Supporting areas of operation

Save for growth investments

Future growth requires adequate investment. To this end, we are investing in our own innovativeness as well as integrating successful new developments from outside our Company. Thanks to our cost discipline, we generate the funds we need to finance this investment and safeguard our competitiveness. For us, the goal of becoming Leading Digital Telco also means being the leading telecommunications provider in terms of efficiency. At Group Headquarters & Group Services, for instance, we have raised our efficiency ambitions and introduced further steps to reduce costs in the coming years. But above all it is digitalization that is key to further enhancing cost efficiency throughout our entire value chain: from the customer interface, to our production processes, through to the management of our own infrastructure and supply chains. We will therefore systematically continue on this path of cost transformation.

We manage our investment portfolio with the aim of enhancing value. We believe that this means realizing value when the conditions are attractive. We completed the sale of GD Towers on February 1, 2023 and used the funds from the sale as planned to increase our stake in T‑Mobile US, as well as for other measures. On April 5, 2023, in the course of the 2022 share buy-back program, our ownership stake in T‑Mobile US reached 50.2 %, thus passing the threshold for a majority stake. Taking the treasury shares held by T‑Mobile US into account, our ownership stake in T‑Mobile US was 50.6 % as of December 31, 2023. In early 2024, Deutsche Telekom began selling a portion of its T‑Mobile US share portfolio on the market, without jeopardizing its own majority ownership position in T‑Mobile US.

Simplify, digitalize, accelerate & act responsibly

Simplicity in our offers and in our organization makes the digital transformation of our core business easier. In this way, we increase our implementation speed – both in the interaction with customers and in the implementation of new, strategic initiatives. This is why we want to become simpler, more digital, and ultimately more agile.

There are two main thrusts to our pursuit of simplicity. First, we want to offer our customers simple rate plans, like MagentaTV MegaStream, and intuitive products. To this end, we continually work to make improvements, such as to our TV voice control, which we are set to roll out to further markets outside of Germany. Going forward, we want to significantly further reduce product complexity. Our ambition is for our services to be available around the clock via a single click. Thanks to an IP migration which has been successfully concluded, we can now remotely perform setup and maintenance work to the line in increasingly more households – depending on the router. The technical provisioning of 95 out of 100 broadband lines is already successful on the first attempt. Second, we want our internal operation to be as efficient as possible, i.e., in terms of time and costs. We are making promising progress with the introduction of greater agility into our IT activities. For example, since 2020 we have increased the development speed for new software or software-driven products in Germany and Europe by around 40 %. Today, our average time to release for purely software-based adaptations is around 2.0 months in Germany (e.g., personal customer dialog for consumers, digital order management for business customers) and around 1.0 months in Europe. At the 2021 Capital Markets Day, we set ourselves the goal of reducing time to release to 1 month in Europe and 2 months in Germany by 2024. We had almost achieved this goal by the end of 2023. Above and beyond this, we will continue to scrutinize our organization, processes, and decision-making procedures and further optimize them in future, wherever possible.

The digitalization of our core business is helping us to improve customer experience and increase our efficiency. Our sales and service apps are now firmly established in Germany and Europe as key digital customer interfaces. They help us monetize our product portfolio through up- and cross-selling, and bring down costs by reducing service cases through self-service and preventive maintenance. In our European national companies, around 71 % of customers use our service app. In Germany, the figure stands at 52 % following migration to the OneApp platform (2022: 42 %). In connection with the migration, the collection of app-specific metrics (e.g., app penetration) was harmonized in Germany to ensure Europe-wide comparability within the Group. Beyond this, we encourage the use of our digital assistant, which is integrated into our OneApp, for advice and measure the number of interactions. Our German digital assistant is called Frag Magenta (ask magenta). Artificial intelligence (AI) enables it to learn automatically and improve its competence at responding to customer inquiries. Our customers in Germany can now express requests using natural language, i.e., their own words, to communicate with the Frag Magenta chatbot. Since early December 2023, customers can also chat with our video avatar, Max, to find the answers they need. This innovative step puts us at the forefront in terms of customer service in Europe. Another factor that plays into an outstanding and, above all, personalized experience is a 360° view of our customers across all channels, both online and offline. Magenta View is our front-end platform for all employees with direct customer contact, delivering all necessary customer data from a single source. At the end of the reporting year, around 50,000 employees in Germany were benefiting from Magenta View. Long term, our plan is to digitalize virtually all value creation stages in their entirety. To this end, we are systematically expanding our expertise in innovative technologies like AI. Data-based analyses are already helping us to maintain our hardware more proactively, understand customer needs better, and manage our networks more efficiently.

However, simplicity and digitalization also call for new skills and a cultural change. In 2023, we focused our learning offerings, the Explorer Journeys, specifically to future issues. With these programs, we want to prepare as many employees as possible for the skills that will be required in the future. A key focus in this regard was on teaching people more about AI. We also continued to offer Journeys on software development, data analytics, digital marketing, user experience, and other topics. Since introducing the Explorer Journeys globally in 2021, around 21,000 employees have taken part in the range of courses. With a digital learning rate of around 73 % (share of learning hours over digital media), digital learning is firmly established as a learning tool at Deutsche Telekom. Over 164,000 employees can take advantage of a whole range of digital and state-of-the-art learning offerings provided on the intelligent learning platform Percipio, dubbed the “Netflix of learning,” and through the integration of education platforms such as Coursera, a provider of digital further-training courses offered by top-ranking universities. Since 2021, we have also been enabling our employees to increase their participation in the Company’s success through the share program Shares2You. In the reporting year, 38,637 employees took advantage of the program. That our efforts are paying off is validated by our employee satisfaction levels: the question on Mood/Satisfaction remains at a very high level of 78 % (2022: 81 %).

For further information about our People Strategy, please refer to the section “Employees.”

In parallel, we fulfill our responsibility to society by systematically aligning our core business processes with the principle of sustainability. We revised and further refined our sustainability strategy in 2022: climate protection, circular economy, diversity and team performance, as well as digital responsibility and participation are our four key action areas. In addition to our goal of climate neutrality along our entire value chain at the latest by 2040, we added another interim goal and ambition level in 2023: we want to cut emissions along our value chain by 55 % by 2030, and by as much as 90 % by 2040. Our climate goal complies with SBTi requirements. In addition, we want to be 100 % circular by 2030 in terms of terminal equipment and network technology. We have taken back over 4.9 million devices in Germany and Europe either to refurbish or to send them directly for recycling, so that we and our customers actively help conserve resources and protect the climate. We are also tackling the issues of climate protection and circular economy with our suppliers, e.g., in tender conditions. In 2023, we pressed ahead with the implementation of the Act on Corporate Due Diligence in Supply Chains (Lieferkettensorgfaltspflichtengesetz – LkSG). We introduced a sustainability standard for our packaging back in 2020, removing single-use plastics in favor of recyclable materials and environmentally friendly colorings. All new Telekom-branded (or T-branded) devices and more than two thirds of the new packaging for smartphones that we source from our suppliers meet these criteria. Since 2021, 100 % of our electricity requirements for all Group units have been met from renewable sources. We plan to become twice as energy efficient by 2024, based on the data volume in the network in relation to the power consumed in this context. To help us achieve this goal, we are decommissioning legacy platforms – including PSTN, migrating to more efficient technology – such as the switch from 3G to 5G, using highly efficient data centers, and deploying AI. From a long-term perspective, we will also achieve savings from the migration from copper to fiber-optic technology. These measures will enable us to maintain stable power consumption in Germany and Europe through 2024, despite rapidly rising data volumes, growing numbers of active network components, and the further densification of our networks. Above and beyond this, we are supporting a responsible approach to digitalization. Under the motto “No hate speech,” Deutsche Telekom is supporting, for example, projects for media literacy in society and against cyberbullying. We also take our social responsibility seriously when it comes to natural disasters, whether with free phone calls and data traffic after the earthquakes in Turkey, Syria, and Morocco, for example, or emergency aid after the forest fires and hurricanes in the United States.

For further information on our sustainability strategy, please refer to the section “Combined non-financial statement.”

Our strategy is summarized in the following ambitions:

• We want to be a leader in terms of digital living and working, and in the implementation of advances in productivity for our business customers. Because only when we lead can we grow and meet the demands of our investors in the long term.
• We want to better utilize our existing assets and skills not only in our core business, but also to develop new, digital business models (Magenta Advantage).
• The key technical driver for our growth areas is telco as a platform: the best integrated network infrastructure – provided by us and by partners – as well as cloud-based customer and network-service platforms. The basis for this is and remains our ongoing commitment to building out the fiber-optic and 5G networks.
• We promote continued growth by carefully managing our financial resources and systematically transforming the Company to be simple, digital, and agile in every sense.
• We play a responsible and active role in society. We are a partner, not just at a societal level, but also at a political one, and we work in the interests of ensuring the open, forward-looking development of all countries in which we are active.