Deutsche Telekom unveils new structure for operations

OVUM COMMENT Sally Banks, senior analyst at Ovum
(PresseBox) (Köln, ) It's all about getting more from the core

At the present time, when telcos are witnessing declining traditional revenues and margins being squeezed, as well as the impact of the global economic downturn, operators across the globe are looking at ways to get the most from their core assets (largely fixed and mobile networks and services) through greater efficiencies and synergies, reducing costs and finding new revenue streams. These issues are becoming increasingly important to telcos and are the subject of Ovum's recently published report Identifying and managing the telco's core business.

One way of addressing these pressures is through restructuring the business. Deutsche Telekom hopes that by integrating its fixed and mobile businesses (T-Home and T-Mobile) all fixed and mobile networks and services can be built, managed and marketed from a single mold, rather than in the standalone business units. There are also significant cross-selling opportunities created from integrating the fixed and mobile businesses, as it gives DT greater transparency of the customer's total communications requirements and usage patterns, as well as enabling further possibilities for bundling and convergence.

Restructuring is part of the wider transformation of the telco Transformation is taking place at every level within the telco, and DT is no exception. As telcos migrate from multiple legacy networks to single next-generation networks and customers look to purchase not only voice but Internet and TV services from their telco, the organisation of the business needs to reflect these changes too.

The reorganisation marks a shift from product-centric to customer-centric business units, although DT has yet to outline its detailed customer segments for the combined fixed and mobile entity. We expect these to be along the lines of consumer, business, wholesale and enterprise.

Once the sales, marketing and customer service functions as well as the business units become aligned with the customer segments, it is much easier to provide a one-stop shop for the customer. This in turn lowers costs through the reduced need for multiple customer service numbers and calls, enables the implementation of a single IT system for customer management and therefore improves the customer experience and hopefully loyalty too.

The reorganisation has led to management changes, including new roles within the Operations team that will focus on integration of IT across the group. This aligns with the best-practice approach we have seen elsewhere - with Telstra and Telefonica, for example - and should promote innovation within DT along with the desired integration and synergies.

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