The first step in overcoming a problem is to admit it. Deutsche Telekom (DT) did just that earlier this week. DT is taking strategic steps to stay relevant when faced with the erosion of their core business. A Tier 1 Carrier in Europe finally woke up and smelled the coffee.
In an internal meeting, Deutsche Telekom CEO Rene Obermann outlined a new long-term strategy for the telecoms giant. The message, that went out to over 1,000 of DT’s top and middle managers, said that the DT revenue breakdown must reflect a focus on data services.
Telecommunications technology trends have all but relegated voice to being “just another data service” for almost a decade. Skype, in particular, has shown that people are willing to give up a little bit of quality if the price is right. DT is now responding to the impact of free voice calls.
A Tier 1 Carrier in Europe finally woke up and smelled the coffee
Telecommunications companies now face a choice; Become a wholesaler of large bandwidths to large enterprises and retail carriers, or move up the value chain with software solutions that strengthen relationships to the Enterprise and Consumer markets.
Mr. Obermann’s five-year strategy for DT focuses on developing applications that leverage their core telecommunications assets. Mobile applications in the consumer market and SaaS solutions to enterprise verticals are the new focus. Specifically the Electricity and Healthcare industries were mentioned.
This 5 year strategy will no doubt mean a re-alignment of resources. A cost cutting program will be put in place although no specifics were discussed. Encouraging however, was a pledge to invest over €1 Billion into infrastructure and development.
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