Annual Report 2013

Anatomy of
the digital future.

The Backbone The Head The Heart

Anatomy of the digital future.

Life is for sharing. We make this possible by providing digital arteries for society. In the form of the best, fastest, and the most secure networks. In the form of innovative products and services for the fixed network, for mobile communications, Internet, and television. And in the form of innovative IT solutions for business customers.

We are looking ahead: The anatomy of the digital future is already taking shape and we are an important part of it. As the heart – with our enthusiasm for communication and our motivation to keep improving. As the head – with a whole raft of innovations developed in-house or together with imaginative partners. And as the backbone – with an ambitious program to build out today’s best networks. We will keep bringing the digital world to as many people’s fingertips as possible, now and in the future.

  • We are the heart of the digital future.

    More than anything else, our aim is to delight our customers. This is the yardstick by which all of our strategic initiatives are measured. We would like people to associate our products with positive emotions and to enjoy using our services. Partly this involves making it as convenient as possible to access our networks – at home, at work, on the train, or in the car. Yet it also includes seamless service provision on any number of devices. And the peace of mind that comes from knowing we give top priority to protecting our customer data, with security standards “Made in Germany.” If, despite our best efforts, technical problems arise, one of our 20,000 service staff in Germany is never far away.

    More
    than
    40,000

    people attended our
    Street Gigs.

    Mobile
    television

    Entertain to go – Deutsche Telekom’s
    TV service – is now available for smart-
    phones and tablets.

    100,000

    customers of Deutsche Telekom use Spotify for
    music streaming.

  • “When I share my music, my audience responds just as if they were at a live show.”

    Singer and musician Astrid North loves the interaction with her fans. And thanks to the fastest network she can – without having to be on stage.

    To make this happen, our customers need high-speed, high-performance networks – no matter where they are. ­Because wherever you are, there are always moments you want to share. Our secure cloud solutions provide secure access to services, programs and data at any time for our consumers and business customers. Now any location can become a concert venue.

  • 15,000

    Telekom employees are involved in volunteer work.

    Twenty-six pianists from 12 countries competed in
    the 2013 International Telekom

    Beethoven
    Competition

    in Bonn.

    “Yes, I can!” initiative has already supported

    over 500
    projects

    for children and young people.

    Sharing special ­moments brings people together.

    Succeeding together – our goals for our customers are what drive us as a company. That’s why we value diversity and equal opportunities for all employees. A clear commitment to sustainability is just as important to us as accepting social responsibility and supporting culture and sports. So that the digital future benefits all of us together.

  • Help for our customers, whenever, wherever: face to face, e-mail, Facebook, or the good old telephone.

    The De-Mail Act.

    The German Federal Ministry of the Interior (BMI) developed this new service together with representatives of business, government, and professional bodies. It is based on the De-Mail Act, which came into force in May 2011. Secure login procedures and encrypted transmission, as well as send and receive confirmations, enable secure and verifiable electronic communication.

    De-Mail makes sure customers and their data always stay on the safe side.
    Our Customer Service team is made up of some 13,000 people, making it one of the biggest service units in Europe.

    How can we be of service?
    New service concepts from Deutsche Telekom.

    Good service has to be measurable. So we regularly ask our customers what they want and have our products and services externally reviewed. This year, for example, TÜV Rheinland (Technical Control Association) tested Deutsche Telekom service units. Telekom Shops, our technical service and our free customer hotline were all graded as “good.” We want to do even better in future. In 2013, we launched a range of new services and technologies that make life easier for our customers.

    In touch with our customers through all channels.

    One example is our “Telekom hilft” (Telekom helps) customer service format on Twitter and Facebook. This gives customers new channels for contacting us – and we can respond to inquiries faster and more directly. Of course, we also continue to be available for our customers on site.

    Serving consumers and the environment – buying back used devices.

    Our dense network of around 750 Telekom Shops not only sells cell phones – now we buy them back as well. Employees in the shops assess the value of the device and the customer receives a voucher for the buy-back amount that can be redeemed in any Telekom Shop. Of course, any prospective seller can also get their mobile phone valued in advance using the Telekom Shop app. The Telekom Shop then sends the device to our partner, Teqcycle. They test each device to make sure it is fully functional, and delete any data stored on it that the customer has not removed. Finally, the cell phones are approved for resale. Faulty devices are recycled in an environmentally friendly way. This option thus benefits both our customers and the environment – and allows us to reinforce our customer contact.

    We come to the customer – easier registration for ­De-Mail.

    When secure e-mail communication is paramount, De-Mail is the optimum solution (see info box on the right). De-Mail is a secure, confidential and verifiable e-mail service, making it ideal for communicating with government agencies and for legal transactions. 1.5 million customers have now registered with De-Mail providers. In addition, we already have signed up 100 large companies and 5,000 small and medium-sized enterprises for De-Mail. Before using the service for the first time, customers have to register using an approved form of identification. Until now, this meant they had to visit one of our many Telekom Shops. Now, on request, we will go directly to meet our customers – free of charge at any agreed location in Germany, whether at work, out and about, or simply at home. So our customers have more time for the ­essential things in life.

  • Industry partner for M2M communication.

    Machines that communicate with one another independently make life easier for many of our customers. For example, truck delivery routes can be planned more efficiently, remote maintenance carried out on machines,­ or alerts sent out by vending machines before their stock runs out. We are already a leading M2M (machine-to-machine) service provider, offering solutions for a wide range of industries including­ ­logistics, automotive, energy, health, commerce and transport together with our partners around the world. Our high-performance mobile ­network, IT expertise and local presence for service, sales and ­operation make us a valuable partner in the M2M field – both for customers and for providers.

    Innovative M2M solutions in the home.

    If a person in need of care gets out of bed unassisted, there is a risk that they might fall and be seriously injured. An intelligently networked care bed can provide greater safety while easing the burden on family caregivers at home. Bed sensors, for example, can detect when a patient gets out of bed and immediately switch the light on. At the same time, an M2M communication module sends information via the Deutsche Telekom network to the German Red Cross (DRK) control center in Herten. DRK can call the patient back via the same connection, and when necessary can alert specified family members by phone or text message. If needed, DRK can also send a care team to provide assistance.

    Our products offer maximum data security along with personalizable protection and privacy features.
    Digital networking doesn’t stop at the modern cowshed.

    M2M in the cowshed

    Even cows can send texts with M2M. In conjunction with our French partner MEDRIA Technologies, we have developed a system that uses special neckband sensors to monitor cows’ vital data. The farmer automatically receives a message when a cow is about to calve – so there is no need to sit out the night in the stalls. As a first step, we are equipping 5,000 farms across Europe with these systems and SIM cards.


    We protect what’s important to you.

    Interest in the cloud and using its services is steadily growing. Nearly one in every four Internet users in Germany is now an active cloud user, according to a survey we commissioned. At the same time, data ­protection and the security of Internet communication are becoming­ ­­increasingly important topics of public debate. We therefore offer ­services to address both of these trends.

    Fast, secure, always available – how consumers and business customers benefit from cloud services.

    The cloud keeps getting bigger. We are well positioned in this attractive growth market, which experts estimate will be worth EUR 200 billion in 2017. We offer maximum security cloud services worldwide along with innovative products and state-of-the-art infrastructure to business and consumers alike.

    If you had to choose, which would be more important to you personally in the online world?*

    in %

    * Representative survey of 1,500 Internet users in Germany, October 2013.

    Data privacy and communication – what matters to people.

    In conjunction with the Munich Security Conference, we commissioned a survey of 1,500 Internet users in Germany. The survey revealed that if they had to choose, 79 percent of those surveyed would rank online security over online freedom. In another survey we commissioned that was conducted by the Handelsblatt Research Institute, 62 percent of respondents desired more data protection in Germany. At the same time, this survey indicates that at least some customers are not opposed in principle to companies analyzing their data – but it depends what for.

    We believe we have a special responsibility not only to meet the needs of our customers and comply with German data protection policies, but also to be a leader in data privacy. Together with GMX, WEB.de and now freenet, we launched the partners’ program “E-mail made in Germany.” This initiative is committed to high security standards, with the aim of making e-mail communication in Germany even more secure. Messages are therefore sent encrypted and stored exclusively in German high-security data centers. We also want to make our customers’ mobile communications increasingly secure. That is why we improve encryption standards on an ongoing basis, so that we provide not only the best, but also the most secure network.

  • We are the head of the digital future.

    Telephone calls and data transportation are only one part of a much bigger future. We want to offer our consumers and ­business customers impressive innovations that go beyond optimum network access, such as intelligent solutions in the energy and health sectors, and for connecting cars with the Internet. We do not intend to develop all these services ourselves. We want to bundle as many products as possible for our customers, and make these accessible around the clock. To achieve this, we seek out partnerships with creative companies whose products make life simpler, more interesting, and more secure. Whether start-ups or established corporations, the important thing for us is that we are an attractive partner.

    We now have

    500,000

    connected cars.

    We are building the largest data center in Germany, covering an area of

    150,000

    Deutsche Telekom provides more than

    3.6 million

    users in businesses with services from the cloud.

  • “My business is always open to innovative ideas.”

    Felix Klühr and his start-up – qLearning – benefit from the infrastructure, know-how, and spirit of our hub:raum incubator.

    A company’s size doesn’t matter when it comes to creating good business ideas. Innovation usually starts in small ­companies, and we want them to inspire us. After all, even a large, established company has to constantly reinvent itself.­ We aim to learn from all enterprises that have a powerful vision for the digital future. One way that we do this is by ­specifically supporting start-ups and investing in innovative business ideas, so that we remain able to offer our customers the best products and services all the time.

  • Business customers test our solutions
    together with researchers at our

    Innovation
    Center.

    Networked
    healthcare
    for the future

    Hospital services from the cloud.

    400

    analysts, research scientists and young
    entrepreneurs work together in the
    T-Labs creating fresh ideas.

    Sharing good ideas makes them grow.

    Innovation will become even more important to us in the future. To support our own developments, we also build select ­partnerships with established major players as well as young start-up firms. This creates a win-win situation. Our customers­ gain new, attractive products. Our partners benefit from our network, our strong brand, and our unique production ­environment. And we become even fitter for the future.

  • Space for ideas – innovation at Deutsche Telekom.

    We have a clearly formulated goal: we want to become more innovative, step by step. And we want our customers and business partners to view us as an innovative company. A company that picks up new ideas enthusiastically. That’s why we build partnerships with small and large businesses and invest in innovative start-ups. Our venture capital company T-Venture now manages a portfolio of around 100 companies, while our incubator hub:raum is currently helping eight start-ups on their way to success. Practical apps such as Mytaxi are the result of this dedicated support.

    Deutsche Telekom partnerships – innovating better, together.

    Teamwork is our key to success – this applies to our work in Germany as well as our cooperations in Silicon Valley, Krakow or Israel.

    We already offer a variety of partnership services including Spotify for music streaming, Groupon for coupons, Jawbone for portable technologies, and Lookout for smartphone security solutions. And in December 2013 we formed a strategic partnership with short messaging service, Twitter. In future, the start screens of Deutsche Telekom devices will display Twitter news messages – known as tweets – on subjects ranging from business and politics to sports and celebrities,­ to make sure our customers are always up to date. And Twitter benefits from the partnership since a larger number of people will get to know about the short messaging service. And the partnership gives us an early insight into new Twitter services, plus we are a preferred partner when it comes to joint marketing, advertising and customer service activities.

    The qLearning start-up is developing an app that helps students prepare for specific exams on the move.

    Innovation has a new home.

    Berlin has become a center of the German start-up scene. Since November 2013, we have grouped together our innovation activities at one location in Berlin that unites the past and future of telecommuni­cations. The historical Fernamt 1 was the most modern telecommuni­cations building in the world when it opened in 1929. It is now home to the Telekom Innovation Arena, providing around 8,000 square meters of space for new ideas. The Berlin team for our hub:raum incubator has also moved here, as have their colleagues from T-Labs, the Creation Center, design department and Group Business Development. Three of the eight start-ups supported by hub:raum have also relocated to the Telekom Innovation Arena.

    A good climate: we identify potential areas for ­customers to save money by reducing energy ­con­sumption and offer ways of making homes more energy efficient.

    Making better and more efficient use of energy.

    We want to play our part in making energy consumption as efficient as possible. We start by optimizing energy distribution over existing power grids (smart grid). For energy consumption in the home, we can also identify potential savings – e.g. with intelligent meters, which we developed in collaboration with energy services provider, ista. Heat, water, gas, and electricity usage data is automatically sent to ista’s servers via our mobile network, negating the need for manual meter readings. Additionally, consumers can use apps to track and control their energy consumption.

    Energy optimization and managing your home while on the move are becoming increasingly important in a mobile society. Through our Smart Home brand, we offer practical app-based solutions for controlling and checking lighting, heating, and smoke detectors, for example. Together with well-known partner companies, we developed the Qivicon platform, which encompasses a wide spectrum of offerings for a comfortable, secure, and energy-efficient home.

    To find out more, visit:

  • Our healthcare and mobility innovations are also a response to the demographic shift.

    A finger on the pulse – solutions for everyday use.

    Improving health, enhancing quality of life.

    With demographic change, rising healthcare costs, and a shortage of medical doctors, the medical and health industry is facing significant challenges in many countries. This calls for solutions that support patients and family members, reduce doctors’ workloads, and assist preventive healthcare so that people don’t require medical treatment in the first place.

    Increasing numbers of people want to have digital information on measurable aspects of their own health. Smartphones already provide their owners with many ways of collecting health-related data, such as ­distances covered. A new solution we have developed in collaboration­ with preventive healthcare specialist medisana adds to these possibilities.­ Metria is a credit card-sized wearable sensor that records 20 different vital signs, 24 hours a day, for up to 7 consecutive days. ­Information about body temperature, sleep patterns, and physical­ ­activity can then be downloaded to a mobile device or secure data portal on the Internet. An advanced version of Metria can even record a seven-day electrocardiogram (ECG).

    And finally, we help to optimize processes in the healthcare system. For example, we launched an electronic health card in two test regions, ­Bavaria and Saxony. T-Systems is responsible for equipping 500 doctors, dentists, and psychotherapists plus five hospitals with all the equipment they need to use the health card system efficiently.

    Driving a car is more than just getting there.

    We are homing in on the huge potential offered by the connected car. Intelligent technology based on machine-to-machine solutions (M2M) makes motoring a safer and more enjoyable experience. Our solutions allow a wider range of practical, car-related services – such as the ­Connected Drive service package, which we offer in partnership with BMW. Here, the vehicle communicates independently with the manu­facturer. This enables a “thinking” maintenance log book as well as ­extended traffic information and the eCall automatic emergency call system, which will be mandatory in all new vehicles in the EU from 2015.

    We have installed 1,900 HotSpots in the Sixt car rental fleet to enable an in-car broadband Internet connection for up to eight devices. And, thanks to our solutions, the car-sharing provider car2go knows the location, ­mileage, and fuel level of its vehicles at all times.

    With our partner DriveFactor, we offer a solution that records acceleration, braking, and steering data in a moving vehicle and sends it to DriveFactor’s­ servers.

    Transmittable vehicle data

    To find out more, visit:

  • We are the backbone of the digital future.

    We already offer our customers excellent networking capabilities. In Germany, we are not only the largest (V)DSL provider, but we also supply the 100 biggest cities with the new LTE mobile communications standard. Our outstanding network quality is repeatedly confirmed by independent tests. But we’re not going to stop there. Our ­ambitious network expansion program provides the basis for continued growth of the digital society.

    LTE+

    offers speeds of up to 300 Mbit/s for super-fast
    surfing on the go.

    Our modern optical
    fiber network

    already enables download speeds of up to 200 Mbit/s and upload
    speeds of up to 100 Mbit/s at home.

    40,000

    HotSpots for surfing in Germany.

  • “So that I can stay in touch with my grandchildren, even when I’m not visiting.”

    There’s no stopping Gian when visiting grandma Dietlind Steinhoff in the countryside. And the rest of the time? The fastest network keeps them connected, of course.

    Families stand by each other, whether all generations live under one roof, or in different cities. Our networks help people stay in touch – no matter how far apart they are. Conversations and feelings are already shared over 300,000 km of fiber-optic cables. We plan to extend society’s digital arteries even further in the future, so that everyone can stay connected.

  • Faster Internet access by 2016
    for up to

    24 million
    households.

    8 devices can use WiFi simultaneously – turning your

    car into
    a hotspot.

    We are investing

    EUR 6 billion

    to upgrade broadband technology.

    Making the best ­network even ­better helps the digital ­society grow.

    We have set out a firm timetable for network expansion. We will invest extensively to make the best network even faster and more powerful. By 2015, we want 60 percent of the German population to be able to access the Internet with speeds of up to 300 Mbit/s via their smartphone. Our next target, by 2016, is to provide 24 million households in Germany with ­particularly high-speed fixed-network lines. Compared to our competitors, we have the highest bandwidths and best network coverage so we can reach even more people with even more innovative products. We want to make the networks faster in all of our European markets by 2018, and standardize different network structures. By doing this, we are helping to reach broadband targets at national and European level.

  • Special moments want to be shared right away, no matter where our ­customers are.

    Enabling ever increasing communication data volumes.

    People are sending and receiving more and more data. In 2015, a city of 50,000 people will generate the same data traffic in one month as the entire Internet did in a whole year back in 1997. In addition, usage ­habits are changing dramatically. Already 43 percent of all Internet users listen to music via streaming services such as Spotify. And the Internet will continue to link up with other technologies: In 2016, it is predicted that 80 percent of all new cars sold will have an Internet connection. An ­excellent network is essential so that constantly rising data volumes can be used at ever increasing speeds and ideally from anywhere. We want our networks to be able to keep pace with growing demands in future. So to provide our customers with the best services wherever they are, ­whatever device they use, we are building out our mobile and fixed networks both in urban and rural areas.

    We now offer public WiFi access at more than 40,000 HotSpots across Germany.

    LTE.

    (Long Term Evolution) is a fourth-generation mobile standard that enables much higher transmission speeds than the earlier UMTS technology. Our aim is to make the best network available to everyone in ­Germany – more efficiently, faster, more ­easily, cheaper, and nationwide.

    To find out more, visit:

    Always mobile in the best network.

    The number of mobile devices is constantly growing, and for many people accessing data-intensive services at any time on the move is now routine. So we offer WiFi access at more than 40,000 public HotSpots across Germany. The new mobile communications standard LTE+ (Long Term Evolution), with speeds of up to 300 Mbit/s, is ­being rolled out to more and more areas. Because we want as many people as possible to benefit from these developments, in 2015 we aim to provide 60 percent of the German population with access to these bandwidths.

    Group’s mobile customers.

    millions

  • Faster. EASIER. MORE SECURE. We are building out the best network with optical fiber.

    Innovation in our data centers.

    Optical fiber technology is also used in our data centers, where it ­facilitates cloud services of the highest quality. Significantly, T-Systems will in future operate all cloud solutions on a single platform. This offers our customers limitless scalability, better service and convenience, and constant availability without interruptions for updates or maintenance. Data back-ups in a second data center make sure that no information is lost. In close cooperation with network equipment vendor Cisco, we have established an integrated concept that offers maximum flexibility. For example, our customers can decide themselves whether they want to process their data exclusively in data centers located inside the EU or within Germany.

    Fiber-optic technology means our ­customers currently benefit from ­trans­mission speeds of up to 200 Mbit/s.
    Work on network build-out continues. State-of-the-art fiber-optic cables are being laid to every home.

    Innovation above and below ground.

    Optical fiber is the fastest transmission channel there is, since information is carried at light speed. To offer our customers the best access to the Internet and our services, we are therefore focusing on innovative fiber-optic solutions that also make optimum use of the existing copper cable network. Fiber to the curb (FTTC) means that we are replacing copper cables with fiber-optic cables from the local switching center to our roadside distribution boxes. From there, the existing copper cables still run into our end customers’ homes. The distribution boxes themselves are being upgraded to transmit more data than before over the copper cables – the keyword here is vectoring. Over the next few years, we will invest heavily in fiber-optic roll-out and modernizing distribution boxes. In roll-out areas – depending on the volume of pre-orders – we are installing fiber to the home (FTTH), which makes the advantages of fiber optics even more apparent. Download speeds of up to 200 Mbit/s and upload speeds of up to 100 Mbit/s are possible in these households.

    Network expansion is a complex and challenging project – technically, financially and politically. So that everyone can benefit from the new technology as soon as possible, we also believe in a fair regulatory framework that gives us the necessary flexibility when developing our networks. We allow our competitors to profit from our technological innovations, and in return we expect appropriate compensation for our high levels of investment.

    FTTH:

    Fiber to the home. A fiber-optic cable runs to the customer’s home. ­Fastest possible transmission path for digital information.

    FTTC:

    Fiber to the curb. A fiber-optic cable runs to the distribution box. From there, data is carried to the customer’s home via the existing copper cables.

    Vectoring:

    Method of increasing transmission rates in copper cables between the distribution box and home. Vectoring minimizes electromagnetic interference between individual copper cables, enabling significantly higher transmission bandwidths of up to 100 Mbit/s for download and up to 40 Mbit/s for upload at present.