Deutsche Telekom AG
XTRA-DTE
Company Overview
Deutsche Telekom AG, together with its subsidiaries, provides integrated telecommunication services. The company operates through five segments: Germany, United States, Europe, Systems Solutions, and Group Development. It offers fixed-network services, including voice and data communication services based on fixed-network and broadband technology; and sells terminal equipment and other hardware products, as well as services to resellers. The company also provides mobile voice and data services to consumers and business customers; sells mobile devices and other hardware products; and sells mobile services to resellers and to companies that purchases and markets network services to third parties, such as mobile virtual network operators. In addition, it offers internet services; internet-based TV products and services; and information and communication technology systems for multinational corporations and public sector institutions with an infrastructure of data centers and networks under the T-Systems brand, as well as call center services. The company has 242 million mobile customers and 22 million broadband customers, as well as 27 million fixed-network lines. Deutsche Telekom AG has a collaboration with VMware, Inc. on cloud-based open and intelligent virtual RAN platform to bring agility to radio access networks for existing LTE and future 5G networks; and partnership with Microsoft to deliver high-performance cloud computing experiences. The company was founded in 1995 and is headquartered in Bonn, Germany.
Name
Deutsche Telekom AG
CEO
Timotheus Hottges
Website
www.telekom.com
Sector
Diversified Telecommunication Services
Year Founded
1995
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Bulls Say
The merger of T-Mobile US with Sprint was a game changer for the US wireless industry. Larger scale, synergies, and a good spectrum position will ensure good returns on capital for the next decade.
Deutsche’s network strategy in Germany is optimal, coupling network upgrades with price increases to earn a return on incremental investment.
Deutsche Telekom’s management has exceptional capital allocation skills, showing discipline and patience. The company refused to acquire Sprint several times until it found the right price. Management has been patient in selling its tower arm.
Bears Say
The core 2.5 GHz spectrum T-Mobile US is using is composed of many small regional licenses that are leased from educational institutions. Other firms have been trying to acquire some of this spectrum.
If Vodafone were to lower prices to regain lost subscribers, it could trigger an unhealthy market environment in Germany.
Vodafone is investing to improve speeds in its German cable network. This could cause Deutsche Telekom to speed up its FTTH rollout to defend its market share.