Telecom Lead Europe: Deutsche Telekom has drafted new business models and strategies to transform to telco plus by focusing on new business areas.
Deutsche Telekom focuses on growth areas such as mobile Internet, connected home, intelligent networks, and cloud services to combat revenue losses in traditional telecom services.
“We are investing to grow again. In 2014, we want to stabilize revenue in Germany, in Europe we expect income – adjusted for regulatory and exchange rate effects – to rise and we also anticipate growth in the United States,” said Deutsche Telekom chairman René Obermann.
“We are seeing encouraging developments with the key issue of regulated network access and vectoring, which turns the copper cable into a high-speed line,” Obermann said.
If the Federal Network Agency maintains its line and issues the rulings it has announced, Deutsche Telekom will flick the switch and invest additional billions in the network roll-out.
Deutsche Telekom is increasing its capital expenditure to almost €30 billion in the next three years.
Deutsche Telekom’s Capex for the first quarter of 2013 exceeded €3 billion, up 40 percent. The 40 percent growth in expenditure is primarily due to the acquisition of spectrum in the Netherlands.
The European telecom operator also invested heavily into networks during the period. Deutsche Telekom’s net revenue decreased 4.5 percent to €13.8 billion. EBITDA declined 4.3 percent to €4.3 billion.
By 2015, the growth areas should be contributing 40 to 45 percent of total revenue, compared with 24 percent in 2010. The main driver is mobile Internet, where revenue is to grow to around EUR 10 billion by 2015.
The Federal Network Agency’s draft decision on vectoring is heading in a direction compatible with the planned broadband expansion in the German fixed network.
Vectoring will allow bandwidth to be doubled instantaneously. In the coming years, investments of around €6 billion are planned for the roll-out of vectoring and optical fiber to offer transmission speeds of up to 100 MBit/s.
These investments are to be underpinned by differentiated price models for surfing in the fixed network from 2016 onward. The new rate plans are expected to include much higher volumes of data than the average customer needs.