YOU ARE AT:5GDeutsche Telekom puts AI at the core of its growth strategy

Deutsche Telekom puts AI at the core of its growth strategy

Deutsche Telekom plans use more AI, particularly to streamline customer support processes.

German telecom firm Deutsche Telekom has announced that artificial intelligence (AI) and global economies of scale will be pivotal to its growth strategy over the next few years, according to a company statement.

Based on its 2023 financial results, Deutsche Telekom forecasts an average annual growth of around 4% in both total revenue and service revenues through 2027.

“In recent years, our strategy has made us the undisputed number one in Europe. We have achieved or even exceeded nearly all of our targets and are now worth more than all our peers on our domestic continent combined. We will build on this position in the future, for example, by further intensifying the use of artificial intelligence,” said Tim Höttges, CEO of Deutsche Telekom, during the company’s Capital Markets Day event in Bonn, Germany.

By 2027, Deutsche Telekom expects to generate more than €15 billion ($16.4 billion), which will provide the flexibility to either increase its stake in T-Mobile US or repurchase additional shares, while also allowing for greater strategic flexibility in general.

The European operator aims to drive future growth by enhancing its business model to become more data-driven and automated. Deutsche Telekom plans to intensify its use of AI, particularly to streamline customer support processes. This includes using AI for automated identification, documentation and faster information processing.

Deutsche Telekom also emphasized its goal of leveraging global economies of scale across its 300 million customers worldwide. The telco plans to capitalize on globally-available services and API-based IT platforms hosted in the cloud, utilizing global ICT solutions and partnerships to further drive efficiency and growth.

In Germany, Deutsche Telekom said it expected to add approximately 2.5 million new homes passed each year through 2027, reaching a total of 17.5 million. Meanwhile, its European subsidiaries are expected to add about 1 million homes passed per year, with a total of 13.5 million homes expected across the telco’s European operations by 2027.

In terms of its 5G network, the company aims to expand coverage from the current 78% to 95% across its European footprint by 2027. Deutsche Telekom also plans to boost revenue by increasing market share and expanding its portfolio, which will include fixed-network substitution, 5G campus solutions and network slicing.

In its global B2B segment, Deutsche Telekom aims to accelerate both revenue and earnings growth. After achieving average revenue growth of 1.9% between 2020 and 2024, the company expects growth in this area to increase to 3%, along with a corresponding rise in profitability. Key factors driving this growth include a higher share of contracts awarded by corporate clients, stronger expansion in the public sector, cross-selling opportunities and an enhanced portfolio in cloud services, security, IoT and AI solutions.

ABOUT AUTHOR

Juan Pedro Tomás
Juan Pedro Tomás
Juan Pedro covers Global Carriers and Global Enterprise IoT. Prior to RCR, Juan Pedro worked for Business News Americas, covering telecoms and IT news in the Latin American markets. He also worked for Telecompaper as their Regional Editor for Latin America and Asia/Pacific. Juan Pedro has also contributed to Latin Trade magazine as the publication's correspondent in Argentina and with political risk consultancy firm Exclusive Analysis, writing reports and providing political and economic information from certain Latin American markets. He has a degree in International Relations and a master in Journalism and is married with two kids.