Deutsche Telekom CEO outlines investment strategy for revenue growth

Deutsche Telekom CEO Tim Hottges has outlined how the telecom operator’s investment strategy is paying off.

Deutsche Telekom is making huge investments in mobile networks at a time when some of the leading telecom operators are shying away from their Capex programs to build more and more profit.
Deutsche Telekom network EuropeDeutsche Telekom invests more than all of its competitors put together, Tim Hottges said at this year’s shareholders’ meeting in Bonn.

Deutsche Telekom

# Germany should auction 5G spectrum on reasonable terms
# Germany to hold 5G auctions in early 2019
# Fiber should be free from regulation
# More competition

Tim Hoettges said that infrastructure arm Deutsche Funkturm would build 1,200 sites this year and 2,000 next year. By the end of 2018, Deutsche Telekom aims to offer fast LTE mobile services to 95 percent of its customers in Germany and Europe.

The Germany-based mobile operator spent 5.4 billion euros on mobile networks and new data centers in Germany in the last year. Deutsche Telekom, which has 40 percent of broadband share, will provide 80 percent of households and companies with high-speed Internet by the end of the year.

UK-based Vodafone is buying Liberty Global’s European assets in a $22 billion deal to take on Deutsche Telekom’s leadership in Germany.

“In terms of broadband build-out, Deutsche Telekom was pursuing a strategy of “billions for millions,” said Tim Hottges.

Deutsche Telekom’s broadband strategy is to provide 26 million households with up to 100 Mbit per second, and 15 million households with as much as 250 Mbit per second, by the end of the year.

Tim Hottges has called for increased competition in Germany, saying that other companies must also invest in new networks, instead of simply criticizing or “staying cozy in regulated markets.”

The demand for more competition in Germany, the home market of Deutsche Telekom, assumes significance because of the Vodafone-Liberty deal. But Tim Hottges is facing a similar situation in the U.S. where he is building consensus for the deal between T-Mobile US and rival Sprint.

Deutsche Telekom’s US subsidiary a few years ago was losing wireless customers, posting weak profits. The break-up fee received from AT&T following the break-down of its deal due to telecom regulation assisted Deutsche Telekom for making investments in network and spectrum.

Deutsche Telekom has rolled out the Internet of Things (IoT) network of machines and sensors in eight European countries, plus the United States.

“5G is of particular strategic importance for Europe, and the investments for network build-out must be taken into account in upcoming spectrum auctions. Spectrum should be awarded uniformly throughout Europe,” Tim Hottges said.

Deutsche Telekom earlier said its revenue increased 2.5 percent to 74.9 billion euros, with 3.8 percent growth in adjusted EBITDA to 22.2 billion euros.

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