Since 2021, our Group strategy has been determined by our vision of becoming the Leading Digital Telco by 2030. Because few if any industries face change on the same scale as the telecommunications industry. Digitalization is the central catalyst for the key trends in this regard, from increasing volumes of data traffic and the attendant demand for high-performing networks, to highly individualized and context-sensitive digital products and services with immediate availability through self-service and cloud-based as-a-service models. We are seeing companies from other industries pushing onto the market with lean, software-defined production models. Providers such as Google, Microsoft, and Amazon Web Services are expanding into the global connectivity field and increasingly providing network functions in their cloud environments. CPaaS (communications platform as a service) companies offer user-friendly communications services on their own communications platforms – without having their own networks. They provide developers and business customers with standard telecommunications services (calls, text messages) and new network functions through standardized application programming interfaces (APIs). This shifts access to end customers in the B2B segment from telecommunications providers to the CPaaS companies.
We at Deutsche Telekom take up digitalization as the primary driver of significant changes in our ecosystem and correspondingly also in our strategic alignment. For us, this means continuing to invest non-stop in our networks and making digital participation possible for all. Because building and operating convergent networks, in which fixed-network and mobile services interact perfectly, remains the core of our strategy. But it also means continuing to digitalize. Whether it involves our products and services, market approach, production, or processes, we ourselves must also become more digital. Accordingly, we want to evolve from a traditional telecommunications provider into a software company that sells telecommunications services. Only if we are digitalized in all areas, can the success of the last few years continue. The result will be a Deutsche Telekom that can adapt faster and more flexibly to changing market conditions.
In the Western tech-sphere, we are already well positioned to reach our goals on our journey to realizing our Leading Digital Telco vision: our key performance indicators at the end of the 2023 financial year confirm that Deutsche Telekom remains Europe’s leading telecommunications company. No other telecommunications company has a comparable footprint with its own networks in Europe and the United States. We see ourselves as a global enterprise with a considerable presence in Europe, European roots and values, and an extremely strong business in the United States. However, our Group strategy does not aim to micromanage all local units, but to provide a strategic framework and to utilize local strengths such as networks and competitive standing. Our T‑Mobile US business in the United States in particular has operated under this decentralized approach for many years enjoying considerable success with its Un-carrier initiatives. Because our Group-wide strategic goals are clear: we want to align ourselves long-term with the needs of our customers and transform ourselves into a digital company, harnessing the synergies within our Group, to hold our own against new competitors and continue our growth course.
Our growth ambitions and success metrics measured using key performance indicators remain unchanged. The success of our strategy can be seen in our long-term competitiveness and as such is reflected in the established key financial figures: at our last 2021 Capital Markets Day, we set an annual growth target (Group CAGR) of 1 to 2 % for revenue and 3 to 5 % for adjusted EBITDA AL until 2024. Our next Capital Markets Day is scheduled for 2024.
For further information on our financial ambition levels through 2024, please refer to the section “Finance strategy.”
Our ambition to grow continuously is based on three strategic areas of operation, each with its own action plan: “Lead in digital life & work,” “Lead in business productivity,” and “Magenta Advantage.” Building and operating the best convergent networks – “Build & scale Telco as a platform” – remains the core of our strategy and is an important driver for our growth course. The two supporting areas of operation, “Save for growth investments” and “Simplify, digitalize, accelerate & act responsibly,” provide the guidelines for our actions and activities.
Click on the graphic to enlarge it
Group strategy: Leading Digital Telco vision
Grow
Lead in digital life and work
Lead in business productivity
Magenta Advantage
The best connectivity experience: we offer our customers the best network, anytime, anyplace – whether at home, on the go, or at work, it is to work seamlessly and across all technologies. That’s why we market fixed-line and mobile connectivity as one in our convergent products (FMC).
We want to reach
~10 million
FMC households in Germany and Europe by 2024.
Being there for our customers with the best networks and perfect service. With the “+,” our network is becoming more tangible, for example, with MagentaTV, smart home, and our own operating system HomeOS as a “linking element” for the digital household.
The best
network+
for our customers
Perfect customer service supported by digitalization: we are investing in the further development of our service tools and place great importance on finding a quick solution to our customers’ issues.
Turn customers into fans
With our infrastructure and worldwide partnerships in mobile communications and fixed network, we make sure our network is available worldwide, providing our business customers with all kinds of connectivity and collaboration services – reliable and secure.
Software-defined, secure,
global networks
based on our own and third-party infrastructure
First-choice partner for our business customers’ digital transformation: we focus on offering integrated services (combining fixed, mobile, and IT), further strengthening our portfolio in the IT field, and supporting our business customers in digitalizing their companies.
Our partners’
1st choice
for digitalization
“All from a single source” also applies to our B2B portfolio: we offer our business customers all of the telecommunications, collaboration and digitalization services they need.
CAGR in B2B revenue
+2%
in Germany and Europe
New digital business models in addition to a strong core business: We have an enormous reach. Using this reach, we do not only want to market our own offerings, but our partners’ too – thus creating new business models alongside our core business.
More than
252 million
mobile customers, > 8.6 million TV customers, > 8,000 shops
Our customers are given access to exclusive offers via our channels (e.g., OneApp). Our partners can bring their new services to a wider audience more quickly too. This means we continue improving loyalty among our customers while getting a cut of our partners’ revenue.
When all three of these come together...
...everyone is happy.
Build & scale Telco as a platform
Cloud-based customer and network-service platforms
We are adjusting our production platform to suit the customer needs of the future: To this end, we are building cloud-based, scalable, modular platforms to enable shorter development times, increasingly automated and cost-effective production, and an improved customer experience.
Modular and scalable services...
...with access via open interfaces
Connectivity, services, and data (e.g., location data, connection conditions, and user behavior) can also be accessed by third parties (e.g., service providers and app developers) via APIs and can thus be integrated into new applications – similar to the app store principle.
Open interfaces
for selected network functions
With 5G, we have created the best Deutsche Telekom mobile network of all time. With even greater performance and speed, it offers entirely new opportunities since the high bandwidths guarantee more stability and capacity. This allows our customers to enjoy video chats, streaming, and online shopping without any jerkiness or buffering.
By the end of 2025
5G
is to cover 99 % of people in Germany.
By 2024, we want to step up our build-out activities even further and from then on connect over 2.5 million households per year with optical fiber in Germany as well as more than 1 million households per year in Europe.
By 2024, we will be ramping up the fiber-optic build-out to
> 2.5 million
households per year in Germany.
Customers should be able to use their services whenever, wherever – regardless of the underlying transmission technology. Since there are more and more alternative infrastructure providers around, we are combining their infrastructure (e.g., satellite) with ours to create an overarching “network of networks” which we will manage and ensure secure data transmission across networks.
We’re building and orchestrating the
NETWORK of NETWORKS
and complementing our infrastructure with that of selected partners.
Save for growth investments
Future growth requires sufficient investment: we are continuing to invest in our networks and our own capacity to innovate, while also successfully integrating innovations from outside. We are enhancing our efficiency by increasingly using scalable platforms and services.
In 2023 we are investing
first and foremost into building and operating networks.
Digitalize, digitalize, digitalize: customer interfaces, networks, IT, and processes – we are digitalizing everything, end to end. The digitalization of our core business is helping us to improve customer experience and enhance our efficiency.
By 2024 we want our
of our customers in Europe.
We are systematically expanding our expertise in innovative technologies like artificial intelligence for the sake of our digital transformation. Data-based analyses are already helping us to maintain our hardware more proactively, understand customer needs better, and manage our networks more efficiently.
We are investing in
and automation to improve customer experience and enhance efficiency.
Our societal responsibility forms the basis for our corporate actions. We want to achieve net zero in our direct operations by 2025 and along our entire value chain by 2040. We are committed to digital participation, privacy, and security as well as respectful behavior online based on democratic rules.
The volume of emissions we intend to be responsible for is:
ZERO
None at all! No small print. And we want to achieve this target by 2040.
Group strategy: Leading Digital Telco vision
Click on the graphic to explore
Grow
Lead in digital life and work
The best connectivity experience: we offer our customers the best network, anytime, anyplace – whether at home, on the go, or at work, it is to work seamlessly and across all technologies. That’s why we market fixed-line and mobile connectivity as one in our convergent products (FMC).
We want to reach
~10 million
FMC households in Germany and Europe by 2024.
Grow
Lead in digital life and work
Being there for our customers with the best networks and perfect service. With the “+,” our network is becoming more tangible, for example, with MagentaTV, smart home, and our own operating system HomeOS as a “linking element” for the digital household.
The best
network+
for our customers
Grow
Lead in digital life and work
Perfect customer service supported by digitalization: we are investing in the further development of our service tools and place great importance on finding a quick solution to our customers’ issues.
Turn customers into fans
Grow
Lead in business productivity
With our infrastructure and worldwide partnerships in mobile communications and fixed network, we make sure our network is available worldwide, providing our business customers with all kinds of connectivity and collaboration services – reliable and secure.
Software-defined, secure,
global networks
based on our own and third-party infrastructure
Grow
Lead in business productivity
First-choice partner for our business customers’ digital transformation: we focus on offering integrated services (combining fixed, mobile, and IT), further strengthening our portfolio in the IT field, and supporting our business customers in digitalizing their companies.
Our partners’
1st choice
for digitalization
Grow
Lead in business productivity
“All from a single source” also applies to our B2B portfolio: we offer our business customers all of the telecommunications, collaboration and digitalization services they need.
CAGR in B2B revenue
+2%
in Germany and Europe
Grow
Magenta Advantage
New digital business models in addition to a strong core business: We have an enormous reach. Using this reach, we do not only want to market our own offerings, but our partners’ too – thus creating new business models alongside our core business.
More than
252 million
mobile customers, > 8.6 million TV customers, > 8,000 shops
Grow
Magenta Advantage
Our customers are given access to exclusive offers via our channels (e.g., OneApp). Our partners can bring their new services to a wider audience more quickly too. This means we continue improving loyalty among our customers while getting a cut of our partners’ revenue.
When all three of these come together...
...everyone is happy.
Build & scale Telco as a platform
Cloud-based customer and network-service platforms
We are adjusting our production platform to suit the customer needs of the future: To this end, we are building cloud-based, scalable, modular platforms to enable shorter development times, increasingly automated and cost-effective production, and an improved customer experience.
Modular and scalable services...
...with access via open interfaces
Build & scale Telco as a platform
Cloud-based customer and network-service platforms
Connectivity, services, and data (e.g., location data, connection conditions, and user behavior) can also be accessed by third parties (e.g., service providers and app developers) via APIs and can thus be integrated into new applications – similar to the app store principle.
With 5G, we have created the best Deutsche Telekom mobile network of all time. With even greater performance and speed, it offers entirely new opportunities since the high bandwidths guarantee more stability and capacity. This allows our customers to enjoy video chats, streaming, and online shopping without any jerkiness or buffering.
By 2024, we want to step up our build-out activities even further and from then on connect over 2.5 million households per year with optical fiber in Germany as well as more than 1 million households per year in Europe.
By 2024, we will be ramping up the fiber-optic build-out to
Customers should be able to use their services whenever, wherever – regardless of the underlying transmission technology. Since there are more and more alternative infrastructure providers around, we are combining their infrastructure (e.g., satellite) with ours to create an overarching “network of networks” which we will manage and ensure secure data transmission across networks.
We’re building and orchestrating the
NETWORK of NETWORKS
and complementing our infrastructure with that of selected partners.
Save for growth investments
Future growth requires sufficient investment: we are continuing to invest in our networks and our own capacity to innovate, while also successfully integrating innovations from outside. We are enhancing our efficiency by increasingly using scalable platforms and services.
In 2023 we are investing
first and foremost into building and operating networks.
Digitalize, digitalize, digitalize: customer interfaces, networks, IT, and processes – we are digitalizing everything, end to end. The digitalization of our core business is helping us to improve customer experience and enhance our efficiency.
We are systematically expanding our expertise in innovative technologies like artificial intelligence for the sake of our digital transformation. Data-based analyses are already helping us to maintain our hardware more proactively, understand customer needs better, and manage our networks more efficiently.
We are investing in
and automation to improve customer experience and enhance efficiency.
Our societal responsibility forms the basis for our corporate actions. We want to achieve net zero in our direct operations by 2025 and along our entire value chain by 2040. We are committed to digital participation, privacy, and security as well as respectful behavior online based on democratic rules.
The volume of emissions we intend to be responsible for is:
ZERO
None at all! No small print. And we want to achieve this target by 2040.
Group strategy: Leading Digital Telco vision
In the following, we describe the areas of operation of our strategy that continue to apply, and the results achieved in the 2023 financial year.
AL – After Leases
Since the start of the 2019 financial year, we have taken the effects of the first-time application of IFRS 16 “Leases” into account when determining our financial performance indicators. “EBITDA after leases” (EBITDA AL) is calculated by adjusting EBITDA for depreciation of the right-of-use assets and for interest expenses on recognized lease liabilities. When determining “free cash flow after leases” (free cash flow AL), free cash flow is adjusted for the repayment of lease liabilities.
