deutsche telekom ag corporate innovation

===!"§Deutsche Telekom

Deutsche Telekom AGCorporateInnovation

Deutsche Telekom Key Note TeleSoft EcoSystem MeetingDr. Heinrich M. Arnold Vice President, Deutsche Telekom, Head of New Products and Services LaboratoryOctober 29, 2004

Agenda

Deutsche Telekom

Corporate Innovation at Deutsche

Telekom

Venture Capital Partnering as a Driver

for Innovation

Deutsche Telekom

4 Business Divisions:

T-COM: Fixed line communication

T-MOBILE:Mobile communication

T-SYSTEMS: Systems integration, Outsourcing, IT-Services

T-ONLINE:ISP, portal services

Facts & figures (2003)

Revenue: 55.8 Billion Euro

EBITDA: 18.5 Billion Euro

Employees: 251 000

Phone lines: 57.9 Million

Mob. Subs.: 66.2 Million

One of the leading telecommunications operators worldwide.

Become leading connectivityprovider of fixed and mobilebroadband services

Integrated telecommuni-cations operator

Corporate initiativesPerfectly positioned to generate future growth.

Innovation

Quality

Efficiency

Agenda

Deutsche Telekom


Telekom


for Innovation

Business impact of innovationCost savings, enhanced and new business define requirements for innovation in an increasingly competitive market.

Today‘s Business

EBIT

Market Internet

telephony Fixed/mobile

substitution Saturation

New Competition Device

manufacturers Service

solutions embedded in devices

Alternative operators

Google, Ebay…

Enhanced Business

Increasing quality and adoption of existing services by enhancing usability and seamlessness

New Business

The cost to performance ratio of the production platform has to be optimised continuously

Enable new products and services to better satisfy individual customer requirements

Threats

Cost saving

sOrganic growth (number of Subscribers and ARPU) is slowing down.

Defining the focusDT’s view on innovation is based on “4 Is”: intuitive usability, integrated communication, intelligent access, and infrastructure development.

Develop Early Recommendations to Enable

Future BusinessExamples: DSM and WiMAX to

complement DSL Methods for Cost-efficient

network-enhancement Federated ID-Management

required Full Seamlessness between

networks Intelligent profiling across

applications

Derive Corporate R&D-Portfolio

Enhanced User-interfaces Pervasive Communication Multi-Access Service

Framework Tracking & Tracing Overarching AAA Broadband Wireless Access NGN / GSN

Integrated Communicat

ion Innovation Activities in and across Divisions

IntuitiveUsability

Infrastructure

Development

IntelligentAccess

Focus of strategic development

Emerging Technologies; Architectures and Services; Next Generation Packet

Interconnection

Machine-2-Machine Communication; Security; Personal Communication Assistant;

“Information Tags”

Automatic Equipment Recognition; Smart Devices; Future Comm. Environments

Emerging Technologies and Architectures; Applications & Business Models for WiMAX;

DxB; Broadband Mobility

“Always Best Located” Scenarios; Evaluation of T&T Technologies

Value/New Business of MASF; Local networking technologies; Content Adaptation

Value and New Business of Overarching Solutions; Relevant Biometrical Technologies;

AAA SolutionsOverarching AAA

Enhanced User Interfaces

Multi-Access Service Framework

Broadband Wireless Access

Tracking and Tracing

Pervasive Communication

Next-Generation-Networks/GSN

Project Fields

Perm

an

en

t m

on

itori

ng

an

d

up

dati

ng

Currently relevant topics

Derived from innovation strategy, current focus is on 7 project fields.

MASF-Demonstrator, T-Box,

Content Post Production

VoiceIdent; ID & Role Management

BroadWave; CorWin

Permission Tracking & Tracing

Ongoing projects

Customer Care Automation;Future User Interfaces

GSN+

RFID Business Models

Stakeholders in innovation

Technology & Platforms (ZB TP)

DivisionsT-Venture

Applications/ Products/Services

Process-supportingIT platforms

Network & IT platform technology (including OSS)

Evaluation (projects/pilots)

Introduction/ deployment

Operations

"Run" "Build" "Plan"

Early technologies/ future business models

Innovation Management (ZB I)

Corporate units and divisions have complementary responsibilities.

Agenda

Deutsche Telekom


Telekom


for Innovation

Service provider and precursor for innovation transfer. T-Venture‘s role in DT‘s innovation

Investment strategies as platforms for ongoing fund business - definition of investment areas based on defined market segments

Focus on innovation - leveraging operational business through venture investments into defined investment areas to

support growth strategies of Deutsche Telekom‘s Business Units

facilitate and leverage innovation transfer for Central Unit Innovation (Corporate Development) through corporate fund

Complement and enhance Business Unit‘s view through pro-active scouting

Continuous stimulation – new investment areas/opportunities

ServiceProvider

Precursor

Corporate VC fund on top of four existing divisional funds to support corporate innovation activities

Access to innovation activities in start-up companies in relevant areas of technology

Optimal usage of T-Venture´s presence in USA

Active partnering with a strong and well networked VC in Silicon

Valley

Leveraging the corporate fund Corporate innovation activities to be supported by VC

Selection process started in April 2003

10 candidates addressed by T-VoA, all showed initial interest

Intensive talks with all candidates about mutual benefits as well as strategic directions

3 VC firms considered "First Cut"

3 VC firms considered "worthwhile to continue talks"

4 VC firms considered as "not the right partner" for T-VoA

Requirements for corporate fund

Telesoft is by far the most promising partner:

Excellent performance

Investment portfolio so far has ideal focus

Telesoft’s future plans are ideal complement and can be supported by T-Venture

Telesoft offers excellent value for Corporate Fund investment

Telesoft shows high interest to partner with T-Venture

Selecting the right partnerTeleSoft emerged as the partner of choice after thorough due diligence with two candidates.

Driving the partnership:

T-VoA‘s investment director works out of Telesoft‘s office in San Mateo

T-Venture‘s investment director for the corporate fund is well connected into the corporate R&D activities

deutsche telekom ag corporate innovation

Documents