Deutsche Telekom is growing faster than ever. The company previously pursued the strategic goal of becoming the leading European telco. These efforts are reflected in good financial results today. Yet customers, markets, and the underlying technologies are changing. Deutsche Telekom continues to develop its strategy in response.
The goal is clear: turn customers into fans. Deutsche Telekom wants to adapt to their needs in the long term. For the company, this means ongoing investments in its networks, to enable even more customers to take part in digital life. The core of its strategy remains: building and operating the best networks, in which fixed-network and mobile services interact perfectly – or, in the trade lingo, become “convergent”. The core of the company’s strategy also includes digitalizing its own products and processes.
A new framework
The background: The information and telecommunications sector operates in an increasingly digitalized ecosystem, in which new competitors are building telecommunication services without having their own networks and simply offering them over the cloud. And they’re doing it extensively and internationally. Simply based on software and virtual, for example, creating private corporate networks or entire telephony systems for large call centers, as well as collaboration suites from the cloud. Customer needs are also changing rapidly due to these trends among other factors. Deutsche Telekom is seizing on these changes. And if there’s a common denominator for its strategy, it’s:
Digitalize, digitalize, digitalize
Deutsche Telekom is changing trajectories and becoming a software company that sells telecommunications services. One thing is clear: Whether it involves the company’s products and services, market approach, production, or processes, Deutsche Telekom has to digitalize in all areas to continue the successful journey it started years ago. With its footprint in Europe and the United States, it is ideally positioned to do so. Its aim is to become the Leading Digital Telco.
To achieve this, Deutsche Telekom has re-aligned its strategy and refined its growth areas:
- Lead in digital life and work
Customers should always have the best network experience, anytime, anyplace, no matter whether they’re in the fixed network, the mobile network, or using alternative access technologies. Deutsche Telekom wants its products and services to enable its customers to participate in an increasingly digitalized society in both their personal and professional lives – for example, when working from home. Achieving seamless interaction between its products is its primary objective. In the future, they will be context-aware and personalized. In other words, the networks and services will adapt to a customer’s current situation – whether that customer is a gamer, a drone pilot, or an employee working from home. To this end, Deutsche Telekom will be converging all the necessary data in future and establish advanced data analytics and AI capabilities.
- Lead in business productivity
Deutsche Telekom also wants to be the first choice in future for multinational companies with international connectivity requirements – specifically, being where the customers are. To do so, the company is strengthening its delivery capabilities for premium internet access. Software-based services are expanding its product portfolio. In the future, companies will be able to link their international subsidiaries with their corporate networks with just a few clicks, for example. Deutsche Telekom is positioning itself as a preferred digitalization partner for business customers. Security by design will play a key role here.
- Magenta Advantage
Alongside its core business, Deutsche Telekom is developing new digital business models, based on its existing reach and other differentiating aspects. Its 200 million mobile customers and numerous shops worldwide alone open up enormous potential. Deutsche Telekom wants to make digital services from partner companies available to its customers. Everyone will benefit from this step. Consumers will have access to fantastic exclusive offers. Partner companies will flourish. We create the "Magenta Advantage" for our customers, partners and Deutsche Telekom itself!
In addition, Deutsche Telekom is adapting its networks and production platforms to future customer needs. Telecommunication networks used to consist of monolithic blocks of network elements, which contained hardware and software from the same vendor. Today, technical progress in disaggregation and virtualization (i.e., separation of hardware and software) is making it possible to move more and more network and communication features to the cloud, enabling the creation of the Telco as a platform. With this step, the company’s own technical infrastructure can be connected with partners easily. In other words, Deutsche Telekom’s services become usable by others via interfaces.
And vice versa, Deutsche Telekom can use partner networks for its customers, orchestrating a “network of networks” for them, including third-party infrastructure.
The transformation of Deutsche Telekom continues to make progress. In addition to staff restructuring, this also involves strong maxims:
- We won't stop until everyone is connected.
- We take our social and societal responsible seriously, for example, we tightened our climate goals.
- We are focusing more on digital skills and are looking for tech talents.
- Our culture and our Guiding Principles are reflected in our future strategy.
- Our T brand will remain the key element of what we do: in Germany, in Europe, and in the United States.
To summarize: Deutsche Telekom is taking advantage of its favorable position to digitalize systematically and thus to transform itself from its position as Leading European Telco into the Leading Digital Telco.