Profile: Deutsche Telekom AG (DTEGY.PK)

DTEGY.PK on OTC Markets Group

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31 Jul 2015
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Deutsche Telekom AG (Deutsche Telekom) is an integrated telecommunications provider offering its customers around the world a portfolio of services in the areas of telecommunications and information technology (IT). Since July 1, 2009, the Company operates through five segments: Germany, which combines all fixed-network and mobile activities in Germany and also includes wholesale telecommunications services for third-party domestic carriers and service providers, as well as the Company’s other operating segments; the United States, which comprises all mobile activities in the United States market; Europe, which covers all activities of the mobile communications companies in the United Kingdom, Poland, the Netherlands, the Czech Republic and Austria, as well as the International Carrier Sales and Solutions unit, which mainly provides wholesale telecommunications services for the Company’s other operating segments; Southern and Eastern Europe, which comprises all of Deutsche Telekom’s fixed-network and mobile communications operations in Hungary, Croatia, Slovakia, Greece, Romania, Bulgaria, Albania, the F.Y.R.O Macedonia and Montenegro, and Systems Solutions, which bundles business with information and communication technology (ICT) products and solutions for multinational corporations and public institutions under the T-Systems brand.

During the year ended December 31, 2009, the Company acquired an additional 5% in Hellenic Telecommunications Organization S.A. (OTE), bringing its total shareholding to 30%. In addition, in 2009, the Company announced a joint venture between T-Mobile UK and Orange UK in the United Kingdom.

The Company’s fixed-network business includes all voice and data communications activities based on fixed-network and broadband technology. These product offerings are marketed as basic telephony services, or single-play, telephony and high-speed Internet access, or double-play, and packages comprising voice communication, high-speed Internet access and television with interactive television-based services, or triple-play. Its fixed-network business also includes the sale of terminal equipment and other hardware, as well as the sale of services to resellers. Its mobile communications business offers digital mobile telephony voice services and data services, such as short message service (SMS), multimedia messaging service (MMS), mobile Internet and other data services, to retail and business customers. Terminal equipment and other hardware are sold in connection with the services offered. In addition, its mobile communications services are sold to resellers and to companies that buy network services and market them independently to third parties, such as mobile virtual network operators (MVNOs). Through its mobile communication subsidiaries, the Company also operates carrier-owned networks of wireless local area network (W-LAN) (WiFi) HotSpots in Europe and the United States.

Deutsche Telekom offers mobile voice and data services on both a contract basis and a prepay basis. Its mobile communications customers generally purchase contract services on the basis of fixed monthly fees, and pay time-based airtime and per-message fees. Some contract service offerings include a specified amount of airtime, data volume or messages in the monthly fee. Prepay services are purchased on the basis of monetary increments that are recorded on the customers’ Subscriber Identity Module (SIM), cards and then deducted, based on airtime or messaging usage fees, as the cards are used. Usage fees can vary according to the rate plan selected by the customer, the day and time when a call is made, the destination of the call, the location where the call originates and, in some cases, other terms applicable to the rate plan, such as whether the called party is also a customer of the same network. Furthermore, some contracts allow unlimited usage at a set monthly rate.

The Company offers national and international roaming services to its customers through a number of roaming agreements with third-party operators, which allow customers to access mobile services while outside their home network service area. W-LAN services are sold on both a monthly subscription basis and through various usage-based plans. Its mobile communications subsidiaries provide their customers with access to its specific and third-party content services, as well as to the open Internet. Content provided to customers is either at no additional charge, in which case the customer only has to pay the normal connection charges to view the content, or it is premium content, where a customer pays a specific charge through the customer’s mobile telephone bill to access the content.

Germany

The Germany operating segment comprises Deutsche Telekom’s mobile operations in Germany. Since January 1, 2009, fixed network has been responsible for the small- and medium-sized business customers that were previously included in the System Solutions operating segment. The Company’s Germany operating segment also includes certain of its telecommunications facilities operations, including the operation, management and servicing of its radio transmission sites in Germany. Through its fixed network business, the Company offers network access, including analog, universal/ integrated services digital network (ISDN) and Internet protocol (IP) access, as well as calling services to individual, business and wholesale customers.

Analog access lines, which the Company markets under the name Standard, permit the customer to use a single telecommunications channel for voice, data or facsimile transmission. ISDN/Universal access lines, which are marketed under the name Universal, permit a customer to use simultaneously two telecommunication channels to provide multiple products and services, including voice, data and facsimile transmission. IP-based access lines provide services, such as telecommunication, Internet protocol television (IPTV) and data transfer, as well as other services to retail customers at home and elsewhere. Through the network access product offerings, the Company provides national and international calling services and dial-up Internet access, and also offers services, such as three-way calling, call-waiting and caller identification (ID). In addition, its portfolio of integrated products, called Complete Packages (Komplettpakete), includes an access line and a variety of flat-rates and services for telephony and Internet access.

The Company offers broadband and IP services based on asymmetric digital subscriber line (ADSL), ADSL2+ (advanced ADSL) and very high-speed digital subscriber line (VDSL) technologies, which combine a high-speed data download transmission speed with a lower upload transmission speed, primarily to retail customers. It also offers Complete Packages with a flat-rate component, including offerings for voice communication and high-speed data access. The Company offers Complete Packages with television services under the brand Entertain. Its Entertain products are offered in a basic version, which includes voice, data and television services, and an enhanced version, which includes a variety of additional services, including high-definition television (HDTV), timeshift, program manager and television-archive. In 2009, the Company introduced a new Entertain product, under the name Entertain pure, which comprises a telephone and television connection without Internet access. In 2009, it also launched LIGA total! product range. With Entertain, customers can watch all first- and second-division Bundesliga soccer matches on television for an additional charge. Its broadband product portfolio also includes a variety of Internet Website services provided by the Scout-Group, as well as the Load product portfolio, which includes video, game, software and music offerings available for download.

Deutsche Telekom, through its wholesale services business, provides products and services, including access, interconnection, IP and network services, to third-party domestic carriers and service providers, as well as other subsidiaries in accordance with regulatory guidelines stipulated by the Federal Network Agency. Network operators and service providers implement their own business models based on its wholesale services, such as unbundled local loop (ULL) lines, bitstream access or resale, including the Wholesale Internet Access (WIA) and WIA Gate product options. Unbundled local loop lines (ULL), can be leased by third-parties to provide their customers with telephone and Internet services or digital subscriber line (DSL)-based products. Through its wholesale bundled product, the Company leases DSL lines combined with one of its standard access lines to third-party providers and then transport the data from its network to the third-party’s network. The Company also sells broadband access to competitors through its Wholesale bundled products, which enable third-party operators to offer an integrated service combining access and IP services to their retail customers under their own brands.

Deutsche Telekom’s interconnection wholesale services primarily consist of call origination and the transit and termination of switched voice traffic. The terms under which the Company interconnects its telephone network with the networks of other domestic carriers and service providers are either bilaterally negotiated or imposed by the Federal Network Agency. At December 31, 2009, the Company had 117 national bilateral interconnection agreements and 45 national interconnection orders issued by the Federal Network Agency. The Company provides additional wholesale services, including Internet transport services for broadband and fixed network service providers, such as virtual Internet service provider (ISP) services, as well as transport services for carrier interconnection; leased lines, which can be used both for the transmission of data and for voice traffic and are tailored to fit the specific needs of carriers and mobile network operators and Carrier Services Networks, which combine leased lines with network management services.

The Company’s other services primarily includes value-added telephone services; terminal equipment business; data communications solutions; support services and publishing services, and the sale of products and services through its Telekom Shop outlets and services for energy-based products used to operate telecommunications systems. Through T-Mobile Deutschland, the Company offers mobile telecommunications services to individual and business customers in Germany. T-Mobile Deutschland offers mobile telecommunications services, including voice, SMS, MMS, mobile Internet and other data services to consumer and business customers in Germany. At December 31, 2009, T-Mobile Deutschland had approximately 39.1 million customers, including approximately one million machine-to-machine (M2M) cards in use.

United States

The United States segment offers mobile voice and data telecommunications services to individual and business customers in the United States through T-Mobile USA. At December 31, 2009, T-Mobile USA had approximately 33.8 million customers. Of the total customers at December 31, 2009, approximately 79% were contract customers (including M2M customers). As of December 31, 2009, T-Mobile USA’s third-generation (3G) network covered over 205 million people. The United States operating segment comprises all of Deutsche Telekom’s wireless activities in the United States market and offers mobile voice and data services to consumers and business customers through T-Mobile USA. Mobile devices and accessories are usually sold in connection with the services offered.

In 2009, T-Mobile USA introduced its Even More rate plans, which feature unlimited nationwide voice, text, and data services. In addition, T-Mobile USA offers its customers a number of service options, including rate plans with and without contracts, the ability to pay in advance or in arrears, and rate plans with and without subsidized handsets. T-Mobile USA sells its products and services to retail customers through a network of direct retail stores. T-Mobile USA provides its customers with access to T-Mobile USA specific and third-party content services, as well as to the open Internet. Content provided to customers is either at no additional charge, in which case the customer only has to pay the normal connection charges to view the content, or it is premium content, where a customer pays a specific charge.

Europe

T-Mobile UK offers mobile telecommunications services to individual and business customers in the United Kingdom. As an MVNO, Virgin Mobile purchases airtime minutes and basic mobile services from T-Mobile UK and resells these minutes and services under the Virgin Mobile brand name. On November 5, 2009, the Company and France Telecom entered into an agreement to merge their mobile units in the United Kingdom. Through Polska Telefonia Cyfrowa Sp.z o.o (PTC), the Company offers mobile telecommunications services to individual and business customers in Poland. It holds a 97% interest in PTC. Through T-Mobile Netherlands, the Company offers mobile telecommunications and broadband fixed-line services to individual and business customers in the Netherlands. Through T-Mobile Czech Republic, Deutsche Telekom offers mobile telecommunications services to individual and business customers in the Czech Republic and since December 31, 2009, fixed line services. The Company holds an interest of approximately 61% in T-Mobile Czech Republic. Through T-Mobile Austria, the Company offers mobile telecommunications services to individual and business customers in Austria.

Southern and Eastern Europe

The Company’s Southern and Eastern Europe (SEE) operating segment includes the fixed-network and mobile communications subsidiaries of T-Hrvatski Telekom, Slovak Telekom, Magyar Telekom, Makedonski Telekom, Crnogorski Telekom and the OTE group, including OTE, COSMOTE, Romtelecom, COSMOTE Romania, Globul (Bulgaria) and AMC (Albania). The Company holds a 59.2% interest in Magyar Telekom. Magyar Telekom offers telecommunications services, such as fixed-line and mobile telephone services, data communications services, wholesale services, IP/Internet services, multimedia broadcast services and other services for customers throughout Hungary. T-Mobile Hungary, the mobile brand of Magyar Telekom, offers mobile telecommunications services to individual and business customers in Hungary.

Deutsche Telekom owns 51% of T-Hrvatski Telekom. T-Hrvatski Telekom offers access and local, long-distance and international fixed-line telephone services, data communications services, IP/Internet services, including IPTV, and wholesale services and mobile telecommunications services through T-Mobile Hrvatska d.o.o. (T-Mobile Croatia), to individual and business customers in Croatia. As of January 1, 2010, T-Hrvatski Telekom merged its fixed network and mobile communication businesses. T-Hrvatski Telekom operates a digitalized fixed-line telecommunications network and a fiber network. Through its wholly owned subsidiary, T-Mobile Croatia, T-Hrvatski Telekom offers mobile telecommunications services to individual and business customers in Croatia. At December 31, 2009, T-Mobile Croatia had approximately 2.8 million customers.

The Company holds a 51% interest in Slovak Telekom. Slovak Telekom offers access and local, long-distance and international fixed-line telephone services, data communications services, wholesale services, and IP/Internet services. In January 2010, Slovak Telekom launched satellite television services. Through its wholly-owned subsidiary, T-Mobile Slovensko, Slovak Telekom offers mobile telecommunications services to individual and business customers in Slovakia. At December 31, 2009, T-Mobile Slovensko had approximately 2.4 million customers. OTE is a full-service telecommunications provider of fixed-line voice telephony and IP/Internet access services to residential and business customers in Greece. It also provides data communication services, wholesale services and satellite telecommunications services.

OTE holds a 54.01% interest in RomTelecom S.A. (RomTelecom). RomTelecom offers fixed-line, data communication, IP/Internet, wholesale and satellite television services. OTE’s subsidiary, Cosmote S.A., holds an interest of 70% in Cosmote Romania, with RomTelecom holding the remaining 30%. Cosmote Romania is a global system for mobile communications (GSM) (second generation (2G)) mobile telecommunications provider in Romania. In 2009, Cosmote acquired Telemobil S.A. (Zapp). Cosmote S.A. (Greece) owns 100% of Globul, a mobile telecommunications operator in Bulgaria. Globul also holds a license for the construction, maintenance and use of a public telecommunications network for data transmission and the provision of public telecommunications services in Bulgaria, and has the right to use microwave frequencies and the right to provide leased lines. As of December 31, 2009, Globul had 3.9 million customers.

The Company’s other operations includes its operations in Albania, the F.Y.R.O. Macedonia and Montenegro. Through the 97 %-owned, COSMO-Holding Albania, and the acquisition of a 12.5% stake during 2009, directly by Cosmote, Cosmote indirectly holds a majority (effective 95%) in AMC, a mobile telecommunications subsidiary in Albania. AMC’s network operates on the GSM 900 and GSM 1800 frequencies in Albania. In the F.Y.R.O. Macedonia, the Company offers fixed network communications through Makedonski Telekom, which is majority owned by Magyar Telekom. It offers mobile telecommunications services through T-Mobile Macedonia, a wholly-owned subsidiary of Makedonski Telekom. In addition, Magyar Telekom has a stake of 76.5% in Crnogorski Telekom, which provides fixed-network and mobile telecommunications services in the Republic of Montenegro.

Systems Solutions

Deutsche Telekom’s Systems Solutions operating segment, through T-Systems, provides ICT services worldwide, primarily to multinational companies, government agencies and non-profit organizations. In 2009, the Company transferred the operations of its small, medium and large business customers from T-Systems to its Germany operating segment. T-Systems’ service offering portfolio includes standardized service offerings and individual solutions tailored to the specific needs of its customers. T-Systems supports its customers through its global telecommunications and information technology (IT) infrastructure networks. T-Systems’ primary markets are located in Germany and the rest of Western Europe. T-Systems’ operations are supported by the activities of Detecon International GmbH (Detecon) and T-Systems Multimedia Solutions GmbH. Detecon offers its customers integrated management and technology consulting, and operates worldwide with a focus on consulting for the telecommunications market. T-Systems Multimedia Solutions GmbH develops Web-based solutions for T-Systems’ customers, with a focus on e-commerce and information and knowledge management.

Corporate Customers is the sales unit of T-Systems International GmbH serving over 400 biggest customers of Deutsche Telekom, including its customers of the public and health sector. ICT PreSales is responsible for bid management and provides solutions to fit the customers’ needs. ICT PreSales supports the operative sales units through the entire sales process until closing the deal. Big Deal Management is responsible for the development of large volume and strategically relevant deals in selected geographic areas, including the initial sales phase, closing the transaction, and transition to the appropriate service and delivery unit. Sales Operations Management is responsible for maintaining the same methods and processes relating to the main functions within Corporate Customers and sales operations, as well as account and sales management support. Business Operations and Excellence bundles different tasks and projects across the Corporate Customers Unit, such as complaint management, Six Sigma for enhanced quality management, support for the chief security officer (CSO), interaction among employees, management and its KAM.

The International Operations and Services unit has been established to support the international operations of T-Systems’ customers and the international activities of T-Systems. This unit supports the account, sales and bid management activities and oversees the roll-out of management and strategic programs globally. The unit manages international activities together with the management of the countries. The ICT Operations delivery unit is responsible for providing services relating to customer ICT infrastructure, including computing services, desktop services, application services and telecommunications services. ICT Operations integrates the solution and process design. ICT Operations has three main service lines: desktop services and solutions, computing services and solutions, and telecommunications services and solutions.

The Desktop Services and Solutions service line is responsible for the development and implementation of complete office systems solutions with the responsibility for IT infrastructure. Other core services include stand-alone office systems solutions, including desktop operations, call-center and help-desk services, as well as the operation of computing services infrastructure, consulting and IT design. Computing Services and Solutions provides customers with the ability to outsource their entire IT operations. The services offered include the operation of data centers, application management, user support and network management. Other services offered include the installation, operation and administration of central and open computer systems, data center infrastructure services and business applications. Telecommunications Services and Solutions manages the development, construction and operation of T-Systems’ German and international service platforms, based on transport capacity leased primarily from its Germany operating segment and, to a lesser extent, from other providers.

The Systems Integration delivery unit focuses on IT integration projects, application management and application development. Systems Integration provides advice and assistance for a company’s entire plan-build-run lifecycle. Its primary focus is on solution design and architecture, IT projects and solution and application development, including testing and application lifecycle services. Systems Integration focuses on the introduction of uniform processes, general standards, methods and tools and enhancing the re-usability of modular solutions. In addition, Systems Integration supports T-Systems international activities through its delivery network, which provides sales and services to international customers by offering them tailored, efficient solutions and service components.

The Company competes with Pannon, Vodafone, VIPnet, Tele2, Orange, Telefonica O2, Wind Hellas, M-Tel, Vivatel, O2, 3, Polkomtel, Centertel, P4, KPN Mobile, MobilKom (under the brand U:Fon), Verizon, AT&T, Sprint, Kabel Deutschland GmbH & Co. KG, Versatel AG, NetCologne Gesellschaft fur Telekommunikation mbH, Telefonica (HanseNet subsidiary) and E-Plus.

Company Address

Deutsche Telekom AG

Friedrich-Ebert-Allee 140
BONN     53113
P: +49228.1814949
F: +49228.18194004

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