Deutsche Telekom Capital Markets Day (2): highlights Europe

Market revenues estimates 2012-2015 from EUR 65 to 67 billion:

• Blue Ocean CAGR +6%
• mobile internet EUR 4 to 6 bn
• connected home EUR 10 to 11 bn
• IP services EUR 5 to 8 bn
• B2B/ICT EUR 17 to 19 bn
• Red Ocean CAGR -6%

DT targets:

• Blue Ocean CAGR 2012-2015 12% and raise to 28% share of rev.
• Red Ocean: indirect cost redux cum EUR 0.6bn (6%) by 2015, direct cost decrease 2% by 2015.

One DT Europe strategy:

• All IP: "All-IP transformation represents the creation of a simplified and standardized network", separation of OSS and BSS.
• B2B 'Big Bang'
• Mobile internet, innovation: targets 11 NatCos with LTE coverage of at least 60% (today 4 with 30%).
• 'Cost revolution', operational excellence: Shared service centers, IT supply centers

"Differentiated steering of NatCos, according to market position, to create relevant focus"; 4 NatCo clusters:

• Senior leaders (Greece, Hungary, Croatia, Macedonia): stabilize topline, "Increase Blue Ocean topics revenue share" (the growth areas), radical opex redux
• Macedonia: capex redux.
• Junior leaders with a challenge in mobile (Romania, Slovakia, Montenegro): FMC, radical opex redux.
• Romania: smart TV, B2B FMC
• Mobile runner-ups (Poland, CR): Increase market share.
• Poland: boost B2B
• Smart attackers (NL, Albania, Austria): increase revenue (esp. B2B, mobile data), reduce capex.
• NL: unconventional attacker, boost efficiency, "network performance is only a hygiene factor"
• Austria: leading attacker.

Focus from quarterly EBITDA to 'cash contribution' (i.e. EBITDA - capex). Focus on revenue + cost.

Targets 2012-2015:

• Revenue CAGR organic +1.4% (reported -0.6% as a result of regulation) to EUR 14bn in 2015.
• Traditional from 81 to 72% share, growth areas from 17 to 24%, B2B/ICT from 3 to 4%.
• Capex stable at EUR 1.7bn (excl. spectrum).