New Deutsche Telekom CEO Timotheus Höttges has set out his grand strategy for the German telecoms giant. DT will go all in on 300 megabits-per-second “LTE advanced” technology, it will create a pan-European all-IP network by the end of 2018, and it will make a major partnership push on top of existing tie-ins with the likes of Spotify and Evernote.
That last point is particularly interesting, in the light of telecoms firms’ quest to retain relevance in these days of so-called “over the top” services – outfits such as Spotify and WhatsApp that run over the telcos’ data networks and threaten to relegate them to being “dumb pipes” for other people’s traffic, and little more.
There are a few ways in which a telco can respond to this threat: ignore it; try to create in-house rivals to these services; or partner up. Deutsche Telekom (DT) has chosen the latter path and other telcos such as Telefonica, with its Line deal, are starting to do the same.
Referring to the German word for “power strip”, Höttges said in Thursday’s statement: “We build standardized platforms — imagine a ‘Steckerleiste’ where partners simply plug-in their services.”
DT wants to make it so that partners can integrate their services into the telco’s systems within 3 months, both technically and in contractual terms. This means boosting DT’s portfolio, but also giving the telco control over the billing process.
The company indicated that it was particularly interested in partners in the smart home and machine-to-machine space, as well as in payments. For example, DT has partnered up with home automation platform Qivicon and with the Tolino e-reader ecosystem, so that their customers can pay through their DT bill, while providers can leave “technical processes” to the telco.
Such partnerships would definitely threaten to raise the net neutrality alarm if the relevant traffic received preferential treatment on DT’s network. Company spokesman Andreas Leigers insisted to me on Thursday that there wouldn’t be any traffic prioritization, but he did leave open the possibility of these services’ traffic not counting towards the customer’s usage cap. “It depends on the respective partnership,” he said.
This is already what happens with Spotify on DT’s network, for example, and there’s a strong argument for calling this a net neutrality violation. When DT tried something similar on its fixed-line network last year – an attempt to exempt its own T-Entertain video service from newly-introduced usage caps — that’s certainly how regulators and the public saw it. After all, it steers users towards the service that doesn’t chew into their allowance, rather than rivals that do.
DT is already rolling out LTE, or 4G, in nearly all its markets. The firm said on Thursday that it hoped to be offering high-speed mobile broadband across more than half its networks by the end of 2017. On the fixed-line side, it wants to have migrated everything across to all-IP services by the end of 2018, by which point mobile and fixed-line can all be part of the same happy family.
According to Höttges:
“We want to intelligently link all of our network access technologies with each other, and we want to do this across national borders. At the same time, customers should be unaware of the complex technology. They simply get the best connection, whether they are at home or on the move.”
Right now DT is building out 150Mbps capabilities for its German LTE network, and it has its eye on up-to-300Mbps speeds using “LTE Advanced” technology. The carrier’s U.K. joint venture with Orange, EE, is already preparing that particular upgrade, it said this week.