration with BT on common problems such as legacy burdens and stunted B2B profitability. Since then, things have got even more complicated in BT and DT’s ties, with the former’s continued share price slump depressing the worth of DT’s stake and allowing Patrick Drahi’s Altice group to opportunistically build up a sizeable minority holding in the UK operator. The appointment of Chief Operating Officer Raphael Kübler, an exec with high-level operational and M&A knowhow, seems designed to help DT draw a line under relationship turbulence, one way or another. [pp.6 –8.]

Within DT’s own operations, many of the New Year people moves that have emerged so far have had a digitisation and transformation theme, tying in with DT’s ongoing focus on cost savings through tech and organisational change. There has been a leadership switch at Telekom Deutschland’s Fiber Factory function — engine room of the German FTTH build mega-project — as well as a new, SVP-level job for T-Mobile US software lead Meg Knauth, within the operator’s Technology division, and a senior, cross-function efficiencies appointment at T-Sys. [pp.9 –12,25,26.]

Also of note on the recruitment scene has been the reuniting of two former senior figures at DT — Dirk Wössner and René Obermann — at privateequity player Warburg Pincus, to scope out investment opportunities in Europe’s telecoms and tech sectors from the group’s Berlin office. [pp.9 –12.]

GERMANY: TDE has continued to build up its forces for a long-planned push into cable rivals’ housing association heartland, aided by the imminent removal of their “nebenkostenprivileg” (“additional cost privilege”) advantage for retaining clients. The German NatCo has already been seeking gains in advance of the change, by offering a period of ‘free’ or discounted services to housing tenants that switch to its services — and has now refreshed its flagship MagentaTV platform to back up the campaign. Rival Vodafone Group’s latest results presentation saw channelling of analyst concern over how badly its German business will be hit by the regulatory change. [pp.16 –18.]

TDE has also had positive news on another competitive front, via an unspectavcular update from challenger 1&1 on its troubled setup process as a full-fledged MNO. It conceded it still has only about 100 antennas up and running to support its own network, and thus remains heavily reliant on roaming partners Telefónica Deutschland and Vodafone Germany. [pp.19 –21.]

In the B2B space, Deutsche Telekom Multimedia Solutions, the Group’s recently realigned digital services unit, continues to widen its Web3 ecosystem by becoming a validator of the Fetch.ai blockchain network. It has become the first corporate partner of the non-profit organisation that runs Fetch.ai, and will work alongside co-founder Bosch to develop the network for industrial applications combining blockchain and AI tech. [pp.22,23.]

EUROPE: Two new deals have been highlighted in the Europe segment by existing Group suppliers. Amdocs secured wins with Magenta Telekom and Magyar Telekom, both focused on upgrades to charging control systems. Hrvatski Telekom retained Ericsson Nikola Tesla as its exclusive radio access network supplier. ENT gained a similar deal on HT’s core only a few weeks ago. [pp.29 –32.]

USA: In a similar vein,two contract wins have been announced by members of T-Mobile US’s vendor old guard. Netcracker landed a repeat win with the operator’s Wholesale division, supporting TMUS’ bet on MVNO and IoT partnerships as a future driver of revenue growth and monetisation of its huge spend on 5G. TMUS plumped for Nokia’s new gateway product to supercharge its5G Home Internet fixed wireless offering. [pp.36 –41.]