Businessmodel of Deutsche Telekom

Customer Segments

Deutsche Telekom continuously strives to connect people all over the world with their loved ones to share the most beautiful moments of their life. The company targets both individuals and businesses who seek to establish connections with others.

Value Proposition

Deutsche Telekom primarily focuses on innovation, accessibility, and customer relations when it comes to value proposition.

The organization takes great pride in being one of the market leaders in the world of telecom, being number one in Germany. Ever since its inception, Deutsche Telekom was always looking to cutting-edge telephony technologies. Working with the likes of Alexander Graham Bell in the 19th century set the precedence for long-distance telecommunications. Starting in Germany, the technology and reach of Deutsche Telekom extended to the rest of Europe and eventually extended to other continents. This is only possible with the large investments made in research and development as well as the firm working with partners to always find the next best technology.

Deutsche Telekom once had only a few thousand telephone customers in Berlin in the late 1800s, and now it has well over 100 million subscribers all around the world. The organizations seeks to provide service to every single individual on the planet, by acquiring software firms to help create the future world of “connected work and life.” They also work with other software and hardware companies to help realize the interconnected world of the future. Collaborating with the right organizations leads to growth and accessibility, helping people to connect in even the most remote locations.

In addition to providing quality service to their clients, the organization maintains continuous support by always being available to answer any questions and solve any problems. The company strives to ensure that all customers are always receiving a proper network connection in their area. In case of any issues, no matter how big or small, the technical support team is ready to follow up and remedy the situation. Deutsche Telekom has consistently ranked as one of the top telecommunications companies because the company provides grade-A customer service at all times anywhere in the world.

Channels

Deutsche Telekom has a long-standing distribution channel that includes wholesalers, retailers, and distributors. The company has both direct and indirect channels of distributing its good and services. Its own retail stores located all over the world sell products bearing the brand name. Deutsche Telekom also utilizes partner channels to collaborate with other companies to sell its product and service.

The company has implemented an improved online marketing strategy to couple with its already strong non-digital counterpart. Using techniques such as search engine marketing and social media marketing, the firm is tapping into the digital youth, generation Y, millennials, and other tech savvy individuals. By marketing their services with top-of-the-line smartphone brands in the industry, Deutsche Telekom is able to provide topnotch services to customers in all fields, private individuals and business concerns.

Customer Relationships

Deutsche Telekom is a telecommunications company providing communications services for the customers. As a result, there is a highly qualified technical support team in place to take care of any issues. If customers seem to be experiencing a failure in the network or any other service being offered, they can call the support line and talk to an experienced professional to receive aid in solving their problem. The company offers an online portal where anybody can file a complaint with their service and their team will get back to the customer as soon as possible for a one-on-one conversation.

In addition to help services available online and over the phone, the company knows that the best way to establish a strong presence and communication with customers is to have customer care points in cities where services are being offered. Subscribers can drop by the customer care center and talk to a member of tech support face-to-face and explain their problem, whether it be a hardware or software related issue. To provide continuous support to customers shows Telecom’s commitment and dedication to their customer base.

Key Activities

The business model of Deutsche Telekom involves establishing new international standards and to promote and facilitate the sustainable development of environment and society. Climate change, inequality, and a lack of media skills are some of the major challenged faced by modern society. New information and communication technologies can help master these obstacles. To reach this end, the organization is taking four key steps to be a pioneer in communications technology. This helps keep the stakeholders of the firm interested in corporate social responsibility while the company is simultaneously able to make a mark in history in telecommunications.

• Integrated IP Networks: Deutsche Telekom intends to offer its customers the best network and the fastest connections at all times. The Group is working on shifting from a fixed-network infrastructure to an all IP technology. The transition is expected to take place by the end of 2018. By the end of 2017, Deutsche Telekom plans to offer its customers in Europe LTE network coverage of at least 50%.
• Best Customer Experience: Deutsche Telekom understands that customer loyalty and satisfaction ensure the position of market leader and to that end, the firm is improving the service and network quality and ensure reliable and easy to use products and services. The intention is to make service simpler and faster and to ensure a seamless experience for the customer.
• Win with Partners: According to CEO Tim Höttges, “We build standardized platforms – imagine a power strip where partners simply plug in their devices.” Deutsche Telekom wants to collaborate with partners to create innovate products and services. A simplified network infrastructure is being built to allow products from partners to integrate to this platform. Deutsche Telekom is currently doing with partners like Spotify and Evernote, big names in the industry.
• Lead the Business: Deutsche Telekom has high expectations of its business customers unit and the company intends to profit more from growth in IT solutions for the SME sector in Germany. The Group is focusing on cloud services, security services, convergent mobile and fixed-network products, and solutions for virtual collaboration. ### Key Partners

“Win with Partners” is one of the four key elements of Deutsche Telekom’s strategy. This highlights the importance of cooperation for the organizations future success. The company continues to develop its own ideas but it is always open to concepts from other groups and it is increasingly emphasizing the significance of collaborations. From large corporations to small startups, anybody can become a partner on equal terms with Deutsche Telekom.

Partnerships help Deutsche Telekom to set itself apart from the competition. The best networks and services are the foundation for their continued success with customers. Deutsche Telekom works closely together with people in Silicon Valley, Germany, and other tech and innovation hubs.

Their large-scale partners include the likes of Amazon, SAP, Cisco, Apple, Samsung, and Microsoft, just to name a few. Deutsche Telekom has also supported a number of startup companies because the organization realizes that by helping others achieve their goals, everybody can live in a better society.

Key Resources

People are the reason why Deutsche Telekom is as successful as it is today. The company owes all of its success to the amazing personnel they have cultivated with the quality mentorship and leadership programs. With well over 200,000 employees in multiple locations around the globe, Deutsche Telekom has a varied team of sales and marketing staff in addition to excellent engineers and researchers who are always developing new technologies to advance communications.

Being a telecommunications company, research and development is the prime element of Deutsche Telekom and it has brought much success to the company. The scientists, engineers, and researchers employed at Deutsche Telekom are always innovating, thinking of a new idea on a consistent basis. The company has filed for a patent every week for several decades now. To maintain the market leader status, the Group must always ensure Intellectual Property Rights are sustained and the inventions are protected by law. This guarantees that the products are unique and cannot be copied by the competitors.

The technically gifted individuals make the company what it is today, but there needs to be infrastructure to make it all happen. Deutsche Telekom has an extensive system of manufacturing plants and telecommunication towers in the operating zones to provide sustained network coverage. With state-of-the-art laboratories and modern equipment, the engineers are able to create, innovate, test, and implement. This is a necessary business function and keeps the business in prime position.

Cost Structure

In order to create all of the goods and services Deutsche Telekom is renowned for, the company has a highly detailed cost structure to ensure that losses are not incurred. Deutsche Telekom continuously revises the costs involved in marketing and sales, research and development, and product development and manufacturing.

By finding ways to minimize inefficiency and raise productivity, the costs can be lowered and profit margins can be increased. The strategic development leading to continuous improvements in the cost structure and a more integrated structure are the pillars for the company’s long-term business success. Deutsche Telekom Group’s Save for Service program is continuing to improve cost structures.

Revenue Streams

In the year 2015, Deutsche Telekom had a revenue of € 69.2 billion globally from all of their divisions present in all markets of operation. The Deutsche Telekom Group has 156.4 million mobile customers, 25 million fixed-network lines, and 17.8 million broadband lines. The table below provides details of each of the geographic business segments.

Business Segment Revenue (billions in €) Mobile Customers (millions) Fixed-network Lines (millions) Broadband Lines (millions) Employees Germany 22.4 40.4 20.2 12.6 110,354 Europe 12.7 52.2 8.7 5.2 49,638 USA 32 63.3 N/A N/A 44,229 The fourth business segment, T-Systems, offers IT and telecommunications services in all industries, e.g. automotive, finance, transport, and retails sectors. It is a pioneer in cloud computing for corporate customers and private individuals. It enjoyed a revenue of €8.6 billion in 2015 and has 46,000 employees.

With 156 million mobile customers, 29 million fixed-network customers, and 18 million broadband customers, a significantly vast majority of the revenue comes from mobile and landline phone as well as internet services. Furthermore, there are approximately 6.6 million TV customers, a high percentage of which are in Germany, so there is another source of revenue from entertainment TV subscribers.