Deutsche Telecom aims to double revenue from mobile data, TV and intelligent networks

Mobile data traffic, television and intelligent networks will provide the richest opportunities for revenue growth, says Deutsche Telekom CEO René Obermann

Mobile data traffic, television and intelligent networks will provide the richest opportunities for revenue growth, says Deutsche Telekom CEO René Obermann, who is restructuring the German telco's business to double revenues from these sectors.

Obermann said Deutsche Telekom would invest €10bn in intelligent networks and its portfolio of IT, internet and network services over the next three years.

He expected to double revenues from these sectors to almost €30bn by 2015. €10bn would come from mobile data traffic, €1bn from intelligent networks for the energy, healthcare, media, and automotive sectors, €7bn from TV programming, €3bn from internet downloads, €8bn from cloud computing and €1bn from smart energy meters.

Obermann said T-Mobile USA would have around 185 million points of presence (POPs) with HSPA+ by end of 2010. It would double the number of 3G smartphones in the network to around eight million, he said.

Obermann planned to turn T-Systems, Deutsche Telekom's IT arm, into an international supplier of cloud computing for energy, healthcare, media distribution, and automotive companies, all of which had to develop new business models, he said.

Obermann said two things were important to Deutsche Telekom: a high-margin core business and the courage to focus on promising growth areas. "Nowadays, promising strategies must have more than one focus," he said.

The aim was to leverage its investments in broadband infrastructure more effectively. "Our goal is to expand our important business with fast connections by adding a broad portfolio of IT and internet services. This will ensure our long-term growth," Obermann said.

Between now and 2012 Deutsche Telekom plans to invest €10bn in fibre optics, new mobile communications technologies, and IT processes, he said. It will also invest in other European markets.

These would pave the way to a "gigabit society" in Germany and other countries and create jobs, Obermann said.

Deutsche Telekom's traditional telephone business is worth more than €200bn a year, which it will defend as it goes after higher-margin business, he said.

"The aim of our strategy is to expand Deutsche Telekom along the entire value chain and position the company as an open partner for other sectors, such as energy, software or the media," said Obermann.

He said the strategy would lead to the connection of up to 10%, or four million, homes in Germany with fibre. Deutsche Telekom will also upgrade its mobile network with high-speed HSPA+ technology and the faster IP-based LTE if regulators award the necessary radio frequencies.

Given a suitable regulatory framework and cooperation models for network expansion, Germany could have the most modern infrastructure in Europe, he said.

Obermann plans to grow free cash flow from around €6.2bn in 2010 and return on capital employed (ROCE) by at least 1.5%.

He expects to deliver dividends worth €3.4bn over the next three years.

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