Three-pronged innovation strategy

We set ourselves apart from the competition and generate growth in three ways:

1. In-house developments
2. Partnerships
3. Start-up funding

1. In-house developments

In 2020, we continued to pursue our current innovation topics and optimized our delivery process, developed new products, and simultaneously ramped up our transformation into a more agile company.

• Delivery innovation: Artificial intelligence drives internal digitalization, e.g., in campaign management or with the Magenta chatbot, which Computer Bild, a German computer magazine, named best chatbot by a German telco in its 24/2020 issue. Dynamic spectrum sharing helped us build on our leadership position. This new antenna technology enables the parallel use of LTE and 5G in the same frequency band.
• Experience innovation: In the consumer arena, we executed the commercial launch of the mini speaker and MagentaGaming. Industrial campus networks also reached the market.
• Capability innovation: In the wake of our transformation into an agile company, more than 70 % of our employees now work in an agile set-up, which is also having a positive impact on IT delivery. For example, around two-thirds of our IT deployments now take place outside of the traditional waterfall development model.

Thanks to our centralized research unit, Telekom Innovation Laboratories (T-Labs), we have access to our own R&D centers. At our T-Labs sites in Berlin, Be’er Sheva, Budapest, and Vienna, we collaborate with the world’s leading universities, research institutes, and other companies’ innovation centers. Together with these partners, T-Labs is conducting research & development at the interfaces between science and entrepreneurship, with a view to shaping the future in our current key areas: Blockchain, Intelligence, and Experience. The T-Labs teams are solving specific customer problems, enhancing Deutsche Telekom’s innovative strength, and tapping into the topics of the future for networks, computing, and processes.

• Blockchain has multiple thrusts: In the first, blockchain technologies are being assessed to see whether they can help make Deutsche Telekom’s internal processes more efficient and transparent. A specific example is wholesale roaming, where, in partnership with the GSM Association (GSMA) and other telecommunications companies, we have designed a solution for creating, signing, and billing contracts. The medium-term goal is to work together with the GSMA to create an industry standard to enable further use cases to be implemented using this solution. The second thrust focuses on using the blockchain as infrastructure. This could be crucial, for example, to development of the M2M economy, where producers and consumers connect in a decentralized manner and share trusted data. Another new topic of interest is the development of decentralized identity solutions that could allow people and even machines to autonomously store and manage their own identities. Above and beyond that, we are looking into new ways of participating in open-source projects.
• Intelligence relates to all aspects of teaching cognitive abilities to machines. The resulting artificial intelligence (AI) is defined as the imitation of human intelligence or intellectual processes by computer systems. Such processes include learning, drawing conclusions, and automatic correction. T-Labs’ main focus is on developing innovations that are thematically related to the requirements of a telecommunications provider and that help automate or optimize its infrastructure, processes, or products. AI research is currently focused on the following: communication networks (so as to optimize network planning for the rollout of new technologies such as fiber optic or 5G); cybersecurity AI (in order to protect Deutsche Telekom’s customers and its own infrastructure, and achieve fair, verifiable results using AI); and quantum AI (to enhance both the speed and quality of machine learning processes). In addition, we are launching sustainability AI – which uses AI-based optimizations to make more efficient use of valuable resources.
• Experience developed an infrastructure for smart city solutions that is based on micro-services. Developed using open standards, the infrastructure allowed for the integration into the existing OGC platform operated by the City of Hamburg. The platform enables citizens to access a variety of information about their city (free parking spaces, available charging stations for electric vehicles, etc.). The services developed reflect the quest to satisfy the future needs of society. The Experience team collaborates with scientists, businesses, and other partners to shape both the customer journey for every product and the value added by every service. Specific results include prototypes and tests to improve streaming quality, and to utilize XR technology for Deutsche Telekom’s business areas.

University Partnerships is being established in cooperation with a large number of Deutsche Telekom units to function as a Group-wide linchpin for innovation, further training, and HR marketing. Academia as a Service was launched by T-Labs as an active research network aimed at fostering global academic partnerships, e.g., by starting pilot projects or putting Academia partners into contact with Deutsche Telekom stakeholders. T-Labs’ active promotion of university partnership programs assists Deutsche Telekom’s HR department in recruiting talented new employees and helps strengthen the Company’s corporate brand.

2. Partnerships

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

• Deutsche Telekom concluded an agreement with SK Telecom to set up a joint venture for 5G technology. The joint venture will assist both companies in developing innovative 5G solutions. The focus is on solutions that ensure in-house 5G coverage, initially for the European market. In-house coverage, which is accomplished using 5G repeaters, is currently an untapped market niche, and the joint venture can play a pioneering role in this area. In the medium to long term, we are assessing options for partnerships in the fields of augmented reality (AR) and virtual reality (VR) services, mobile edge computing (MEC), and the app market.
• Deutsche Telekom joined the Open RAN Policy Coalition, building on its groundwork in this field: promoting and accelerating carrier-grade open-RAN solutions for an even better customer experience in our networks. As a trailblazer in this area, we founded the global #OpenRAN movement back in 2016. Its mission is to develop specifications to open up and cloudify the RAN, and to encourage a more lively and competitive environment for network equipment providers. Since then, Open RAN has gained considerable momentum. The technical standards and interfaces of the O-RAN Alliance are making the RAN open, smart, and fully interoperable.
• Together with U.S. navigation specialist Swift Navigation, Deutsche Telekom is launching a solution for reliable, high-precision geopositioning in the European market. Called Precise Positioning, the system is accurate to the centimeter and enables, for example, lane-accurate navigation for (semi-)autonomous vehicles. Conventional satellite navigations systems like GPS are accurate only to within three to five meters. Skylark™, Swift’s cloud solution, corrects this satellite data, allowing the location of autonomous vehicles and machines to be determined with greater accuracy. Via the mobile network, data flows continuously between the ground-based reference stations operated by Deutsche Telekom, the cloud solution from Swift, and the M2M SIM card in the vehicle, delivering precise correction data and enabling exact positioning in real time. Precise Positioning opens up new cross-industry mobility options and possibilities to develop autonomous applications that require exact, reliable positioning. The potential application areas include the automotive industry, logistics, drones, rail traffic, agriculture, the construction industry, and even consumer solutions. In the agricultural sector, for instance, with Precise Positioning self-driving machines can be deployed to sow crops, spread fertilizer, or plow fields with inch-perfect precision and thus save seeds, fertilizer, and energy.
• Deutsche Telekom is now working together with RemoteMyApp (RMA) as its partner for modern game streaming technology to serve the cloud gaming business area and bring its MagentaGaming service to the market. Under the partnership, the streaming solution is provided under a limited-time exclusivity arrangement in Deutsche Telekom’s footprint markets.
• Deutsche Telekom is also partnering up with Nreal, an incredibly innovative provider of mixed reality hardware and software with multiple accolades to its name including as a winner at the CES Innovation Awards. Under the partnership with Nreal, Deutsche Telekom has developed a variety of mixed reality solutions for gaming, entertainment, and productivity, which offer our customers the opportunity in our shops and at other locations to experience the huge potential of our 5G networks first hand.
• TM Forum is a leading global alliance of over 700 companies working together to standardize application integration for service providers from the information and telecommunications technology sectors. As a TM Forum member, Deutsche Telekom is a signatory to the Open API Manifesto and its contributions include working with co-members to further develop the standard for open APIs. Open APIs promote better interoperability with partners and help to standardize the integration points between software applications. This is an essential piece of the puzzle both in terms of establishing cross-industry component recycling and ensuring the integration capability of innovations.
• Deutsche Telekom joined the 1000+ Solutions Challenge Alliance of the Solar Impulse Foundation in order to identify and promote technologies to reduce carbon emissions in the ICT sector. We are working hand in hand with the Foundation to accelerate the rollout of sustainable and profitable solutions for the ICT industry. We will also make use of these solutions to help achieve our own climate targets.

3. Start-up funding

As Deutsche Telekom’s leading start-up program, the tech incubator hubraum puts external start-ups in touch with the relevant business units in our Group, so that together they can offer innovative products to consumers and business customers. To this end, hubraum provides the start-ups with seed financing from its own investment fund and targeted innovation programs geared to our strategic growth areas and technologies.

Since founding hubraum in 2012, we have set up a strategic investment portfolio of over 30 companies and worked together closely with around another 350 start-ups from Europe and Israel in areas such as the real-time gigabit society (e.g., 5G and edge cloud), the smart data economy (e.g., AI and process automation), and the Internet of Things (e.g., NB-IoT and Industry 4.0). With Europe’s first 5G networks and edge cloud infrastructure, the hubraum campus in Berlin offers start-ups not only co-working office space, but also exclusive access to our Group’s networks, product platforms, and test data to help them build up their businesses faster. Launched in 2019, the hubraum 5G prototyping initiative was continued in 2020 with more specific programs:

B2B – Campus Network Program. Under the Campus Network Program, five start-ups were chosen to develop future applications for 5G campus networks in collaboration with Deutsche Telekom. The applications are to be implemented, for instance, at the Aachen-based Center Connected Industry (CCI), of which Deutsche Telekom is a member.

B2C – Consumer Entertainment Program. Starting in July 2020, seven start-ups worked on projects as part of our 5G Consumer Entertainment Program, the results of which were presented in early October 2020. The goal was to develop concrete 5G applications. The following start-ups received investment funding from Deutsche Telekom:

• In mid-2020, hubraum and its partners Nreal, Qualcomm, and Unity jointly hosted a mixed reality innovation program for start-ups. Over 150 start-ups from across the globe applied to be included on the program, with 14 teams accepted as the 2020 cohort. The participating teams were each given a pair of Nreal Light mixed reality glasses and were able to begin refining their ideas at the end of the year. They have until the Demo Day in spring 2021 to finalize their projects.
• Australian start-up tagSpace is already collaborating with n-tv, a news channel. The company is testing how to integrate conventional news content and dedicated specials – e.g., on the fall of the Berlin Wall – into an augmented reality (AR) app.
• Together with Quake Capital, a U.S.-based investor specializing in seed funding for early-stage start-ups, and Mediengruppe RTL, in 2020 seven start-ups were selected to test and evolve their ideas in Deutsche Telekom’s live network as part of the 5G Consumer Entertainment innovation program. Their goal was to turn 5G into a first-hand experience for our customers. This three-month program was held around Deutsche Telekom’s Headquarters in Bonn, where the start-ups were given access to 5G infrastructure for testing purposes.
• You can use the Dance Fight app developed by Virtual Arts to put your dance moves to the test and compete live against other dancers. People across the globe follow these dance contests and can vote for their personal favorites. Dance Fight is already available in the Apple and Google app stores in the United States.
• MojiLaLa’s LeoAR app enables you to place 3D objects in the real world, letting virtual dinosaurs roam through Berlin, for example. Super RTL, a television channel, already uses this app, thus benefiting from the start-up program. German soccer team 1. FC Köln, too, is already testing integrating figures into one of the start-up’s AR apps.

Another innovation program focusing on extended reality was launched in 2020 and is set to continue in 2021.