Deutsche Telekom CEO downplays Orange talk, says focused on US merger

Monday 2 December 2019 | 14:59 CET | News

Deutsche Telekom will continue to seek areas to cooperate with Orange where possible, but the German operator's current focus is on the US market and completing its merger with Sprint here, CEO Tim Hoettges said. He was speaking at the FT-ETNO Summit in Brussels, responding to questions on recent reports that Telekom and Orange were considering a merger

Hoettges noted that the "wherever there were areas to cooperate with Orange, we did it", citing their jointly developed smart speaker and digital assistant and their joint procurement alliance. In several areas, they have a "very tight relationship already", he said. 

However, the Telekom CEO's focus at the moment is on the US - "my hands are tied up" with this, Hoettges said. He has been visiting the US frequently in order to secure the last regulatory approvals for the merger, the CEO noted. Without commenting directly on the Orange reports, he said "wherever we can realise synergies, we will do it".  

Orange's CEO, Stephane Richard was also scheduled to speak at the ETNO conference as well, but was replaced at the last minute by the Orange Business Services CEO.

Wake-up Europe 

Hoettges delivered a speech at the summit termed a "wake-up call" for Europe, calling on the EU to improve its regulatory environment in order to match the ambitions of the US and Asia and take the lead in the global digital value chain. His comments came ahead of a meeting of telecom operator CEOs with the EU's competition commissioner Margrethe Vestager, who has new responsibilities for the digital single market in the new European Commission, which took office 01 December. 

Hoettges said his company was happier to invest in the US at the moment, rather than Europe, as the US "knows what it wants", such as taking a lead in 5G. To make 5G available to as many people as possible quickly, the US is bringing a lot of spectrum to the market, including mmWave ranges, whereas Europe is still dealing with 28 different spectrum policies, the CEO said. He called for the EU to harmonise its spectrum policy and lower the cost and administrative burden to employing spectrum and rolling out new infrastructure. 

Cloud competition

Despite the "Draghi effect" of low interest rates in the past decade, Europe was not keeping up in terms of network investment with the US, Korea or Japan, the Telekom chief said. Telecom operators were also being outspent by new market entrants, such as cloud providers. Hoettges pointed to the example of Microsoft, which he said has tripled its fibre backbone over the past year as well as significantly expanded its data centres, encroaching on the telco's traditional areas as well as future prospects such as 5G edge computing services.

The EU needs to ensure a level playing field for telcos competing with these entrants, which are offering similar services, but to date have not been not subject to the same regulation, according to the CEO. In addition to changes in sector-specific regulation, the ETNO members will be asking the new Commission for changes in competition policy, in order to support consolidation and network sharing, driving increased scale in the sector.  

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Categories: General
Companies: Deutsche Telekom / ETNO / European Commission / Orange / Sprint
Countries: Europe
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