Deutsche Telekom AG · XETR:DTE
Deutsche Telekom — Investor Day (March 2006)
74 slides from Deutsche Telekom's investor day presentation, March 2006
Slide 1: Deutsche Telekom. CeBIT Investor Day 2006
Deutsche Telekom. CeBIT Investor Day 2006.
Slide 2: Disclaimer
Disclaimer. This presentation contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. They include statements as to market potential and the planned T-Online merger, and the “Outlook 2006” statements at the end of this presenta
Slide 3: Broadband/Fixed Network
CeBIT Investor Day 2006. Broadband/ Fixed Network. Broadband/Fixed Network Walter Raizner
Slide 4: Financial results 2005 – targets achieved
Broadband/Fixed Network. Financial results 2005 – targets achieved. BBFN Financial results 2005 Guidance from Q3/05 Achieved Status Revenue: € 26.0-26.3 bn € 26.0 bn 9 Adj. EBITDA € 9.9-10.1 bn € 9.9 bn 9 Adj. EBITDA margin (BBFN) improved from 37.6% in 2004 to 37.9% in 2005 Savings from revenue-r
Slide 5: More than 2.1 million net adds in Germany in 2005
Broadband/Fixed Network. More than 2.1 million net adds in Germany in 2005. Domestic DSL access lines (million) Development 15 Highly competitive T-Online DSL offer T-DSL 16 000 launch in May 2006 11.5 10 7.3 .1 +2 1.6 +1.8 5.8 5 4.0 0.2 Retail share 6.3 5.5 Domestic DSL retail share1 at YE 20
Slide 6: Update on Re-invent
Broadband/Fixed Network. Update on Re-invent. New products: Triple Play and T—One Roll out of high speed network started Rich content secured (e.g. Bundesliga) Further build out of verticals (e.g. Musicload and Gamesload) Innovation and Growth Launch of T-DSL 1000 via satellite Launch of
Slide 7: Update on Re-invent
Broadband/Fixed Network. Update on Re-invent. Optimizing end-to-end-process Separation of sales & care organization Customer Centricity Implementation of interactive voice response system Improved transparency of the invoice Product portfolio reduced by 40% Headcount reduction program on
Slide 8: Re-invent – successful launch of new voice tariff system
Broadband/Fixed Network. Re-invent – successful launch of new voice tariff system. Domestic voice market share1 Defend core business 0.8 p.p. 63.7% Consumer calling plans increased 63.5% by 14% to 13.8 million Î Penetration: 42%2 63.0% 62.9% Improved customer loyalty & churn prevention YE 04 New
Slide 9: Guidance re-confirmed
Broadband/Fixed Network. Guidance re-confirmed. Guidance re-confirmed1 Revenue and EBITDA turn-around expected by 2007 Challenges Timing merger Protect PSTN customer base Regulatory environment Negotiation with unions – timing Opportunities After completed merger: full marketing power
Slide 10: Mobile. simply closer.
CeBIT Investor Day 2006. Mobile. simply closer. René Obermann, CEO, T-Mobile International
Slide 11: T-Mobile continues to drive value growth
T-Mobile continues to drive value growth. Save for Growth works. 2005 a very successful year for T-Mobile: guidance exceeded Good margin despite strong customer growth More than 9 million new customers: +11% in total customers Revenue +11%, Adj. EBITDA +16%, Adj. EBITDA-margin + 1.5%p Firs
Slide 12: T-Mobile – our strategy
T-Mobile – our strategy. Thinking through the customer mind. TM US was ranked #1 wireless carrier in Most highly overall customer satisfaction regarded service company by J.D. Power TM D was again awarded “Best network in Germany” by Connect for the seventh time in a row Customer Centricity Supe
Slide 13: Integrated networks: Ubiquitous mobile broadband access
Integrated networks: Ubiquitous mobile broadband access. Always best connected: HSDPA, UMTS, EDGE, GPRS, WiFi. Ubiquitous mobile broadband access is what customers want – T-Mobile set up to deliver UMTS/HSDPA: True mobile broadband T-Mobile the first operator to launch HSDPA in Germany Launc
Slide 14: Mobile internet world
Mobile internet world. Internet, music, TV, games. Internet-based applications and services are THE key driver for mobile broadband: entertainment, information, transactions Mobile Music Successful partnership with Robbie Williams Increasing speeds. Increasing storage. Better devices Mobil
Slide 15: T-Mobile USA. Growth engine for T-Mobile and DT
T-Mobile USA. Growth engine for T-Mobile and DT. 2005: record customer growth with 4.4 mn net adds Strong brand: #2 in own/branded net adds; 96% brand awareness Customer growth: penetration headroom from YE05 71% to mid to high 80s. T-Mobile USA will capture 18% - 20% of market service reven
Slide 16: T-Mobile Germany. Stimulate usage
T-Mobile Germany. Stimulate usage. Huge voice potential: around 20% of all calls are originated from mobile. T-Mobile@home tariff successfully positioned 1.5 to 2.0 million T-Mobile@home customers by YE2007 Simplified and usage-stimulating tariffs: Relax, Relax XL and new international roaming
Slide 17: T-Mobile UK. Committed to gain market share
T-Mobile UK. Committed to gain market share. Strong performance in second half of 2005, convinced of organic growth potential Very strong management team in place Simplified and usage-stimulating tariffs: Flext, relaunch of Relax, U-Fix and Mates Rates Accelerated network roll out Push of
Slide 18: T-Mobile outlook. Our agenda for 2006
T-Mobile outlook. Our agenda for 2006. Confirmation of guidance for T-Mobile group results Known ARPU challenges in Europe, particularly in Germany, need to be addressed USA Continued growth Participation in AWS auction Europe Push mobile internet and fixed mobile substitution Defend
Slide 19: Backup. Mobile
Backup. Mobile.
Slide 20: Financial achievements 2005. Cash counts
Financial achievements 2005. Cash counts. +11% (+9.0 mn) customer growth, reaching 86.6 million +14% (+5.2 mn) contract customers, reaching 42.2 million +11% revenue growth, reaching 29.5 bn € +16% Adj. EBITDA growth, reaching 9.8 bn € +17% cash contribution growth, reaching 6.2 bn € Revenue
Slide 21: Adjusted EBITDA guidance
Adjusted EBITDA guidance. € 10.0 – 10.2 bn € 9.8 bn Decline of EBITDA from wholesale Decline of customer deal MTC Additional S4G growth California Germany market savings and invest Roaming 2005 2006 Page 21
Slide 22: Germany. Delivering cash
Germany. Delivering cash. Germany: Cash Contribution 14.4 bn € 3.1 bn € 3.1 bn € 3.1 bn € 2.7 bn € 2.0 bn € 0.4 bn € 2000 2001 2002 2003 2004 2005 Until 2002 application of German GAAP, from 2003 onwards IFRS.. Page 22
Slide 23: Proportion of mobile- and fixed-originated voice calls
Proportion of mobile- and fixed-originated voice calls. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Germany Sweden Netherlands Greece Italy Denmark UK Belgium Ireland Spain France Austria Finland Portugal Mobile Fixed Source: Analyses, Date as of Dec. 2004 Page 23
Slide 24: T-Mobile mission and strategy
T-Mobile mission and strategy. Most highly regarded service company Customer centricity Superior network experience Drive segment specific propositions Improve network performance/quality Improve segment specific customer case (call, surf and download) (based on value and needs) Optimize (di
Slide 25: Most highly regarded service company: What does it mean?
Most highly regarded “service” company: What does it mean? Segment specific propositions Network experience (incl. devices) Service Customer care Retail channels Page 25
Slide 26: T-Mobile firsts. Innovation leadership
T-Mobile firsts. Innovation leadership. First to launch HSDPA (D, March 2006) First to introduce flexible tariff in the UK – Flext – allowing to spend on whatever mix of minutes or texts (UK, January 2006) First to offer open Internet access on mobile devices – web’n’walk (June 2005) First f
Slide 27: T-Mobile milestones. Industry leadership
T-Mobile milestones. Industry leadership. 2004 Introduction of Relax tariffs 2005 Launch of web‘n‘walk 2006 T-Mobile@home Page 27
Slide 28: T-Mobile@home. Driving usage
T-Mobile@home. Driving usage. 5 € per month/4 ct per minute to T-Mobile and Fixed line Mobile Usage Double flatrate for additional 20 € offered: flatrate for (MoU/Month) calls from homezone to German fixed line and for all T-Mobile on net calls 223 178 Radius of 2 km: area of 12km2 (0.6 miles/
Slide 29: Germany: New Relax tariffs
Germany: New Relax tariffs. Simplicity and value. Included Minutes Relax Relax XL (all networks) Monthly Payment Monthly Payment Relax 50 50 19 € 24 €* Relax 100 100 28 € 39 € Relax 200 200 38 € 49 € Relax 400 400 63 € 74 € Relax 600 600 88 € 99 € Data 30 30MB 10 € Incl. Weekend option Weekend voice
Slide 30: UK: Flext. New standards of mobile value
UK: Flext. New Standards of mobile value. Monthly charge Equivalant value Pure Minutes Pure Texts recieved1 Flext 20 20 GBP 34 GBP 170 minutes 340 texts Flext 25 25 GBP 60 GBP 300 minutes 600 texts Flext 30 30 GBP 90 GBP 450 minutes 900 texts Flext 35 35 GBP 180 GBP 900 minutes 1,800 texts Flext 50
Slide 31: UK: New Relax tariffs
UK: New Relax tariffs. Important step to simplify tariff structure. Monthly charge Minutes Texts Relax 20 20 GBP 100 minutes 25 texts Relax 25 25 GBP 150 minutes 100 texts Relax 30 30 GBP 250 minutes Relax 35 35 GBP 500 minutes Relax 50 50 GBP 750 minutes 200 texts Relax 75 75 GBP 1,200 minutes Nu
Slide 32: Business Customers
Cebit Investor Day 2006. Business Customers. Lothar Pauly CEO, T-Systems
Slide 33: T-Systems 2005. We delivered what we said
T-Systems 2005. We delivered what we said ... T-Systems – Revenue (€ billion) T-Systems – adj. EBITDA (€ billion) 13.0 12.9 1.63 1.59 -0.9% -2.7% Margin 12.6% 12.3% Top 60+ customers1 – Revenue (€ billion) SE/ME/LE2 – Revenue (€ billion) 8.4 4.7 8.2 4.5 +1.5% -5.0% 1 Enterprise Services. 2 Business
Slide 34: T-Systems 2005. Executing on our strategy
T-Systems 2005. Executing on our strategy. Business Process Attack IT BPO Outsourcing (BPO) gedas – VW as new key customer. DaimlerChrysler – Infrastructure Application Industrialized Frame Contract extended through 2008. IT products Growth through IT revenue with LE/ME/SE customers big Outsou
Slide 35: T-Systems' growth strategy 2006 and beyond
T-Systems’ growth strategy 2006 and beyond. Growth to achieve our mission. Our Mission We want to be the most successful integrated solution provider leveraging our unique ICT experience. Our Growth Strategy with tough cost management Internationalization Innovations (organic/inorganic) (portfol
Slide 36: Agenda 2006. Attack IT & push Telco
Agenda 2006. Attack IT & push Telco. Attack IT Push Telco Leverage Focus on TC Gain big Win IT IP Expand Portfolio core deals in SE/ME/LE Revolution Mobile Innovations business Establish Demonstrate Win dedicated Utilize unique Push IP Optimize TC unique Sales outsourcing sales forces sales coverage
Slide 37: Enhance international footprint
Enhance international footprint. gedas- first step in strengthening our international profile. International growth ambitions Implications of gedas acquisition Global Focus Strategy: 73% of gedas revenues are international. Global Services for top 60 +customers. Global top 2 market position in
Slide 38: Agenda 2006. Focus on growth & efficiency
Agenda 2006. Focus on growth & efficiency. Growth Efficiency Win infrastructure deals in Western Reduce headcount. Europe Optimize infrastructure cost base: 3 Big ICT-Deals, each > 250 m €. - IT infrastructure. Leverage BPO capabilities Cost savings 2006: 155 m €. External revenues: > 280%
Slide 39: Financials 2006. Outlook
Financials 2006. Outlook. We reconfirm our guidance 2006 revenue between € 13.4 and 13.6 billion 2006 adj. EBITDA between € 1.5 and 1.6 billion Page 39
Slide 40: Backup. Business Customers
Backup. Business Customers.
Slide 41: Attack IT – win small, medium and large customers
Attack IT – win small, medium and large customers. Leveraging our unique market position. IT revenues (€ million) Profit from German Mid Market Potential Leveraging the Group’s IT expertise and scale effects ~ 1.000 Utilize unique sales organization and coverage across Germany ~ 700 Establis
Slide 42: CEBIT 2006. Broadband/Fixed Network
CEBIT 2006. Broadband/Fixed Network. Broadband/Fixed Network Walter Raizner
Slide 43: Broadband/Fixed Network applications
Broadband/Fixed Network. TV/ VoD Broad- “Conquer the Applications band Home” with “Fixed Internet Full Triple Play Mobile Conference” T-One “Fight back” Voice Fixed Nomadic Mobile Place of Use Clear execution plan Page 43
Slide 44: T-One (Dual Phone): Fixed-Mobile Convergence
BBFN Leverage Seamless Services: T-One (Dual Phone): Fixed-Mobile Convergence @ DT. GSM Benefit for the customers: One handset One address book One mailbox Search of the best network automatically Î Optimal price for the customer via W-LAN GSM/WLAN Always connected via fixed line number ph
Slide 45: Cornerstones of Triple Play
Broadband/Fixed Network. Cornerstones of Triple Play. Media Platform Bundles Content & Services Network/FTTC Page 45
Slide 46: Entertainment: most complex and innovative project
Broadband/Fixed Network. Entertainment: most complex and innovative project. € 3 bn capex in brand new high speed network Bandwidths of up to 50 Mbit/s Network 18,000 km of fiber optics expansion 17,000 cable distributors in 10 German cities until June 2006 74,000 cable distributors nation
Slide 47: Broadband/Fixed Network
CEBIT 2006. Broadband/Fixed Network. Broadband/Fixed Network Roland Kittel
Slide 48: Fiber highspeed network. A world-class new network
Fiber highspeed network. A world-class new network for Triple Play – start with 10 cities. Key figures and targets: Hamburg Investments of up to € 3 billion for network Berlin rollout Hanover Mid 06: 50 %1 in 10 cities (around 2.9 million households) Düsseldorf YE 06: 90 % 1 in 10 cities Leipz
Slide 49: Upgrade of the high-speed fiber-optic infrastructure
Broadband/Fixed Network. Upgrade of the high-speed fiber-optic infrastructure up to the cable distributor and the main distribution frame in Germany. Optical fiber network upgrade up to the cable Today: Optical fiber network upgrade up to the main distributor (CD)2 (“outdoor”) distribution frame (MD
Slide 50: FTTCab – Fiber to the Cabinet: Economic and forward-looking
Broadband/Fixed Network. FTTCab1 - Fiber to the Cabinet: Economic and forward-looking. Access-network architectures Alternative Infrastructures APL Cabinet SwC ADSL2/2+ (Fiber-to-the-Central Office) Access net. Max. reference bandw. Î Build out today (MBit/s) Branch cable Main cable FTTCab1 (Fib
Slide 51: Market leader for automated Cross-Connection Cabinets
Broadband/Fixed Network. Market leader for automated Cross-Connection Cabinets. 1 – Power supply 2 – Splitter 2 3 – DSLAM (Digital Subscriber Line 3 Access Multiplexer) 1 4 – Automated 5 distribution frame 4 5 – Termination Blocks (lines to customers; former Cross-Connection Cabinet) Improved qualit
Slide 52: Network infrastructure today and move to NGN
Network infrastructure today and move to NGN. World-class network in place. Facts & figures 1.5 million km of copper cable 206,000 km of fiber-optic cable Volume of voice traffic 424 billion minutes IP monthly transport volume 75,000 TBit/s Highest functionality and availability of product
Slide 53: T-Com strategy: One network for all applications
Broadband/Fixed Network. Today and move to NGN. T-Com strategy: One network for all applications. = Next Generation Network = IP-based network NGN = Universal platform for Fast Internet Triple Play Voice Video The new integrated “Next Generation Network” (NGN) will replace the separate communi
Slide 54: NGN strategy of Broadband/Fixed Network
NGN strategy of Broadband/Fixed Network. Growth through Triple Play, voice-data and fixed-mobile convergence. CaTV Individual TV Broadcast TV DVB-T/DVB-S/ADSL2+ Sat Triple Play (Hybrid) Terrestrial VDSL VDSL VDSL/ADSL Video on Demand (ADSL) High-Speed Double Play Data T-DSL VoIP Voice-Data Convergen
Slide 55: CEBIT 2006. Products & Services
CEBIT 2006. Broadband/Fixed Network Products & Services. Broadband/Fixed Network Walter Raizner
Slide 56: Triple Play. Product bundles: fulfillment of customer demand
Triple Play. Product bundles: fulfillment of customer demand. Components 1 Connection Up to 16 Mbit/s Up to 50 Mbit/s 2 Modem Terminals Set-top box 3 DSL flat rate with inclusive services Internet Fast Internet connection 4 Telephony Attractive flat rate 5 HDTV1 Enter- On Demand Collection
Slide 57: Triple Play. Attractive content partners under contract
Triple Play. Attractive Content partners under contract. All live games Multiple games view Bundesliga 1st and 2nd German soccer league (Bundesliga) On demand rights for all content TV channels For product launch full set of channels will be available MGM 20th Century Fox Video on Dema
Slide 58: Product presentation by Michael Ortlepp
Product presentation by Michael Ortlepp.
Slide 59: Triple Play. Personalized product bundles
Triple Play. Personalized product bundles – today, tomorrow and future. Connected Home Connected Home Home Security, - Automation Triple Play Entertainment T-Online Vision More Channels, Interactive TV Entertainment and Adv. Formats (Music, TV over DSL (Free/Pay TV) Games, Betting, Shopping) ... On-
Slide 60: Continued innovation in the tariff and product offering
Broadband/Fixed Network. Continued innovation in the tariff and product offering. Future Interactive TV 3D television eGovernment, eLearning, eHealth More to come Page 60
Slide 61: Mobile Broadband
CeBIT Investor Day 2006. Mobile Broadband. Hamid Akhavan, CTO, T-Mobile International
Slide 62: Mobile Broadband. Entering A New Phase
Mobile Broadband. Entering A New Phase. With mobile data services, approaching the performance of fixed line broadband, “Mobile Broadband” entered the scene … … while broadband penetration is generally still low. What are the critical success factors for “Mobile Broadband”? Page 62
Slide 63: Mobile Broadband. Critical Success Factors
Mobile Broadband. Critical Success Factors. Providing our customers with the internet experience, they know … the applications, they know Open Internet: web’n’walkTM Office / Email: Office in your Pocket TM at the performance, they are used to DSL-like speed: HSDPA Enhanced by mobility, at
Slide 64: Mobile Broadband. DSL-like Speed
Mobile Broadband. DSL-like Speed. DSL6000 Today’s DSL Speed LTE HSDPA >20Mbps 7.2Mbps ~ HSDPA DSL1000 3.6Mbps HSDPA 1.8Mbps UMTS 384kbps 2005 2006 2007 ~ Page 64
Slide 65: Improving Cost / Performance Ratio
Mobile Broadband. Improving Cost / Performance Ratio. Improvement of RAN production cost per bit by factor of 2 – 3 (through HSDPA 1800) Intelligent compression technologies further improving cost-per-bit ratio 6x Cost of RAN Production 5x 4x UMTS 384 3x ×2-3 2x HSDPA 1800 1x 200 400 600 800 100
Slide 66: Mobile Broadband. Increased Coverage
Mobile Broadband. Increased Coverage. 2006: biggest rollout program ever 8000+ sites in Western Europe Sophisticated data mining focuses coverage where our customers need it Continuous GSM modernization with proven positive business impact Targeting reduction T-Mobile WE Site Rollout 2000-
Slide 67: Mobile Broadband. Highest Network Quality
Mobile Broadband. Highest Network Quality. Highest quality ever in 2005 - bar raised higher for 2006. Our 3G service now has the same high quality as our 2.5G service. Rated as “Best Mobile Network” in Germany for the 7th year in a row. Best coverage in metropolitan areas in UK. Partner of
Slide 68: 3G Data Traffic Exceeding 2.5g
Mobile Broadband. 3G Data Traffic Exceeding 2.5g. Data Volume T-Mobile (Germany & Austria) 6000 5000 4000 GB 3000 2000 1000 3G 2.5G 0 Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez 2005 Page 68
Slide 69: web'n'walk – A Big Broadband That Fits Into Your Pocket
Mobile Broadband. web’n’walk™ - A Big Broadband That Fits Into Your Pocket. The open Internet, optimized for mobile devices Best adaptation to mobile device user interfaces (display, keyboards) Best adaptation to mobile network performance (acceleration) Data usage picking up Data usage 45
Slide 70: web'n'walk – Expanding The Device Range
Mobile Broadband. web’n’walk™ – Expanding The Device Range. Nokia T-Mobile 6630 N70 SDA II Sidekick II MDA Compact MDA Vario MDA Pro Nokia + Motorola Sony Ericsson HSDPA BenQ Siemens Samsung 6131 6233 6280 E61 RAZR V3 RAZR V3i K608i W810i EL71 EF81 EF91 Z560 Page 70
Slide 71: web'n'walk Usage
Mobile Broadband. web’n’walk™ Usage. Number of Sessions 2005 1.400.000 1.200.000 1.000.000 800.000 600.000 400.000 200.000 0 Jun Jul Aug Sep Okt Nov Dec Page 71
Slide 72: Mobile Broadband. Always Best Connected
Mobile Broadband. Always Best Connected. web’n’walk™ / OneNet – automatic selection of the best available bearer Multi-access, seamless mobility via GPRS, EDGE, UMTS and HSDPA T-Mobile HotSpots Private residential and corporate WLAN SIM authentication – no user input needed No application re-s
Slide 73: Office In Your Pocket
Mobile Broadband. Office In Your Pocket ™. Continuously growing push email user base Blackberry Solution & Webmail MDA Messaging Solution Expanding push email device range Blackberry 8700g MDA line (Pro, Vario II) Nokia E61, … Remote connectivity at up to 1.8 Mbps web’n’walk Card W
Slide 74: TV In Your Pocket
Mobile Broadband. TV In Your Pocket. Increasing portfolio of TV channels Five new channels Cooperation with MTV and Nickelodeon New Mobile TV Client (April ’06) Faster channel switching Electronic Program Guide World Cup 2006 on your T-Mobile 20 matches live and exclusive Additiona