Telekom delivers digitalization Made in Germany

Deutsche Telekom will accelerate the digitalization of business. Within Telekom Deutschland (TDG), the Group is creating a new business area for end-to-end digital solutions and platforms in the growth market for digital experience services.

At the same time, T-Systems – the IT division for corporate customers – is positioning itself within the Group as a vertically focused IT service provider for advisory services, cloud services and digital solutions, with security built-in.

Bundled offerings of connectivity, data and applications for end-to-end digital customer experiences promise Telekom further growth, with digitalization “Made in Germany”.

"The digital world is changing. Telecommunications companies that have not nurtured their digital skills have fallen behind in the B2B market. We believe in digitalization 'Made in Germany'," said Timotheus Höttges, CEO of Deutsche Telekom.

New area for digital customer experiences

In the Mittelstand and across German industry, there is extensive appetite for digitalization. Telekom Deutschland is uniquely positioned to meet this demand. Delivering this involves a combination of core connectivity and near-to-connectivity platforms that are fundamental to digitalization, e.g. IoT, security etc. Software skills to integrate these platforms into the core of customers’ operational systems complete this offering.

The new unit within TDG brings this to the market as a compelling, one-stop shop for digitalization. It will initially focus on the German SME sector, but connectivity and near-to-connectivity platforms are scalable for a wide range of customers and, importantly, geographies, e.g. wider EU and US.

With the founding of this new business area, T-Systems will transfer its digital subsidiary T-Systems MMS to the Group from 2023, strengthening the new unit. MMS is an independent company and will in future be managed by TDG. It is one of the leading providers of digital experience services in Germany. Its approximately 1,700 digital experts contribute their know-how to the development and implementation of digital strategies for business and the public sector. Thus, MMS will support the implementation of the Group’s “Journey to Digital” strategy. Cooperation between MMS and T-Systems customers is to continue unchanged.

In addition, Telekom is ensuring growth and global scale for the new business segment, with technology investments and strategic partnerships. Acquisitions are also on the agenda.

T-Systems at the core of the digital strategy

Telekom is positioning its corporate customer arm T-Systems at the core of its digital strategy. T-Systems generates annual revenues of circa 4 billion euros. The lion's share is distributed between the two future-oriented business areas of cloud services and digital solutions, at around 85 percent. Advisory services is another key differentiating capability, supporting clients in the development of their digital strategies. Security is built into every offering.

Under the T-Systems brand umbrella, portfolio units will be set-up in an entrepreneurial way, to fully exploit their business potential. The units are focused on scaling their businesses, addressing inefficiencies, and accelerating growth. T-Systems is also set to place more focus on partnerships, with particular focus on scaling near-shore and off-shore capabilities.

To support T-Systems’ new entrepreneurial set-up, the Group is removing historical burdens to facilitate the company’s progress. In this way, Telekom is affording its corporate customer arm more leeway for investments. At the same time, Telekom is making T-Systems a preferred partner for the Group's own digitalization.

Transformation laid the foundation

T-Systems laid the foundation for its new positioning with its transformation over the past five years. During this time, T-Systems has developed from an outsourcing specialist into a leading IT Service provider with a focus on selected industries, specific markets, and vertical portfolio offerings.

The segment focuses on digitalization solutions, multi-cloud, and advisory services. Security and sovereignty are key differentiators for the company and are built into every offering. T-Systems is the largest IT provider in German-speaking Europe. The company is a market leader for industries such as automotive, healthcare, public transportation, distribution, and logistics, as well as the public sector.