Deutsche Telekom unveiled at its investor day a number of new financial targets and focus areas for accelerating growth. To offset the steady decline in fixed and mobile voice revenues, the German operator plans to focus on driving growth from broadband, TV and IT services. The group outlined five growth areas in particular.
The first is mobile data services, where the company targets an increase in revenues from just under EUR 4 billion in 2009 to around EUR 6 billion in 2012 and approximately EUR 10 billion in 2015. This will be supported by the roll-out of HSPA+ in Germany, and LTE if the operator wins frequencies in the upcoming auction. At T-Mobile USA, HSPA+ should be available to around 180 million people by the end of this year, while the number of 3G smartphones doubles to 8 million. The US operator will target a 60 percent reduction in the gap in data ARPU with its rivals by 2012, and over half the handsets on its network should be smartphones by the same date.
The second growth area is online consumer services, such as Scout24 family, Musicload, Videoload, Softwareload and Gamesload. Revenues from these should grow from EUR 0.8 billion last year to EUR 2-3 billion by 2015.
Third is the connected home, offering consumers universal, secure access to content and services across all screens. Revenues in this area, including broadband access, are expected to increase from EUR 5 billion last year to around EUR 7 billion in 2015.
The fourth growth area is T-Systems. Targeting areas such as dynamic services and cloud computing, the ICT services arm should increase revenues outside the group to EUR 8 billion by 2015, from EUR 2 billion last year.
The final growth area is "intelligent network services". These include third-party applications facilitated by Deutsche Telekom's networks and services, such as telemedicine, vehicle telematics, and energy meters. Deutsche Telekom aims to generate total revenue of around EUR 1 billion in this area by 2015.
The presentation also outlined plans for network investment in Germany, where the company plans to invest EUR 10 billion between 2010 and 2012 in fibre optics, new mobile communications technologies, and IT processes. DT said current capex plans provide for covering 10 percent of fixed-line homes in Germany with FTTH by the end of 2012.
Finally the group gave a number of financial targets. The company confirmed its outlook for 2010 results, for a decline in adjusted EBITDA to around EUR 20 billion and free cash flow of EUR 6.2 billion. In Germany, DT aims to stop the decline in revenues by 2012 at the latest, while T-Mobile USA is expected to increase its EBITDA margin to over 35 percent by 2012, from 31 percent in 2009. For the entire group, DT targets a return to growth in free cash flow and a 150 basis point increase in the return on capital employed by 2012. Customers numbers are expected to reach 5.5-6.0 million TV users by 2012, including possible expansion in Europe, and over 140 million mobile subscribers and 18 million retail fixed broadband users by the same date.
