Deutsche Telekom AG is one of SILCF's partners:
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Deutsche Telekom - on the path to becoming a global player
Deutsche Telekom AG is Europe's number one in telecommunications and the third largest carrier in the world.
Deutsche Telekom's conversion into a stock corporation on January 1, 1995, and its stock market flotation in November 1996 were the company's keys to competitiveness in a global telecommunications market. With our successful capital increase in June 1999, we created the financial basis for pressing ahead with our internationalization strategy. With more than two million shareholders, Deutsche Telekom has more shareholders in Germany than any other German company and more shareholders outside its home country than any other company in the world.
The entire range of telecommunications services
Deutsche Telekom today, together with its subsidiaries and affiliated companies, is a high-tech corporate group in telecommunications which has assumed a leading position in many areas with its products and services:
The number of mobile telephony customers using the domestic digital mobile communications network T-D1 increased 67 percent from 3.3 to 5.5 million in 1998 compared to the end of 1997. By mid-1999, the number of T-D1 customers had grown to 6.8 million – our next target is to have 8.5 million subscribers by the end of the year. Following the acquisition of the British mobile communications operator One 2 One (June 30, 1999), which has 2.65 million subscribers, and the increase in its shareholding in Austria's max.mobil, the corporate group was serving some eleven million mobile telephony customers through its subsidiaries in Europe at mid-1999, making it the number 3 in Europe. In addition, Deutsche Telekom has stakes in several mobile telephony network operators in other European countries and is thus well positioned in this growth market.
The number of telephone lines provided by Deutsche Telekom in the fixed network rose some three percent to 46.5 million in 1998, and by mid-1999, had increased to 47.2 million. The company continued to record strong growth for ISDN channels, which increased 38 percent to some 10.1 million in 1998 and to 11.7 million in the first six months of the current year. At mid-1999, ISDN channels accounted for some 25 percent of the lines in Deutsche Telekom's network. This means that the company has by far the most widely installed ISDN network in the world, with more ISDN lines than the USA and Japan together.
Another example of Deutsche Telekom's success is the development of its T-Online service, which had 2.7 million customers at the end of 1998. With some 600,000 new customers in the first half of 1999 for a total of about 3.3 million T-Online subscribers, Deutsche Telekom doubled its growth rate in this business segment compared to the same period last year, further expanding its position as Europe's leading on-line and Internet access provider. A strong increase in the number of sessions was also recorded: In the first half of 1999, there were some 700 million, which was 80 percent of the total number recorded in the previous year.
The number of homes connected to cable TV had risen some two percent from 17.3 to 17.6 million at the end of 1998. The cable business has meanwhile been spun off from Deutsche Telekom and divided up into nine regional companies. The offer to acquire stakes in these regional companies has been well received by interested parties at home and abroad. Very positive results were obtained in the preliminary bidding, fully meeting the expectations of Deutsche Telekom's Board of Management.
The advantage is crystal clear: the information superhighways of Deutsche Telekom AG
Because Deutsche Telekom was quick to invest in state-of-the-art technologies such as fiber optics, the German telecommunications infrastructure sets standards for the world to follow. With more than 150,000 kilometers already laid, Deutsche Telekom has the densest optical fiber network in the world. While the rest of the world is still talking about information superhighways, Deutsche Telekom is already operating these high-speed data networks. Germany's business centers have been linked by high-performance networks since 1993, which transfer 2.5 gigabits of data per second.
In 1997, Deutsche Telekom completed the two major investment projects it had been engaged in over the past few years: the modernization of eastern Germany's telecommunications infrastructure costing DM 49 billion and the digitization of the network in the western part of Germany involving investments totaling DM 12 billion. Deutsche Telekom is thus able to provide its customers with one of the most modern telecommunications infrastructures in the world.
Deutsche Telekom intends to further strengthen customer loyalty and stabilize its market position with services directed to specific target groups. In addition, Deutsche Telekom will offer integrated projects to make better use of the competitive advantage it has as the only full-service provider in Germany. T-D1@T-Online is one example of this: It provides Deutsche Telekom's mobile telephony customers with an opportunity to access the Internet via the T-D1 network at very favorable rates.
Formation of the Group
Over the past few years, Deutsche Telekom as a company has developed a new identity very much its own. And the Group of affiliated companies is being expanded systematically. Deutsche Telekom has founded subsidiaries in market segments with particularly dynamic growth, such as mobile communications and named accounts. The aim in doing so has been to gain strategic flexibility within Deutsche Telekom's corporate structure and to take advantage of market opportunities.
Internationalization
One important accomplishment over the past few years has been the expansion of Deutsche Telekom's international activities.
Our business philosophy is: offer products with a global reach, and service and support in close proximity to customers. We are making global investments in order to offer our customers a global portfolio of products. We have established a presence in the major economic center's of the world, serving customers in more than 65 countries around the globe through our regional units in Europe, America and the Asia-Pacific region, our international joint ventures and affiliated companies as well as Global One.
In keeping with our motto "follow the customer - foresee the demand", we are acquiring stakes and entering into joint ventures with competent national partners in other countries, for example, in Asia: Satelindo (Indonesia), Islacom (Philippines) and TRI (Malaysia). MATAV, our affiliated company in Hungary, is fully consolidated in our group financial statements and meets all requirements for acting as a hub for telecommunications traffic from and to eastern Europe.
Substantial increase in net income in the 1998 financial year
In the first year following the complete liberalization of the German telecommunications market, the Group maintained its course of the last few years and continued to grow throughout 1998. Revenue rose 3.4 percent to DM 69.9 billion, or approximately Euro 35.64 billion. . After deducting revenue that was invoiced for competitors, the Deutsche Telekom Group still shows an increase in revenue of 1.5 percent. There was a declining trend for long-distance and international calls as a result of intensifying competition. To strengthen its competitive position, Deutsche Telekom introduced steep price cuts for regional and national long-distance calls ahead of schedule on January 1, 1999. These price cuts together with other price-related measures in the first half of 1999 were a major reason why revenue declined some four percent to Euro 16.8 billion in the first half of 1999. Nevertheless, these measures enabled Deutsche Telekom to further strengthen its position in the face of competition that is fiercer than anywhere else in the world and which caused prices for national long-distance calls, for example, to plummet an average of 72 percent in the first year following liberalization (by comparison: USA, minus 20 percent; Great Britain, minus 31 percent). In 1998, there was clearly a disproportionately large increase in net income compared to revenue. Net income rose 27 percent to DM 4.2 billion / Euro 2.15 billion. In the first half of 1999, net income remained virtually at the same level (Euro 951 million) recorded for the comparable period, despite the decline in revenue.
Debt further reduced - workforce reduction on schedule
Financial liabilities were decreased as planned in 1998. On a comparable basis (without companies consolidated for the first time after 1996), they amounted to some DM 77.4 billion / Euro 39.3 billion at year's end. This is a reduction of about 10 percent over the same time last year. In the first half of 1999, debt was reduced by another Euro 1.9 billion. Thus, substantially more than two-thirds of the approximately DM 60 billion debt reduction planned up to the year 2000 has already been achieved.
The Group's workforce continued to decline. At the end of 1998, there were 179,500 employees. This represents a reduction of some 11,500 positions compared to the end of 1997. By mid-1999, another 4,400 positions had been eliminated. Right now it looks like Deutsche Telekom will achieve its goal of reducing staff levels to 170,000 by the year 2000 ahead of schedule. In this way, Deutsche Telekom is improving the productivity of its personnel, which increased some 9.4 percent to DM 362,000 in revenue per employee in the 1998 financial year.
September 1999 |
