Deutsche Telekom AG · XETR:DTE

Deutsche Telekom — Investor Day (March 2010)

32 slides from Deutsche Telekom's investor day presentation, Mar 18, 2010

  1. Slide 1: Deutsche Telekom Investor Day. Southern & Eastern Europe.

    Deutsche Telekom Investor Day. Southern & Eastern Europe. March 18, 2010 Guido Kerkhoff 1

  2. Slide 2: Disclaimer

    Disclaimer. This presentation contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. These forward-looking statements include statements with regard to the expected development of revenue, earnings, profits from operations, de

  3. Slide 3: Impressive footprint in Southern and Eastern Europe

    Impressive footprint in Southern and Eastern Europe. 12 No No Slovakia The Region 11 Hungary No No Top Market Position  9 countries  Population of > 65 mn 11 Croatia No No Romania 13 No No Fixed: 7 x No 1 Mobile: 6 x No 1 2 x No 2 1 x No 3 Serbia Bosnia and Financials 2009 11 2 Herzegovina No Cust

  4. Slide 4: Strong market position translating into high profitability

    Strong market position translating into high profitability. Revenue Telco market (organic) SEE EBITDA core market Telco market revenue (organic) (organic) 2008 x% DT market share 2009e 2008 2009ex% Average DT Marketshare by share country 2009e 38% 40% 38% 41% MOBILE Market Total Telco Market 50% 51%

  5. Slide 5: Content

    Content. SEE Macroeconomics/ SEE’s Strategy Country-by-Country competitive situation Implementation Program overview 5

  6. Slide 6: Macroeconomic Situation

    Macroeconomic Situation. GDP Growth 2005-20091 Organic revenues 2007-20092 8 Avrg. Growth 10.8 10.9 10.5 2008: +3% 4 +0.6%2 -3.8%2 0 2005 2006 2007 2008 2009 8pp -4 2007 2008 2009 Bulgaria Hungary Slovakia Avrg. Growth Greece Romania Croatia 2009: -5%  2008: Stable revenues in times of growth  200

  7. Slide 7: Challenges through fierce competition in different areas

    Challenges through fierce competition in different areas. TV players offering Slovakia voice and broadband Aggressive regional Aggressive 3play offers 4play offer Hungary Romania Croatia Bosnia and Prepay price Herzegovina Serbia competition Bulgaria Monte- negro Kosovo FYR Discount provider Macedon

  8. Slide 8: Content

    Content. SEE Macroeconomics/ SEE’s Strategy Country-by-Country competitive situation Implementation Program overview 8

  9. Slide 9: SEE's Fix – Transform – Innovate strategy implementation program

    SEE’s Fix – Transform – Innovate strategy implementation program. TRANSFORM INNOVATE Build networks and Strategy Leverage One Company Connected Life across Connected Work with DTAG processes for in integrated assets all screens unique ICT solutions the Gigabit Society 1 Customer life time value 5 Op

  10. Slide 10: SEE's Fix – Transform – Innovate strategy implementation program

    SEE’s Fix – Transform – Innovate strategy implementation program. TRANSFORM INNOVATE Build networks and Strategy Leverage One Company Connected Life across Connected Work with DTAG processes for in integrated assets all screens unique ICT solutions the Gigabit Society 1 Customer life time value 5 Op

  11. Slide 11: Integration nearly completed in SEE ex OTE subsidiaries

    Integration nearly completed in SEE ex OTE subsidiaries. New integrated structure Hungary Fixed Business Mobile Business March 2006 Sales:  Integrated own shop network Montenegro  Systematic development of an integrated online platform May 2009 Customer Service  Operational excellence in customer

  12. Slide 12: SEE's Fix – Transform – Innovate strategy implementation program

    SEE’s Fix – Transform – Innovate strategy implementation program. TRANSFORM INNOVATE Build networks and Strategy Leverage One Company Connected Life across Connected Work with DTAG processes for in integrated assets all screens unique ICT solutions the Gigabit Society 1 Customer life time value 5 Op

  13. Slide 13: Save4Service@SEE: Reduction of SEE cost base by € -0.3 bn

    Save4Service@SEE: Reduction of SEE cost base by € -0.3 bn. OPEX SEE 2010-2012 Measures (bn €)  Adjusted net savings: €0.3 bn1 6.4*  Gross savings volume: €0.5 bn -0.31  Bundling of regional efficiency initiatives in 3 overarching program streams 6.1  Sales/marketing/channel mix (25%)  Network/I

  14. Slide 14: Measures identified in three areas of focus

    Measures identified in three areas of focus. Sales/Marketing/Channel mix Network Techn./IT/Field Service End2End–Processes & other  Consolidation of shop presence  Field technicians – optimization of field  Focus on roll-out e-Bill  Enhance role of procurement to work force & variable salaries 

  15. Slide 15: SEE's Fix – Transform – Innovate strategy implementation program

    SEE’s Fix – Transform – Innovate strategy implementation program. TRANSFORM INNOVATE Build networks and Strategy Leverage One Company Connected Life across Connected Work with DTAG processes for in integrated assets all screens unique ICT solutions the Gigabit Society 1 Customer life time value 5 Op

  16. Slide 16: Fiber rollout: more than 500,000 homes passed

    Fiber rollout: more than 500,000 homes passed. Slovakia  Fiber coverage 315,000 homes  DSL coverage > 60% of homes Croatia Hungary  Fiber rollout started in 2009  Fiber coverage 170,000 homes  DSL coverage > 95% of homes  DSL coverage > 80% of homes Montenegro Romania  Fiber rollout started e

  17. Slide 17: Mobile broadband development in SEE

    Mobile broadband development in SEE. Recent 3G Network Next Generation Mobile Network DT’s 3G coverage* Drivers 1) Demand Greece > 87%  Rapidly growing demand for mobile data Hungary > 55%  Increase speed & capacity with NGMN Croatia > 57% 2) Competitiveness  Drastic cost-performance ratio improv

  18. Slide 18: SEE's Fix – Transform – Innovate strategy implementation program

    SEE’s Fix – Transform – Innovate strategy implementation program. TRANSFORM INNOVATE Build networks and Strategy Leverage One Company Connected Life across Connected Work with DTAG processes for in integrated assets all screens unique ICT solutions the Gigabit Society 1 Customer life time value 5 Op

  19. Slide 19: To compete effectively in the future, TV is a must have

    To compete effectively in the future, TV is a must have. Competitive Dynamics Fixed/mobile voice Fixed/mobile BB Pay TV Market position Telcos of operators ISPs Cable TV/ Other cable Demand Low willingness to pay for drivers High willingness to pay for 19

  20. Slide 20: Positive impact of TV: case study Hungary

    Positive impact of TV: case study Hungary. Strong Growth Momentum TV Key for Upselling and Retention Customer in thousand 900  Customer growth: 850 Captured # 2 market position. 800 -8%  Upselling into bundles: 750 More than 2/3 of TV customers subscribe for at least 700 650 one other service. +38

  21. Slide 21: Significant differences in proposition maturity and access technology

    Significant differences in proposition maturity and access technology. SEE footprint TV Penetration* Market Shares* Customers HR 40% 36% HR 236 242 6 CG 56% 26% CG 30 HU 85% 25% HU 156 407 631 68 RO 79% 15% RO 884 911 27 SK 62% 5% SK 62 GR 14% 4% GR 16 MK 31% 2% MK 14 in thousand, YE09 IPTV Sat Cabl

  22. Slide 22: With IPTV and Satellite, DT Group offers digital TV everywhere

    With IPTV, and Satellite, DT Group offers digital TV everywhere. Case study: Magio TV in Slovakia. Fiber: € 22 DSL: € 12 + € 7.95 DSL: € 12 + € 7.95 € 7.95 Fiber or ADSL2+/VDSL: IPTV ADSL: Hybrid Satellite No Broadband: Satellite  Streamed VoD  PC/Mobile remote control  Interactive Magio Portal (

  23. Slide 23: Large – and growing: DT Group TV business in SEE

    Large – and growing: DT Group TV business in SEE. TV customer growth (thsd.) – 2009 TV revenue1 targets (€ mn) > 3,000 CAGR 60% 2009-12 1,906 36% 425 1,297 94% ~ 500 IPTV 219 1,041 SAT 649 60% ~ 200 Cable 429 +3% 440 ~130 YE 2008 YE 2009 YE 2012 2008 2009 2012 1) Total TV revenues, IPTV mainly incl.

  24. Slide 24: Slovakia/Hungary case study: Sat cooperation leveraging significant synergies

    Slovakia/Hungary case study: Sat cooperation leveraging significant synergies. Synergy Potential Impact  Sat bandwith cost savings of approximately 30% Lower number of satellites  Slovak Telekom to outsource Head End operations to Magyar Telekom (1 operation) 1 Head Uplink for 2 countries  Econom

  25. Slide 25: Content

    Content. SEE Macroeconomics/ SEE’s Strategy Country-by-Country competitive situation Implementation Program overview 25

  26. Slide 26: Greece

    Greece. Strategic focus 2010 to 2012 Highlights 2009  Efficiency: realize DTAG synergies with SEE Strategy Implementation Program Fixed broadband access lines retail and increase profitability in line with S4S +23% 1.1 m  TV: Push via DSL and satellite to retain telco customers and create new 0.9

  27. Slide 27: Romania

    Romania. Strategic focus 2010 to 2012 Highlights 2009  Efficiency: realize DTAG synergies with SEE Strategy Implementation Program Fixed broadband access lines retail and increase profitability in line with S4S and maximize synergies from Zapp +19% 0.8 m acquisition 0.7 m  Mobile broadband: utiliz

  28. Slide 28: OTE Synergies 2009 – Overachievement on run rate

    OTE Synergies 2009 –Overachievement on run rate driven by Procurement & Terminals. Synergies Net Effect and achieved Run Rate in € m 105  Cosmote: Synergies 60% in CAPEX & 40% 75 in OPEX OPEX 37%  OTE fixed-line: Synergies nearly 100% in CAPEX 63% CAPEX Net Effect Run rate achieved realized 20091

  29. Slide 29: Hungary

    Hungary. Strategic focus 2010 to 2012 Highlights 2009  Efficiency: realize DTAG synergies with SEE Strategy Implementation Program TV customers and increase profitability in line with S4S +38% 631k  TV: Push access agnostic TV offering with consistent user interface and 457k platform across three

  30. Slide 30: Croatia

    Croatia. Strategic focus 2010 to 2012 Highlights 2009  Efficiency: realize DTAG synergies with SEE Strategy Implementation Program TV customers 242k and increase profitability in line with S4S +72%  Bundles: introduce bundles containing fixed and mobile components 141k  Fixed: expand in broadband

  31. Slide 31: Slovakia

    Slovakia. Strategic focus 2010 to 2012 Highlights 2009  Efficiency: realize DTAG synergies with SEE Strategy Implementation Program TV customers +75% 63k and increase profitability in line with S4S  One Company: Integration of Slovak Telekom and T-Mobile Slovensko in 36k July 2010  Bundles: intro

  32. Slide 32: Country specific strategies reflected in the ambitions

    Country specific strategies reflected in the ambitions. 2009 Ambition level 2012 Market Market share service revenues 51% stable shares1 Market share EBITDA 55% stable OPEX OPEX €6.4 bn2 €0.3 bn net savings TV revenues3 around €200 mn around €500 mn TV TV customers YE 1.9 mn > 3.0 mn 1) Total telco

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