Telefónica Deutschland corporate strategy

Vision: By 2022, we will be the 'Mobile Customer & Digital Champion'

At Telefónica, we believe that it is people who give meaning to technology. That is why the customer is at the heart of what we do. Today, we are already connecting more people with mobile service than any other network operator in Germany. We have a direct customer relationship with more than 80% of our customers. This means that our customers are our largest potential for new growth.
After completing the integration, we will therefore put a vigorously greater focus on benefits to customers than ever before in our activities. We have defined a clear vision for this:
'We want to become the "Mobile Customer & Digital Champion"'
That means: we want to be the best partner for mobile customers in the German market. In order to achieve this, we are making our customers’ lives easier and better, and providing them with mobile freedom in the digital world.
We want to offer our customers a thoroughly positive experience with the brand, the products, the customer service, and the network. The daily user experience with Telefónica Deutschland should leave our customers impressed by its simplicity, speed and what it offers. To achieve this, we want to know our customers' wishes and needs even better, respond to them in real time and develop suitable products and services. First, we will use our multi-brand and omnichannel distribution approach to set the standard in the market. Second, we are increasingly interacting digitally with our customers, as we regard ourselves as pioneers of digitalisation. We also set great store by enabling our customers to shape their digital lives as they choose.

Growth potential on the market

The trend towards more data usage and more devices opens up great growth opportunities for us. Currently, mobile data usage in Germany is growing exponentially. People are increasingly streaming music and videos on the go. However, compared to the rest of Europe, data usage in Germany is still in its infancy. Additionally, the number of devices and sensors that are connected to the network via mobile service will further increase. At the same time, large quantities of data are generated, the analysis of which creates significant added value for the economy and society. We want to shape these market developments and utilise the resulting growth potential.

Our strategy: we are reinforcing our foundation, digitalising our business and improving the customer experience in order to boost growth and profitability

Unternehmenszentrale in München
In the past year, we have defined three strategic priorities to realise our vision of becoming 'Mobile Customer & Digital Champion': our foundation, customer experience and digitalisation, as well as growth and profitability. In the years to come, these will determine our activities. Firstly, we are reinforcing our foundation: excellent customer service, stable IT systems, an effective organisation, as well as appropriate regulatory framework conditions are the bases for a positive user experience and future growth. Our second priority is the improvement of the customer experience in the digital age. This begins with the provision of an improved, faster and more powerful network that satisfies the demands of its users in every situation. Building on this, we are providing a convincing product and service offering that is tailored to the customer and his or her digital everyday life. Finally, we are extensively digitalising our company in order to also improve the customer experience through those means. To this end, we have set up our transformation program 'Digital4Growth'. In this way, our customers will see us as simpler, faster and better.
-Simpler, because we make the interaction easier for our customers and more intuitive, and enable a uniform experience across our channels.
-Faster, because we react to customer needs and market changes in real time.
-Better, because we provide a positive customer experience across all our channels and expand data-based growth fields.
We will achieve our third priority through the successful implementation of the first two: by differentiating the customer experience, we are creating the prerequisites for growth and profitability. We are therefore enabling all our stakeholders – employees, customers, and shareholders – to participate in our success. Through positive customer experience, we are stimulating revenue growth in order to grow with the German market and increase our profitability (OIBDA). We are investing intelligently in our network as well as in the transformation, thereby keeping the volume of investments stable. The transformation into a digital company will enable us to constantly increase efficiency so that we can continuously reduce our operating costs. At the same time, we are tapping into new revenue potential, including the Internet of Things. The revenue growth will support the development of a solid free cash flow, so that we can also maintain an attractive dividend policy and remain a highly attractive investment for our shareholders.

Progress with priorities

In the past year, we already made significant progress with the priorities mentioned. Details are available in our annual report.

The Telefónica Group global strategy programme: #RECONNECT

We have put our path to becoming the ‘Mobile Customer & Digital Champion’ in concrete terms in the Telefónica Group global strategy programme: #RECONNECT. It puts the focus on both our customers and the relationship between people and technology. The elements of this programme support us in achieving the targets that we have set for our growth. #RECONNECT is the Telefónica Group growth formula: G = R4 × M The parameters R and M are defined as follows:
-RELEVANCE: We are providing our customers with the best digital experience, made possible by easy-to-handle, user-friendly and personalised technologies.
-REVENUES: We are improving customer loyalty and enthusiasm for our products and services. This enables us to unlock increasing revenue potential.
-RETURNS: We are focused on smart and efficient investments that meet the needs of our customers.
-RESPONSIBILITY: We are growing responsibly, boldly shaping regulation and providing value for society as a whole.
Above all this stands MOTIVATION: it is the key to all success and therefore acts as the multiplier of the formula’s four R’s. It stands for a mentality geared towards growth, an effective and agile organisation and dedicated employees.