SZ-Interview with Markus Haas in the edition from 12.11.2018
CEO Markus Haas spoke with Süddeutsche Zeitung about the next 5G wireless communications generation, areas without coverage, and the lack of a European digitalisation policy. This post contains excerpts of that interview. The full text appeared in the Süddeutsche Zeitung on 12 November 2018.[…]
Telefónica Deutschland is launching a partnership with vitroconnect GmbH. As a first step, Telefónica Deutschland will use the network-operator-independent platform of vitroconnect GmbH to gain access to EWE TEL GmbH’s access network. EWE TEL GmbH has a particularly strong presence in Lower Saxony, with high-performance broadband connections. With this partnership, Telefónica Deutschland is continuing to expand its position as a national fixed network provider in Germany and will be able to offer potential new customers fast VDSL connections of up to 100 Mbit/s in even more areas. It will also give many existing o2 DSL customers the option to switch to faster VDSL tariffs. The first customers have already been connected successfully.
We are currently having a lively debate, and rightly so, about the 5G frequency awards and the expansion of wireless networks in Germany. The demands for equal treatment of urban and rural areas are also legitimate. However, what matters is that we look very closely at needs, possibilities, and goals. Only if we carefully consider the frequency awards and infrastructure expansion, and provide a framework that promotes investment, can Germany be a global leader in 5G. Telefónica Deutschland is making a specific proposal for this.
Telefónica Deutschland continued the positive development of the first half of the year during the third quarter. Adjusted for special and regulatory effects, operating income before depreciation and amortisation (OIBDA) rose by 6 percent in the first nine months to EUR 1.42 billion. This was primarily due to synergies from the E-Plus merger and the continued positive development of the company’s mobile service revenue. Before regulatory effects, it increased by 0.5 percent year-on-year to EUR 3.97 billion. Overall, revenue remained stable. Mobile data consumption increased by half in the first nine months, mainly due to strong demand for O2 Free tariffs with large data volumes and the acquisition of 233,000 additional contract customers in the third quarter. Because of the positive business development and due to the faster-than-expected realization of synergies from network consolidation, the company is narrowing its outlook for 2018 and now expects a slightly positive development of adjusted OIBDA. In line with its dividend promise, Telefónica Deutschland is also proposing to increase shareholder remuneration for the current fiscal year by one cent to EUR 0.27 per share.
Telefónica Deutschland is consistently continuing the comprehensive expansion of its LTE network. In the third quarter of 2018 alone, Telefónica Deutschland installed nearly 2,000 new LTE stations and upgraded existing locations with additional LTE capacities. In total, the O2 network has already been expanded by around 5,000 LTE stations this year. By way of comparison, the area newly supplied with LTE is significantly larger than the federal state of Hesse. The company is thus fulfilling its announcement not only to further densify its LTE network in cities, but also to rapidly expand its LTE network in rural areas so that more and more customers can surf the O2 network in more and more locations at faster speeds.
In the course of digitization, companies are generating great amounts of data. At the same time, the importance of data protection is rising as a result of the EU General Data Protection Regulation (GDPR). This raises the question of how companies can use Big Data in a legally compliant manner and in the interests of their customers. Telefónica NEXT sees the anonymization of data as an opportunity for the data economy. Therefore, the corporate start-up developed a TÜV-certified anonymization process. Analyses from anonymized mobile network data currently support traffic planning in Germany among others. Telefónica NEXT now also offers this procedure to other companies for their data, for example from the banking or insurance sector.
Deutsche Telekom and Telefónica Deutschland are joining forces to accelerate the expansion of their mobile networks. The two companies have agreed to connect at least 5,000 Telefónica Deutschland mobile network sites in total to Telekom’s high-performance fibre-optic infrastructure in the long term. In turn, Deutsche Telekom can directly leverage the synergy effects from this to expand its own network. This cooperation is not just remarkable because of its size. It is also ground-breaking in terms of the future 5G communication standard and new digital applications.
In an interview with the German newspaper "Tagesspiegel", Telefónica Deutschland CEO Markus Haas talks about the challenges of the digital infrastructure in Germany as well as the planned allocation rules for the new mobile standard 5G.
Telefónica Deutschland has successfully implemented the voice standard Enhanced Voice Services (EVS) within its national LTE network. Technically speaking, the new voice standard is a further development of AMR-WB (Adaptive Multi-Rate Wideband): O2 customers in the LTE network can now make calls in excellent Full HD voice quality. With EVS, telephone calls are transmitted much more clearly and naturally than before – EVS transmits the audible frequency range at up to 16,000 Hertz instead of up to 7,000 Hertz as used to be the case. As a result, EVS means conversations are perceived as clearer, more understandable and therefore more natural. Another advantage is that the new codec allows background noise to be suppressed better than before. EVS significantly improves the sound image compared to previous mobile calls.
Effective 1 January 2019, Telefónica Deutschland and MediaMarktSaturn Deutschland will extend their successful sales cooperation by another five years. In addition, both partners intend to expand their existing cooperation, in particular in the online segment. The two companies have now signed the corresponding agreement.
No other network operator is better than O2 when it comes to providing customers in Munich with LTE - this is the result of a recent network test for mobile communications coverage in the Bavarian state capital by specialist magazine connect. Overall, the new O2 network in Munich achieved a “good” rating (830 points), having significantly improved in terms of network quality compared to the last nationwide network test in 2017 (result “sufficient”).
Telefónica Deutschland is currently pushing the nationwide LTE expansion on a massive scale. In order to enhance its customers’ network experience, the company is constructing several new LTE stations in both urban and rural areas and increasing existing capacities. In the first half of 2018, the telecommunications provider already installed more than 3,000 additional LTE stations or upgraded existing LTE sites. This corresponds to approx. 120 LTE upgrades per week – at peak times even 200 per week. Thanks to this comprehensive network expansion, even more customers can browse the web at high speed in more and more places, stream videos smoothly, share their pictures with other people within seconds and make calls in the best HD voice quality thanks to voice telephony via LTE (Voice over LTE; VoLTE).
After growth in the first half of the year, Telefónica Deutschland is on track to meet its targets for 2018. From January to June, the company increased its operating income before depreciation and amortisation (OIBDA) adjusted for exceptional and regulatory effects by 6.1% to EUR 927 million. This was driven mainly by further synergies from the merger with E-Plus as well as the cost-efficient acquisition of new customers. Adjusted for regulatory effects, revenues increased by 0.3% to EUR 3.55 billion in the first half of the year. Revenues from devices and mobile services had a positive effect here. The number of mobile contract customers rose by 333,000 in the second quarter thanks to attractive new tariffs. Mobile data use grew particularly sharply in this period with an increase of 54%, with the new O2 Free tariffs with extra-large data packages playing a crucial role.
Good news from today’s mobile summit, convened by Andreas Scheuer, Federal Minister of Transport and Digital Infrastructure, in Berlin: All parties concerned from the federal government, federal states, local umbrella organisations and the industry have signed an ambitious declaration to fill in the blank spots on Germany’s network supply map.
On its way to the mobile communications network of the future, Telefónica Deutschland is cooperating with NGN FIBER NETWORK KG (NGN) from Lower Franconia in order to have parts of its mobile communications locations connected to high-speed fibre-optic lines. The goal of the network operator is to further improve the performance of its own LTE network, while laying the foundation for a nationwide 5G network that offers significantly better data rates, higher capacities and extremely low latency times.
OIBDA before exceptional effects2) up 5.4% adjusted for regulatory effects3) | Revenues grow by 0.4% adjusted for regulatory effects4) | Mobile service revenues continue positive trend | 157,000 mobile subscriptions added in the quarter | Mobile data use continues to grow sharply: +56% among O2 contract customers with LTE
On February 27th 2018, representatives of Telefónica Deutschland and Huawei underlined their successful cooperation within the framework of the Munich TechCity project during a meeting at the Mobile World Congress (MWC) in Barcelona. The partners signed a new agreement at the Huawei stand in Hall 1 of the Fira Gran Via exhibition center. This extends the cooperation within the framework of the TechCity project in the technology standard 4.5G by three years and explicitly includes 5G.
Telefónica Deutschland has started the company’s sweeping digital transformation into a mobile customer and digital champion by 2022. The programme, dubbed Digital4Growth, puts the needs of customers and customer experience in the Digital Age consistently at the centre of focus.
OIBDA before exceptional effects 1) up 2.6 percent despite impact of regulation | Mobile service revenue returns to growth path | 737,000 contract customers added in the past year | Mobile data usage up 55 percent in 2017 | Outlook for 2018: Revenue before regulatory effects broadly stable | OIBDA before exceptional effects and regulatory effects flat to slightly positive
Vodafone and Telefónica Deutschland are planning to accelerate the connection of their mobile phone sites to fast fibre-optic cables. The two companies have agreed on a pilot project to connect parts of their mobile locations to each other’s high-speed backhaul broadband lines. As a result of the cooperation, even more customers will benefit directly from high-speed data coverage via LTE (4G).
Telefónica Deutschland will be the first network operator in Germany to provide voice calls via LTE and WiFi for all customers of its home brands and partner brands. This includes both postpaid and prepaid customers. When making calls with these technologies, so-called “Voice over LTE (VoLTE)” and “Voice over WiFi (VoWiFi),” customers benefit from improved voice quality and expanded network coverage via LTE and WiFi at no additional cost. Telefónica Deutschland will gradually implement the services across the individual brands and customer groups, and plans to have completed the process by the end of March 2018.