Three-pronged innovation strategy

To tap into even greater innovation capacity, we not only rely on our own developments but also successfully integrate new ideas from outside Deutsche Telekom. We take a three-pronged approach to innovation to set ourselves apart from the competition and generate growth:

  • In-house developments
  • Partnerships, and
  • Start-up funding.

Feel the future – our product and service innovations

Below are a few examples of developments in the reporting year:

  • We enabled the feature voice redundancy for hybrid lines (hybrid voice redundancy) for our consumers in Germany. This will allow them to still set up a VoIP connection over the network should the DSL connection fail.
  • We rolled out supervectoring in Germany. This technology supports transmission speeds of up to 250 Mbit/s (downstream) and 40 Mbit/s (upstream), providing bandwidths required for services such as Ultra HD. Supervectoring prepares our customers for future applications, such as virtual reality or higher-contrast video formats.
  • In November 2018, we added content from another 18 partners to our streaming service StreamOn. StreamOn Gaming is a new addition to our already successful music and video streaming service. As young customers in particular have a high affinity for mobile gaming, StreamOn Gaming is included in all Young rate plans.
  • At IFA 2018, we opened MagentaTV up to new target audiences. The TV service can now also be subscribed to as an over-the-top (OTT) offering, independently of a Deutsche Telekom internet access line. The MagentaTV OTT offering can be used with apps for iOS and Android. The content available is identical with that offered by the familiar MagentaTV service. The exclusive MagentaTV series are also available.
  • We also extended the availability of the digital parking service Park and Joy. More than 30 cities altogether benefit from parking via a smartphone, which displays vacant parking spaces and navigates the driver directly to each space. SDG 13
  • For business customers, we presented TechBoost, a Deutsche Telekom start-up program that provides selected technology start-ups with EUR 100,000 of credit for the Open Telekom Cloud. These technology start-ups are thus supported with powerful technology and can reap the benefits of a partnership with Deutsche Telekom, which provides them with access to Germany’s business customers – and to sustainable success. SDG 8
  • We also presented Industrial Machine Monitoring for our business customers. With this service, businesses can automatically monitor their machinery and receive reliable status information in real time. This complete package provides small and mid-sized enterprises with a simple entry route to the .
  • The Open Telekom Cloud now offers greater convenience and functionality for our business customers. In March, we rolled out a new release for our Infrastructure-as-a-Service offering. Users benefit from two new functions in the area of platform services as well as numerous enhancements of existing features for greater ease of use and functionality.
  • We are making the Internet of Things available throughout Germany, Europe, and North America. The rollout of Narrowband IoT (NB-IoT) was pushed forward in ten countries, including countrywide in the Netherlands, Austria, the United States, and Slovakia. Alongside Vodafone, Deutsche Telekom is worldwide a leading provider of NB-, well ahead of all the other network operators.
  • The market launch of the new IoT wireless standard LTE-M was also prepared. To this end, we teamed up with our incubator hub:raum to launch a prototyping program in which 18 solution partners from 11 countries and 13 sectors were chosen from 150 applicants and qualified for further collaboration. The first LTE-M test networks went live in Austria, Germany, Poland, and the Netherlands in late 2018.
  • Deutsche Telekom and Inmarsat in cooperation with their technology partner Nokia reached a decisive stage in the development of the European Aviation Network (EAN). EAN is the world’s first network designed for European airspace and combines S-band satellite communication with an LTE-based terrestrial network. With around 300 base stations in all 28 European Union member states plus Switzerland and Norway, the supplementary ground component of the EAN is the first pan-European integrated network.

With our central research unit, Telekom Innovation Laboratories (T-Labs), we operate our own research and development facilities at locations in Berlin, Budapest, Vienna, and Beer Sheva in Israel. Based on strategic Group targets, over 300 international experts and scientists from disparate disciplines – with close ties to our Technology and Innovation Board department and our operating segments – develop minimum viable products for partners at Deutsche Telekom. At the interface between science and entrepreneurship, the T-Labs together with industrial partners, international universities, research institutions, and start-ups conduct research and development work to solve specific customer issues, to decisively strengthen the innovation capacity at Deutsche Telekom, and to tap into new future topics. Based in Berlin, T-Labs has been an affiliated institute (An-Institut) of Technische Universität Berlin since 2004 and forged close ties to the university. In the reporting year, T-Labs focused on the following topics:

  • Blockchain: In close collaboration with customers, technology partners, and other telecommunications providers, T-Labs is developing a new blockchain-based decentralized ecosystem in which various distributed ledger technologies are made available via an operating stack and technology-independent interfaces. Enterprises can themselves develop decentralized apps (dApps) with this solution without the need for any detailed knowledge of the underlying complex basic technologies. The core functionalities of this ecosystem include identity management, payment, storage, and smart contracts. An initial validation of the approach took place in hackathons in Munich, Berlin, Seattle, and Frankfurt, providing valuable input for further development along with initial positive market and user feedback.
  • Intelligence: We develop solutions which, with help from machine learning methods, facilitate and optimize Deutsche Telekom-specific use cases. These included in 2018 improvements in the areas of network planning/optimization ( traffic) for DT Technik, traffic management and parking space usage for the program within VTI and T-Systems (Park and Joy), as well as in the context of campus networks and intelligent industry robots navigating within these networks. The Intelligence team together with partner universities in Germany, Austria, Hungary, and Israel is making its own mark, contributing significantly to the research community in the area of artificially intelligent machines and data science.
  • Experiences: As part of the Group program Smart Cities/Internet of Things (IoT), the Smart City Lab is devising an urban platform based on open standards for smart, cross-segment data usage. The platform was showcased successfully at the Mobile World and Smart City World Congress. Based on the Cloud TV user interface technology (operator app) for smart TVs, two MVPs were implemented simultaneously on the roadmap of the national companies in Hungary, Slovakia, Macedonia, and Montenegro. For the Magenta VR portal, the VR/360-degree tile-based streaming technology was tested successfully in two live basketball broadcasts. This technology only transmits the currently visible image section from the 360-degree sphere, and effectively uses the bandwidth for transmission, thus achieving much more noticeable quality improvements in VR headsets. The Experience Group at T-Labs plans to intensify its research into AR/VR technologies and smart user interfaces.

Innovations from partnerships

We draw on the expertise and abilities of our partners in order to implement the digital transformation successfully. For example, we rely on the tremendous innovative energy coming out of Silicon Valley, Israel, Germany, and other innovation hotspots across the globe. Some examples of successful partnerships are described below:

  • Pan-European cooperation with PayPal: A Europe-wide partnership with Braintree (a PayPal service) allows our German and international subsidiaries to offer their customers the best customer experience in the digital payment process. The payment function constitutes a key component of the One app (a smartphone service app) launched throughout Europe, and was already rolled out in five countries in 2018. The partnership successfully helps achieve the Group goals of cost efficiency, digitalization, and best customer experience. PayPal’s top-class platform also supports seamless integration of future services in the areas of e-commerce and new payment methods such as Google Pay or Apple Pay.
  • At the start of 2018, Deutsche Telekom invested in Axonize, an Israeli start-up specializing in Microsoft Azure-based IoT services. This strategic investment is the result of a strict selection process and collaboration with units from across the Group, from Partnering through to Product and Platform Management in the IoT unit at T-Systems. Ultimately, it was the bundled features for service providers, including service orchestration and management across various applications, as well as the extremely short development time frames for new use cases, that were the catalyst for the investment decision and partnership. Deutsche Telekom uses the features provided by Axonize as a module for its own IoT platform, Connected Things Hub, which forms the basis for solutions such as Building Monitoring & Analytics/Smart Building. The Connected Things Hub is already a strong platform for a growing ecosystem of established sensor and solutions partners, as well as innovative start-ups.
  • With partners OpenAsApp, smapOne, and blue-zone, this year we laid the foundations for expanding Telekom Deutschland GmbH’s Mobile Solutions portfolio. These mobile-centric solutions help our business customers to digitalize their business processes. Many work steps can now be completed simply using a smartphone. This means the focus is on enterprises with field staff, i.e., sales/marketing or support employees. OpenAsApp allows, for instance, existing business data contained in an Excel file to be mobilized in a single app. These business apps can be created swiftly and then distributed without the need for any programming skills. SmapOne offers an innovative solution for simple, mobile data entry. Polumana, the solution from blue-zone AG, is an application for managing field staff, including access to corporate data in real time, and route planning.

Start-up funding SDG 9

As Deutsche Telekom’s leading start-up program, the tech incubator hub:raum brings together external start-ups with relevant business units in our Group to offer jointly innovative products to our consumers and business customers. To this end, hub:raum offers the start-ups seed financing from its own investment fund and targeted innovation programs aimed at Deutsche Telekom’s strategic growth areas and technologies.

Since founding hub:raum in 2012, we set up a strategic investment portfolio of over 25 companies and work together closely with around another 300 start-ups from Europe and Israel in areas such as the real-time gigabit society (e.g., 5G and edge cloud), smart data economy (e.g., AI and process automation), and the Internet of Things (e.g., NB-IoT and Industry 4.0).

The hub:raum Campus at the Berlin location was upgraded, among other things, with one of the first 5G networks in Europe and edge cloud infrastructure. Besides coworking office space and mentoring, start-ups now also have exclusive access to our Group’s networks, product platforms, and test data to help their business develop faster. Initial results include implementation of 30 projects on the new infrastructure in the hub:raum edge and prototyping programs in 2018, which will also be continued in 2019. As part of the IoT innovation programs, over 36 implementation projects with solutions for NB-IoT and LTE-M networks as well as our Group’s Industrial IoT portfolio also got off the ground. Some of these start-ups are described in more detail here:

  • Texel VR is one of the most recent investments made by hub:raum. The start-up with headquarters in Israel and the United States enables events such as sporting events and concerts to be experienced live via virtual reality – using a video and VR solution, viewers can watch events in real time together with friends. And all without having to leave your couch. Viewers in different locations can take part in an event together virtually – even though they may be on different networks – and share special moments with one another.
  • The NB-IoT innovation program produced the product partnership with BS2 Sicherheitssysteme. The company has developed a digital early warning system for bridges, tunnels, buildings, and other infrastructure objects on the basis of Deutsche Telekom’s machine network (NB-IoT). Various sensors detect warning signals in objects long before any problems become visible, by monitoring critical factors such as temperature, air humidity, and corrosion. This IoT solution makes structures smarter, safer, and more sustainable. Damage can also be reduced and repair work and costs minimized. SDG 11
  • At present, RPA (Robotic Process Automation) software like that from CloudStorm underpins any kind of corporate automation strategy. It delivers efficiency and allows humans and machines to work alongside and with each other so that each can focus on what they do best. As such, the software helps make businesses more profitable. This innovative approach was decisive in hub:raum’s decision to add CloudStorm as another investment to its portfolio.

Deutsche Telekom capital partners

Our investment management group, Deutsche Telekom Capital Partners (DTCP), set up in early 2015, continues to do well. DTCP manages around USD 1.6 billion and advises over 60 portfolio companies on behalf of Deutsche Telekom and other institutional investors. DTCP invests in venture, growth equity, and special situations in the United States, Europe, and Israel, and provides consultancy services in the technology, media, and telecommunications industries. DTCP’s investments have a strong financial motivation. The group aims to acquire shares in companies, to see them grow, and to sell the shareholdings again at a profit. By focusing on financial return, DTCP can also invest in very successful companies which help the Group progress strategically.

In 2018, DTCP already opened its second venture and growth equity fund and secured, alongside Deutsche Telekom, international financial investors. The incorporation of external capital constitutes an important step in DTCP’s further development – the fund’s investments made in 2018 in Fastly, Dynamic Signal, and Pipedrive are just a few examples of the quality of the transactions made.

The strategic investment fund Telekom Innovation Pool (TIP) was further developed for investments that are primarily strategically motivated. Advised by DTCP, Deutsche Telekom makes investments here and promotes business start-ups that have a strategic focus and clearly collaborate with the Group’s business managers. Particularly in the fields of blockchain and artificial intelligence, long-term innovations for the Deutsche Telekom Group are actively pursued here. From the Deutsche Telekom Venture Funds (DTVF) portfolio, which DTCP also manages, the bulk of the active (non-strategic) equity investments were sold to generate liquidity for the Group.

Patent portfolio

Patents are gaining more and more significance in the telecommunications industry. Our patent strategy has to keep pace with the constant evolution of market players and fields of activity. On the one hand, our Group’s scope for action must be maintained. On the other hand and alongside our own research and development activities, we want to pave the way to open innovation through collaboration projects and partnerships. SDG 9 National and international patent rights are vital for these types of activity. We are strongly dedicated to generating and maintaining our own patents. In the reporting year, Deutsche Telekom held around 7,800 patent rights in total. We continue our intense efforts to develop and streamline our patent portfolio. This secures the value of the rights we hold and ensures they are in line with our Group’s strategic objectives. We have put in place a professional patent law management process to keep our IPR assets safe.

Expenditure and investment in research and development

Research and development (R&D) expenditure includes pre-production research and development, such as the search for alternative products, processes, systems, and services. By contrast, we do not class as research and development expenditure the costs of developing system and user software which is designed to improve productivity and make our business processes more effective. R&D expenditure in the Deutsche Telekom Group amounted to EUR 57.7 million in 2018. As the parent company, Deutsche Telekom AG bears part of the Group’s research and development expenditure, the amount in this case being EUR 33 million (2017: EUR 27 million). However, this figure cannot be viewed in isolation from our three-pronged innovation strategy comprising in-house developments, partnerships, and start-up funding.

Our Group’s investments in internally generated intangible assets to be capitalized were also up year-on-year at EUR 284.2 million compared with EUR 235.7 million for the previous year. These investments predominantly relate to internally developed software, mainly in our Group Headquarters & Group Services segment and our Systems Solutions operating segment. About 3,100 employees worked in the Group’s R&D units in 2018 (2017: approx. 3,000).

Expenditure and investment in research and development
millions of €







Research and development expenditure






Investments in internally generated intangible assets to be capitalized






LTE - Long Term Evolution
New generation of 4G mobile communications technology using, for example, wireless spectrum on the 800 MHz band freed up by the digitization of television. Powerful TV frequencies enable large areas to be covered with far fewer radio masts. LTE supports speeds of over 100 Mbit/s downstream and 50 Mbit/s upstream, and facilitates new services for cell phones, smartphones, and tablets.
IOT - Internet of Things
The IoT enables the intelligent networking of things like sensors, devices, machines, vehicles, etc., with the aim of automating applications and decision-making processes. Deutsche Telekom’s IoT portfolio ranges from SIM cards and flexible data rate plans to IoT platforms in the cloud and complete solutions from a single source.
IOT - Internet of Things
The IoT enables the intelligent networking of things like sensors, devices, machines, vehicles, etc., with the aim of automating applications and decision-making processes. Deutsche Telekom’s IoT portfolio ranges from SIM cards and flexible data rate plans to IoT platforms in the cloud and complete solutions from a single source.
LTE - Long Term Evolution
New generation of 4G mobile communications technology using, for example, wireless spectrum on the 800 MHz band freed up by the digitization of television. Powerful TV frequencies enable large areas to be covered with far fewer radio masts. LTE supports speeds of over 100 Mbit/s downstream and 50 Mbit/s upstream, and facilitates new services for cell phones, smartphones, and tablets.
IP - Internet Protocol
Non-proprietary transport protocol in Layer 3 of the OSI reference model for inter-network communications.
New communications standard, which offers data rates in the gigabit range, converges fixed-network and mobile communications, and supports the Internet of Things – rollout starting 2020.
New communications standard, which offers data rates in the gigabit range, converges fixed-network and mobile communications, and supports the Internet of Things – rollout starting 2020.