Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Investor Day (March 2007)
104 slides from Deutsche Telekom's investor day presentation, Mar 1, 2007
Slide 1: FY 2006 Highlights
FY 2006. Highlights.
Slide 2: Disclaimer
Disclaimer. This presentation contains forward-looking s tatements that reflect the current views of Deuts che Telekom management with res pect to future events. They include s tatements as to market potential, the “Outlook 2007” s tatements as well as our dividend outlook. They are generally identi
Slide 3: 2006 Highlights. Free cash flow target exceeded
2006 Highlights. Free cash flow target exceeded. Revenue up 2.9% to €61.3 billion Adj. EBITDA at €19.4 billion Reported net income at €3.2 billion (adjusted at €3.9 billion) Free Cash Flow before spectrum capex at €5.7 billion 2006 dividend of €0.72 per share proposed 9.3 million mobile
Slide 4: FY 2006 Financials
FY 2006. Financials. Deutsche ee Telekom
Slide 5: Broadband/Fixed Network. Challenging domestic environment
Broadband/Fixed Network. Challenging domestic environment. Dom estic revenue (€ billion) International revenue (€ billion) 23.2 2.79 2.85 21.8 -6.1% +2.3% Dom estic adj. EBITDA (€ billion) International adj. EBITDA (€ billion) 8.9 7.9 0.9 0.8 -11.6% -7.1% 2005 2006 FY 2006 In vestor s Day In vestor
Slide 6: Broadband/Fixed Network – domestic. Revenue trends continue
Broadband/Fixed Network – domestic. Revenue trends continue. Revenues in €million 2006 2005 Delta Total 21,835 23,249 - 6.1% Network communications 11,240 12,349 - 9.0% thereof narrowband access 7,803 7,882 - 1.0% thereof calling revenues 3,424 4,465 - 23.3% Value added services 945 1,069 - 11.6% Te
Slide 7: Mobile. Strong international growth
Mobile. Strong international growth. Dom estic service revenues (€ billion) International service revenues (€ billion) 20.5 7.8 7.4 17.5 -4.2% +17.2% Dom estic adj. EBITDA (€ billion) International adj. EBITDA (€ billion) 3.5 3.2 6.7 6.3 -7.7% +6.3% 2005 2006 FY 2006 In vestor s Day In vestor Relati
Slide 8: T-Mobile Germany: revenue under pressure – margin holding up
T-Mobile. Germany: revenue under pressure – margin holding up. Service revenues (€ billion) Main drivers of service revenue decline: 7.8 Lower calling revenues due to 7.4 price cuts -4.2% Increased price competition in business customer segment Termination rate cuts in November Adj. EBITDA m
Slide 9: T-Mobile USA: Consistently strong metrics
T-Mobile. USA: Consistently strong metrics – solid contract growth. Service revenues (US$ billion) Total revenue (US$) growth +16.1% 14.1 11.8 Adj. EBITDA: $4.7 billion, up 15.6% +19.5% Contract ARPU: $56 (up from $55 in 2005) Non-voice ARPU: $6.50 in Q4, up 36% Contract net adds (thousands)
Slide 10: T-Mobile UK: Strong service revenue growth and margin recovery
T-Mobile. UK: Strong service revenue growth and margin recovery. Service revenues (€ billion) Total revenue growth +8.2% 4.0 Contract ARPU at €66 (from restated 3.5 +12.5% €65 in 2005) Adj. EBITDA in Q4: €316 million, up 3.6% yoy Adj. EBITDA margin 923k net adds – 79% contract 28.0% 26.9% 16
Slide 11: Business Customers. Strong international revenue growth
Business Customers. Strong international revenue growth. Dom estic revenue (€ billion) International revenue (€ billion) 11.0 2.1 10.5 1.8 -4.9% 18.2% Dom estic adj. EBITDA (€ billion) International adj. EBITDA (€million) 1.4 209 165 1.1 -22.7% -21.1% 2005 2006 FY 2006 In vestor s Day In vestor Rela
Slide 12: Capex, FCF, and net debt
Capex, FCF, and net debt. €5.7 billion free cash flow in 2006. Cash Capex (€ billion) Free cash flow adj. (€billion) Net debt (€ billion) 8.52 39.6 38.6 7.81 7.21 5.72 2005 2006 2005 2006 Dec-05 Dec-06 1 Before € 2.1 billi on for n etwork assets and li censes in the US. 2 Before € 3.3 billi on spect
Slide 13: 2006 – Free Cash Flow
2006 – Free Cash Flow. Free cash flow target exceeded. € billion 2006 2005 Cash Flow 16.0 19.8 Change in working capital and accruals 2.2 - 0.7 Taxes and dividends - 1.2 - 1.1 Cash generated from operations 17.0 17.9 Net interest payment - 2.8 - 2.9 Net cash provided by operating activities 14.2 15.
Slide 14: 2006 – Net income
2006 – Net income. Adjusted net income of € 3.9 billion in 2006. € billion 2006 2005 Adj. 2006 Adj. 2005 EBITDA 16.3 20.1 19.4 20.7 Depreciation and amortiz ation - 11.0 - 12.5 - 11.0 - 10.6 Net financial expense - 2.7 - 1.4 - 2.9 - 2.5 - of which net interest expense - 2.5 - 2.4 - 2.5 - 2.4 EBT 2.6
Slide 15: Efficiency. 32,000 job reduction program well on track
Efficiency. 32,000 job reduction program well on track. 12,200 employees have left the group as of year-end 2006 Of which 8,700 early and partial retirement and severance programs Of which 600 sale of Vivento business units Of which 2,900 turnover and regular retirement Total restructuring
Slide 16: Balance sheet
Balance sheet. Balance sheet continues to be in excellent shape. € billion 31.12.2006 31.12.2005 Balance sheet total 130.2 128.5 Shareholders‘ equity 49.7 48.6 Net debt 39.6 38.6 Net debt/adj. EBITDA 2.04x 1.86x Gearing 0.8x 0.8x Equity ratio 38.2% 37.8% FY 2006 In vestor s Day In vestor Relation s
Slide 17: Dividend. 2006 dividend of €0.72 per share proposed
Dividend. 2006 dividend of € 0.72 per share proposed. Am ount Payout (€ billion) ratio Dividend 3.1 Reported net income 3.2 99% Adjusted net income 3.9 81% FCF before spectrum capex 5.7 55% FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 17
Slide 18: Corporate Strategy. Focus, fix and grow
FY 2006. Corporate Strategy. “Focus, fix and grow”.
Slide 19: We mobilize personal and social networking
We mobilize personal and social networking. @home mobile @work FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 19
Slide 20: Global trends in Telecommunications
Global trends in Telecommunications. Personal communication in social networks complementary to traditional voice and messaging usage Mobilize Mobile internet as mega trend internet and Internet services incl. IPTV independent of access Web 2.0 trend (“multi-access”) Devices and user interfa
Slide 21: DT portfolio – Consumer
DT portfolio – Consumer. Total DT customer base > 100 million Fixed Mobile Improve DT market share1 percent competitive- 89 ~86 ness in Germany (and CEE) 45 37 35 34 24 15 12 123 161 205 274291 493 Germany CEE2 A4 PL GB5 NL US DT revenue share Market size1,3 ~54% Million customers 1M arket si ze an
Slide 22: DT portfolio – Consumer
DT portfolio – Consumer. Total DT customer base > 100 million Fixed Mobile DT market share1 percent 89 Grow abroad ~86 with mobile 45 37 35 34 24 15 12 123 161 205 274291 493 Germany CEE2 A4 PL GB5 NL US Market size1,3 Million customers 1M arket si ze an dmarket sh ares Q3 2006. Nu mber of fi xedlin
Slide 23: We mobilize personal and social networking
We mobilize personal and social networking. Improve com- Mobilize petitiveness Grow abroad Business internet and in Germany with mobile customers Web 2.0 trend (and CEE) T= Leading broadband provider through combination of efficient technologies FY 2006 In vestor s Day In vestor Relation s Mar ch 1,
Slide 24: We mobilize personal and social networking
We mobilize personal and social networking. Improve com- Mobilize petitiveness Grow abroad Business internet and in Germany with mobile customers Web 2.0 trend (and CEE) Market and customer situation Products and Innovation Sales, Service, and Marketing Brand architecture “Save for Service
Slide 25: Market situation in Germany
Market situation in Germany. Consumer retail 2006 CAGR 2010 market Germany EUR billions +1.0% 47.6 45.8 -1.7% Drive major innovation through IPTV VAS/IP services 6.7 11.1 and mobile internet Maximize value share in the core Mobile 21.2 business 21.8 Stabilize mobile share Fixed broadband 3.1 Pus
Slide 26: Different customers ...
Different customers ... Example: “IP generation” EUR 140 monthly ICT budget 66% 99% 39 years DSL users Mobile phone users Average age 4% 50% 66 years “Best agers” EUR 45 monthly ICT budget Example: “Conservative voice users” Note: Segm ent sh are“I P gen erati on”: 15%; “ Conservative voi ce users”:
Slide 27: ... require differentiated offers and innovations
... require differentiated offers and innovations. Standard Standard products ISP fees included in IPTV nationwide via offers with full options DSL access ADSL2+ (750 cities) suite (e.g., “Euro flat”, Hotspots included and VDSL (50 cities) “Mobile flat”) New pricing model Innovative Voic
Slide 28: IPTV end of 2006
IPTV end of 2006. 10 cities VDSL, end of 2006 FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 28
Slide 29: IPTV will be widely available
IPTV will be widely available. 750 cities ADSL2+ 2007 50 cities VDSL 2008 FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 29
Slide 30: ... also in mobile: innovative products and devices
... also in mobile: innovative products and devices. Devices Strategic Inner circle bonding – Strengthen category Compelling and direction leverage personal leadership in “real differentiated devices social networks time” internet with worry free pricing Product Community tariff Easy mobil
Slide 31: Develop sales further ...
Develop sales further ... Differentiation Substantial improvements Largest “branded” sales surface Immediate relief Shift sales to direct (e.g., expansion Integrated customer Integrated T-Punkte) perspective along all T-Retail-Partner points of contact Integrated channel program management
Slide 32: ... especially direct sales
... especially direct sales. !"§==Punkt= Target 2007/08 Substantial improvements North 96 786 T-Punkte +31 Approx. 1,000 T-Partner East e-Channel share >15%1 96 West +55 Approx. 1,500 new jobs 244 +66 South 150 +48 1 M obil e exam pl e, fi gure refers to gross add sh are “wei ße Karte”; Valu
Slide 33: Professional service
Professional service. Customer Differentiation satisfaction Substantial index1 improvements Differentiation with Bench- “services as 100 a product” mark Benchmark Immediate relief customer Customer segment- satisfaction specific service Task forces to address immi- Fix IT systems levels ne
Slide 34: Marketing: segment-specific bundles
Marketing: segment-specific bundles. EXAM PLES Customer segments Standard offers1 Community bundle Families IP Triple play bundle Targets 2007 Generation > 10 million MAX06 bundles Double play bundles > 1 million Young T-Vorteil Single play offers Best ager 1 Standard offers consi st of 1) Stand
Slide 35: Today's brand situation
Today’s brand situation. !"§==Com= " –Pay T-Mobile@home " -DSL !"§==Systems= !"§==Mobile= " -One Xtra Smart " -ISDN Xtra Friends !"§==Online=Business Xtra Classic !"§==Online= !"§==Punkt= Xtra FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 35
Slide 36: Future branding architecture – Consumer
Future branding architecture – Consumer. ===!"§ as institutional sender !"§==Mobile= !"§==Home= Differentiating offerings “on the move” and “at home”in integrated markets International consumer brand FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 36
Slide 37: Branding architecture: potential in young segment
Branding architecture: potential in young segment. Δ to fair market share, percent Segment Mobile2 DSL Price- -1.2 -0.53 Market share at risk due sensitive to “no-frills” offers in market Low brand differentiation Young1 -4.0 -9.0 Bad price perception Women -4.5 -1.9 Fair share Fair share Ø 37
Slide 38: Branding architecture: gain share in young/price sensitive segment
Branding architecture: gain share in the young/price sensitive segment. Second brand as a new category in the market Introduction: Positioning: Approach: Summer season Simple and value for money “Grass roots”marketing Fun Simple product Good value for Primarily online Trendy portfolio (mob
Slide 39: Save for Service
“Save for Service”. EXAM PLES Cost savings measures All-IP network Migration to IP factory by 2012 (“NGF”) Capex/opex reduction, savings reinvested for IP migration Targets Telekom- Separate technical, infra- EUR 2.0 billion savings in 2007 Service structure, technical service, EUR 4.2 – 4
Slide 40: Next Generation Factory
“Next Generation Factory”. From … … to Technology Circuit-switched IP-based Copper Optical1 Significant reduction of production costs High complexity – Reduced complexity - (EUR 1.2 bn. in 2010) diversity and few platforms technologies Architecture Vertical “silos” Horizontal “layers
Slide 41: Improve competitiveness in Germany
Improve com- Mobilize petitiveness Grow abroad Business internet and in Germany with mobile customers Web 2.0 trend (and CEE) FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 41
Slide 42: Core beliefs international growth
“Core beliefs” international growth. Devices and Growth infrastructure OECD and procurement International Non-OECD Roaming synergies scale effects Organic and International TMO Group potentially inorganic development and > EUR 1.2 bn. Applying strict operation of service per year economi
Slide 43: Grow abroad with mobile
Grow abroad with mobile. USD billions OECD Non-OECD Mobile Fixed USD 317 USD Focus Data/ billion s 80 billion s 203 internet 17 market 237 89 186 46 20 5 41 69 2007 2012 2007 2012 USD USD billion s 730 billion s Voice/ 669 messaging market 416 415 343 Invest 277 Potentially in growth, 157 201 inorga
Slide 44: Grow in existing footprint
Grow in existing footprint. Subscriber additions in 2007/08 for key TMO NatCos abroad Million SIMs Segment-specific propositions US > 5 Reduce churn Manage transition to 3G, leverage AWS spectrum UK: Shift to contract, shift to direct, further improve brand experience Western 2- 3 AT: Push
Slide 45: Grow abroad with mobile
Improve com- Mobilize petitiveness Grow abroad Business internet and in Germany with mobile customers Web 2.0 trend (and CEE) FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 45
Slide 46: Mobilize internet and Web 2.0 trend
Mobilize internet and Web 2.0 trend. 12.40 User-generated online video streams Top 3 video sites1: US, Billions 160 million 0.35 Ad revenue of downloads per day social networking sites US, USD billions Duplication rate of blogs: 7 months 0.07 0.03 0.01 0.00 2004 2005 2006 1 YouTube, MySpace, Yah oo
Slide 47: The need ...
The need ...
Slide 48: Support human need to network
Support human need to network. Select buddies Fit with personal interests Personal Customize user interface (UI) for me Utilize location information FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 48
Slide 49: Support human need to network
Support human need to network. Select buddies Fit with personal interests Personal Customize user interface (UI) for me Utilize location information + One click to all communication services (voice, messaging, video Social etc.) Communicate seamlessly across P2P bearers and devices inter
Slide 50: Support human need to network
Support human need to network. EXAM PLES Select buddies Fit with personal interests Personal Customize user interface (UI) for me Utilize location information + One click to all communication services (voice, messaging, video Social etc.) Communicate seamlessly across P2P bearers and dev
Slide 51: Partner, make, venture
Partner, make, venture. Partner management Own development Venturing (manage “co-opetition”) Partner with leading Internal developm ent Invest in new Web x.0 players to integrate the efforts leveraging the ventures through most popular internet existing T-Online know- “entrepreneurial services how i
Slide 52: Build the ICT business
Improve com- Build the ICT Mobilize petitiveness Grow abroad business internet and in Germany with mobile Web 2.0 trend (and CEE) With a partner FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 52
Slide 53: Growing ICT market
Growing ICT market. TC/IT revenue distribution Major trends Western Europe1 Percent 100 TC market stagnating/declining with shrinking margins TC (up to -20% p.a.) 80 ICT New growth market ICT – 60 66 IT and TC world are technically 61 converging 40 Still growing IT market IT (~6% CAGR) with attracti
Slide 54: Existing strengths in TC and IT
Existing strengths in TC and IT. Today TC IT Trusted partner for security Top 3 position (globally) in 9 services automotive IT services (9) Ongoing IP service 9 migration Over 1,550,000 SAP users 9 Unique German transport Biggest European main- 9 and access network infrastructure frame operations 9
Slide 55: Existing strengths in ICT
Existing strengths in ICT. TC + IT = ICT End-to-end management of ICT enabled processes E.g., Toll Collect (9) New platforms and solutions E.g., dynamic computing 9 Integrated infrastructure services E.g., double WAN connection 9 FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 55
Slide 56: Ensure success of ICT business by evaluating our options
Ensure success of ICT business by evaluating our options, in particular partnerships. Although attractive assets existing, T-Systems needs to overcome structural challenges, e.g. Lack of relevant international footprint Portfolio mix with high portion of declining business (TC legacy, captive)
Slide 57: Our strategy – summary
Our strategy – summary. Improve com- Build the ICT Mobilize petitiveness Grow abroad business internet and in Germany with mobile potentially with Web 2.0 trend (and CEE) a partner T= Leading broadband provider through combination of efficient technologies FY 2006 In vestor s Day In vestor Relation
Slide 58: We mobilize personal and social networking
We mobilize personal and social networking. Improve com- Build the ICT Mobilize petitiveness Grow abroad business internet and in Germany with mobile potentially with Web 2.0 trend (and CEE) a partner Imple- Financing Execution mentation T= Leading broadband provider through combination of efficient
Slide 59: Strategic financial KPIs
Strategic financial KPIs. Return on invested capital EVA Profit Financial KPIs Financial Growth flexibility Net Debt/EBITDA Gearing profitable revenue growth FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 59
Slide 60: Prioritize sources and uses of funds
Prioritize sources and uses of funds. Funding options Use Maintain attractive Free cash-flow from 1 existing current operations dividend policy flexibility Dispose Prioritize Invest in existing business cash usage 2 non-core assets (CAPEX, restructuring) Increase funding Flexibility given today’s le
Slide 61: Assets for potential divestiture under scrutiny
Assets for potential divestiture under scrutiny. DFMG US Towers Club Internet Ya.com Media & Broadcast DeTeImmobilien Sireo (remaining stake) Real estate portfolio FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 61
Slide 62: Execution has begun
Execution has begun. M easures Im plem ented Started New management structure – “One company” Sales & service, 9 Products & Innovation, Network, Administration Service Task-Forces initiated 9 T-Punkt roll-out 9 Simplified branding architecture 9 Second-brand 9 ADSL2+ for IPTV 9 Develop
Slide 63: We mobilize personal and social networking
We mobilize personal and social networking.
Slide 64: FY 2006 Broadband/Fixed Network
FY 2006. Broadband/Fixed Network.
Slide 65: Our goals 2007. Secure competitiveness of T-Com
Our goals 2007. Secure competitiveness of T-Com. Development of 40-45% DSL retail market share in 2007 broadband market 2.1 million DSL net adds leadership PSTN line losses at level of 2006 T-Home for the 100,000 – 200,000 IPTV-Customers in 2007 mass market Largest sales 786 T-Punkte (+ 20
Slide 66: Where are we today in Germany?
Where are we today in Germany? We will face challenges going forward 2 million customer loss in fixed in 2006 Innovative products clearly failed their targets (T-Home, T-One) Strong competition and price pressure in fixed and mobile Improve customer satisfaction and service quality, e.g. ava
Slide 67: Customer losses in Germany
Customer losses in Germany. 89%1 of the losses choose DSL after migration from T-Com. Custom er/ PSTN losses (in ‘000) Reasons for customer losses1 Aggressive pricing from 2005 2006 competitors Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Customer dissatisfaction with weak service Drivers of customer losses1 Migra
Slide 68: Broadband/DSL. DSL push to fight customer losses
Broadband/DSL. DSL push to fight customer losses. DSL retail net adds (in ‘000) Development in Q4/06 T-Com and resale: 525 878,000 DSL net adds Ä best quarter ever! T-Com: 563,000 DSL net adds 197 Ä best quarter ever! 186 Broadband market expected to grow by 10 million to 25 million lines in
Slide 69: Development of market leadership in broadband
Development of market leadership in broadband. Aggressively defend our competitive position. Churn managem ent Product portfolio push High network quality Triple- Attractive entry offers Play More features IPTV for all (16 MB) Best mobile network in 2006 Double- Always competitive pricing Pl
Slide 70: IPTV for the mass market
IPTV for the mass market. New strategy: tripling IPTV coverage to 17 million homes in 2007. Increase of IPTV coverage from 16% to 44% Launch of IPTV via ADSL 2+ VDSL (premium): 8 million homes Ö Mid term: VDSL in up to 50 cities VDSL/ ADSL2+ (IP TV): 17 million homes Ö ADSL2+ in up to 750 ci
Slide 71: Service Germany
Service Germany. Excellent service is key to secure broadband growth. Availability – accepted calls within 20 seconds Key focus by call center Availability: 65% Call avoidance Productivity boost 34% Expand internal resources Average in 2006 Goal 2007 External resources for peak management
Slide 72: Sales Germany. Increase number of points of sale
Sales Germany. Increase number of point of sales in Germany. Increasenumber of T-Punkte T-Punkte Increase number of own shops December 2006 December 2007 from 586 to 786 in 2007 eChannel 30 million service transactions North North 96 T-Punkte 127 T-Punkte in 2006 Goal: 15 % share of 3x3 produc
Slide 73: T-Com and T-Mobile - stronger together
T-Com and T-Mobile - stronger together. Integrated sales & service team implemented. Integrated Sales & Service Team Germany Advantages and benefits Market More focus on service than ever before Sales and T-Com/ Quality One management team for sales T-Mobile Manage- and service in Germany ment T
Slide 74: Telekom Service. Secure competitiveness in Germany
Telekom Service. Secure competitiveness in Germany. 3 units of Telekom Service Service quality Integration of customer care Concentration of service experts Call Center Reduction of costs Segment specific conditions required Technical Service Increase efficiency (e.g. increase in working hou
Slide 75: Save for Service. Efficiency program of T-Com
Save for Service Efficiency program of T-Com in Germany. Developm ent of cost base2 in 2007 Main m easures in 2007 Save for Service Marketing € 0.2 bn Simplification of product portfolio 15,0 -1,2 EUR - 0.9 bn Joint-group wide-campaign management and sourcing Production € 0.5 bn Automation
Slide 76: Roadmap Sales & Service Germany
Roadmap Sales & Service Germany. Focus on quality and competitiveness. Immediate m easures Fixing the basics Differentiation (2007) (2007/2008) (from 2008) Partner program Multichannel control Biggest branded sales T-Partner Increase number of own interface Sales shops Integrated custome
Slide 77: First achievements
First achievements. Fix the basics 2007 Planned and decided implemented Managem ent Integrated Sales & Service Team Team in Germany 9 9 Expansion T-Punkte 9 Q4/07 Sales Integrated Germany T-Partner program 9 CeBit Task force Punctuality 9 Service Task force Availability Q4/07 Germany 9 T
Slide 78: FY 2006 Priorities 2007, T-Mobile
FY 2006. Priorities 2007, T-Mobile.
Slide 79: 2006 Review: Continued Growth
2006 Review: Continued Growth. More than 106 million mobile customers worldwide, up 8.8 percent More than 25 million customers in the US, up 15.4 percent More than 27 million customers in Eastern Europe1), up 13.7 percent €27.9 billion service revenues, up 10.7 percent Mobile data source f
Slide 80: 2006 Review: Most Highly Regarded Service Company
2006 Review: Most Highly Regarded Service Company. Improved customer touch-points Number 1 in customer service in 2006 in NL, CZ, A, HU, HR and SK Number 1 or 2 in shop customer satisfaction e.g. in UK, A, CZ, NL, HU 286 new shops opened in TMO 5 plus TMH; 99 new shops opened in TMUS Impro
Slide 81: Growth Outlook 2009
Growth Outlook 2009. Estimated Mobile Market Growth – CAGR 06-09 Growth Drivers 10% Continued subscriber growth/ market penetration USA SK 8% Mobile data uptake CZ Service Revenue Growth 6% Fixed mobile substitution US HR Usage stimulation by price 4% UK 1) perception management WE Mobile
Slide 82: T-Mobile Deutschland
T-Mobile Deutschland.
Slide 83: Fixed-Mobile Substitution
Fixed-Mobile Substitution. Share of Outgoing Voice Minutes per Capita 2005A Fixed 39% 47% 45% 45% 54% 56% 59% 58% 58% 71% 67% 66% 74% 84% Mobile 53% 55% 55% 61% 46% 44% 41% 42% 42% 29% 33% 34% 26% 16% US UK FIN D F I NL E A P HU PL CZ EU* Sour ce: NRAs, CTIA, Com pan yr eports, IPSOS/Eurostat 2004/0
Slide 84: German Mobile Market: Usage Increase Still not Compensating Price Decline
German Mobile Market: Usage Increase Still not Compensating Price Decline. Price-/Usage Developm ent in Germany (indexed) Price Elasticity Price Elasticity 130% ≈ 0.6 ≈ 0.0 Price Elasticity 120% ≈ 0.3 110% +20% 100% 90% -33% 80% 70% Avg. Revenue Per Mi nute 60% 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q0
Slide 85: T-Mobile Brand Not Appealing to Young Segment
T-Mobile Brand Not Appealing to Young Segment. Young not@work Students Pupils TMD share 33% 26% 35% 06 06 06 Average customer age for T-Mobile Deutschland is 42 years High price perception associated with Brand Relatively low Net Promoter Score Sour ce: TMD, GfK FY 2006 In vestor s Day In vest
Slide 86: Stabilization Measures for T-Mobile Germany
Stabilization Measures for T-Mobile Germany. 5 levers ... ... to implement “Game changers” 1 Push Correct price and image perception in Young Refresh Young segment customer Segment-specific offers for youth (e.g. Relax / Max 2 Student, Xtra Friends NonStop, w’n’w@home) base Second Target share
Slide 87: Targeted Approach to Young & Low Frills Market Segments
Targeted Approach to Young & Low Frills Market Segments. Direct White Label SPs Online Sales Partner Own young focused second brand FY 2006 In vestor s Day In vestor Relation s Mar ch 1, 2007, Page 87
Slide 88: T-Mobile USA
T-Mobile USA.
Slide 89: T-Mobile USA. Successful New Products Drive Growth
T-Mobile USA. Successful New Products Drive Growth. myFaves tariffs successfully launched Unlimited calling to 5 people on any network People-centric unique user interface Converged devices (e.g. Sidekick 3 & Blackberry Pearl) drive data ARPU: Approx. $6.50 in Q4 (up 36% yoy) >200,000 ne
Slide 90: T-Mobile USA. Leading in Service & Outstanding Network
T-Mobile USA. Leading in Service & Outstanding Network. JD Power Award for best customer care 5x in a row Expand quality distribution in 2007 Expand # of company stores Add high quality dealer locations Improve coverage Further expand suburban coverage 1,200 3G cell sites already deplo
Slide 91: T-Mobile UK
T-Mobile UK.
Slide 92: T-Mobile UK: Profitable Growth And Improving Operations
T-Mobile UK: Profitable Growth And Improving Operations. 2006: Balancing Growth And Profitability Service revenue growth in 4Q of 16% YoY Margin back at 26.9% in Q4 while adding a strong 246k net adds Flext: more than 1.3m customers since February 2006 Driving Most Highly Regarded Service
Slide 93: Other Markets
Other Markets.
Slide 94: Review 2006 / Operational Levers
Review 2006 / Operational Levers. Achievements 2006 Operational Levers (2007/08) Simplified & innovative tariffs: Develop custom er base & NL - 225k web’n’walk subs, 300k increase usage: Flex subs; Austria - 80k Mobile New propositions Internet Cross- & up-selling NL Significant improvem e
Slide 95: Mobile Industry Trends
Mobile Industry Trends.
Slide 96: Further Trends and Developments in the Telco Industry
Further Trends and Developments in the Telco Industry. Personal communication in social networks and communities replacing traditional voice and messaging usage patterns Mobile Internet as mega trend Multi-access and net-centric IP services Devices and user interface as differentiator Opport
Slide 97: Focused and Innovative Product Roadmap
Focused and Innovative Product Roadmap. Strategic Direction Product Example Inner circle bonding – Community Tariff & UI Personal leverage personal Mobile IM Communication social networks Easy mobile email Strengthen category leadership in New „worry-free“ Mobile “real time” Internet with wo
Slide 98: Summary
Summary. Deliver on 2007 financial envelope Stabilize T-Mobile Deutschland financial performance Sustain growth & profitability in TMUS & TMUK and other markets Increase execution speed and build on the One Company success Continue focus on contract growth & revenue market share Continue a
Slide 99: FY 2006 Operational Priorities – T-Systems
FY 2006. Operational Priorities – T-Systems.
Slide 100: Operational Priorities 2007. Challenges and Measures
Operational Priorities 2007. Challenges and Measures. Revenue planning Adjustments in captive business Total Revenue flat Significant reduction of internal revenue as a result of price decrease of which external significant growth of which very ambitious international growth Operational Prio
Slide 101: Operational Priorities 2007. Measures to boost revenue
Operational Priorities 2007. Measures to boost revenue. Operational Priorities Measures Realization Synchroniz e industry lines and local Mar. 2007 business units Launch global key account management Mar. 2007 International Using alliances for global IP VPN coverage Feb. 2007 business Expand
Slide 102: Operational Priorities 2007. Measures to boost revenue
Operational Priorities 2007. Measures to boost revenue. Operational Priorities Measures Realization Horizontal IT and TC infrastructure services Comprehensive vertical competency (automotive, public, and telco) Portfolio Selected vertical topics (e.g. road charging, principles transaction bank
Slide 103: Operational Priorities 2007. Measures to increase efficiency
Operational Priorities 2007. Measures to increase efficiency. Operational Priorities Measures Realization Personnel reductions of about 2500 FTE Dec. 31, 2007 Consolidate customer independent data centers Dec. 31, 2008 Personnel Consolidate service desk sites Dec. 31, 2007 reductions, Consol
Slide 104: Operational Priorities 2007. Measures to increase efficiency
Operational Priorities 2007. Measures to increase efficiency. Operational Priorities Measures Realization Streamline service processes: migrate T-Systems Q4/08 portfolio to flexible delivery chain. Initial migration steps have already been realized in Feb. 2007 a pilot. Processes Plan is to re