Deutsche Telekom 2020: Leading The Digital Transformation

Tim Höttges was at the outset of his seventh year as CEO of Deutsche Telekom (DT) in 2020. The company served more than 184 million mobile customers and had a presence in over 50 countries. Over the course of the previous 7 years, European telecommunication companies had experienced varying degrees of success. Revenues for telecommunication companies in France, Germany, Italy, and Spain as a whole fell by 14 percent from 2012-2019, while DT's revenues rose by 38 percent, with fully two-thirds of DT's revenues generated outside of Germany in 2019. In late January, 2020, Höttges and his executive team are focused on the challenges faced by European telcos: advances in "digitization," "cloudification" and "softwarization" of the telecommunications network, along with the growth of 5G wireless capabilities, and the emergence of new types of co-opetitive relationships with the hyperscalers, large companies like Amazon and Microsoft that were making efforts dominate the public cloud and cloud services industries and expand into related verticals. This case describes the strategic challenges facing DT in 2020 and beyond that Höttges needs to think about and act upon: (1) the evolution of network technologies to cloud-centric production models, (2) attractive products and services as well as customer interaction through digital channels, synergies, and efficiency levers in internal processes, (3) the battle with the hyperscalers, and (4) the resolution of the fiber-to-the-home (FTTH) challenge in Germany.

• Organizational behavior
• Business and society
• Strategic analysis
• Competitive strategy
• Diversity and inclusion