Innovation in growth areas

By developing smart solutions in the areas of smart energy, connected car and e-health, Deutsche Telekom has been able to tap new, high-growth business areas over the past few years. Cloud computing and machine-to-machine communication are other areas in which we have developed sustainable products.

By focusing on these areas, we contribute in different ways to creating more efficiency and convenience for our customers as well as helping them reduce their impact on the environment and their carbon footprint. This also positions us as a modern technology group that is able to anticipate and influence future developments. It is for this reason that we invest in wide-ranging research and development activities, in particular at our main research institution, the Telekom Innovation Laboratories (T-Labs ). We invested at total of EUR 95.6 million in research and development throughout the Group in 2014. We are also committed to financing professorships and cooperate with universities in the creation of pioneering ideas.

Climate-friendly energy supply calls for smart solutions for the measurement and control of energy flows. On the one hand, consumers need to be able to see how much energy they are using and when so that they are motivated to cut back their consumption. Smart meters create the basis for this. Within the scope of our pilot project to identify business potential through sustainability, we also studied the sustainability advantages of smart metering in detail. Households can reduce their electricity consumption by up to 8 percent by using smart meters. According to our calculations, installing smart meters in 7.8 million households in Germany would reduce CO2 emissions by up to 1.2 million metric tons by 2020.

SMART METERING

On the other hand, natural fluctuations in the supply of wind and solar power need to be balanced in order to regulate grid loads and prevent power failure. This requires a smart grid that uses ICT  to flexibly regulate power storage or decentralized combined heat and power stations. Managing the demand of millions of end-consumers, for example, by switching devices on and off as needed, can also help stabilize the grids. Smart meters provide energy providers with real-time information on power consumption and power generation at homes and companies.

That is why using smart meters will be a key prerequisite for restructuring the energy market. The German federal government paves the way for large-scale installation. It is planning to install eight million smart metering systems connected to the ICT  network by 2029 and another 40 million meters that can be hooked up to the network by 2032, making smart metering a business area with strong development potential for our company.

At the same time, we are aware of our responsibility to protect our customers' data. Deutsche Telekom complies with the requirements specified in the Federal Data Protection Act. This includes recording and transferring only data that is genuinely required. If a distribution network operator requires the data for network or load management purposes, anonymized data will suffice. Deutsche Telekom also transmits the data encrypted through a public key infrastructure in compliance with the specifications passed by the German Federal Office for Information Security (BSI). Our gateway administration service makes sure that only authorized parties who require the data for their services get access to the data.

Energy transparency and efficiency for business customers
Deutsche Telekom also provides businesses with solutions to reduce their energy consumption. The visualization of energy consumption can help a company's facility management identify and realize reduction potentials. This information is provided through smart metering, supplemented by appropriate KPIs such as energy consumption per square meter and a comparison of consumption at different locations. Experience has shown that companies can reduce their consumption by around 15 percent.

There are many ways in which a smart home can make life easier. It lets residents conveniently control and monitor a large number of building and security technology devices and functions, including home entertainment. If in the past customers bought a smart-home solution, they could only use the functions and devices of their particular provider and not those offered by other providers. The challenge therefore was to come up with a multi-vendor smart home solution. Deutsche Telekom and other key players together developed the QIVICON platform on which any company, regardless of their industry or size, whether they are a utilities company or a building technology vendor, can offer their own solutions. This platform gives consumers the option to customize their own combination of different offers. More than 30 partner companies and brands currently offer their solutions on the platform. Offers in the energy sector, for example, include consumer products from EnBW, Vattenfall, RheinEnergie, and Deutsche Telekom. Solutions like smart radiator thermostats can reduce energy consumption by up to 30 percent. Partner companies offer other security and convenience products, and the range of QIVCION-based offerings and devices is growing constantly.

To accelerate the smart home standardization process, we joined the international open-source community Eclipse Foundation in 2014, an association founded to encourage the development of open-source software. We are going to open our platform to developers and start-ups so that we will be able to offer our users an even greater variety of products and services in the future. We intend to also offer our open, multi-vendor platform at international level in future.

QIVICON's open, non-proprietary approach was recognized by the international corporate consulting firm Frost & Sullivan in the reporting period. Frost & Sullivan named QIVICON the most innovative smart home solution and presented it with the European Visionary Innovation Leadership Award 2014.

Readers of Chip computer magazine rated QIVICON as "good" in 2014. One of the aspects they praised was the fact that the platform is so easy to install. Users can use apps developed by QIVICON partners to individually or automatically manage, monitor, and combine connected devices via any Internet-enabled computer, smartphone, or tablet. To help conserve resources, QIVICON partners, for example, offer products including a feature that automatically turns down the heat as soon as a window or door is opened.

Data in safe hands
All communication via the QIVICON Home Base, which is connected to the Internet via servers, is encrypted. Any user data related to QIVICON is stored exclusively on Deutsche Telekom servers in Germany.  All devices from partner manufacturers that are controlled via QIVICON employ wireless technology based on state-of-the art security functions. Data security was confirmed during the reporting period by an independent IT security test conducted by AV-Test GmbH. The test rated QIVICON as "secure" and verified that the encryption technology used provided effective protection against non-authorized access.

Machine-to-machine (M2M) communication and Connected Car are important growth areas for Deutsche Telekom. We offer our customers numerous benefits by connecting machines digitally. The technology quickly synchronizes the work processes of customer devices and cars or even entire industrial systems. This increases industrial productivity, makes transportation more reliable (and more accurate) and helps reduce energy consumption and conserve resources.

We support the German federal government's Industry 4.0 initiative through our involvement in M2M communication. The initiative's objective is to make Germany more competitive as a technology business location. At the same time, we are also involved internationally in promoting efficiency through connectivity, for example, as part of the Smart Wine M2M project.

The Smart Wine project is a collaboration between our subsidiary in the FYRO Macedonia and the Ss Cyril & Methodius University in Skopje to optimize wine cultivation processes. The technical basis for the project is a sensor-supported system that monitors grape development and controls all of the production processes. It helps winegrowers lower their consumption of energy, water, and chemicals. Besides this, the system provides information on plant disease, weather problems, and optimal harvesting dates. The product has already been launched on the market. It can easily be adapted to other agricultural production sectors.

M2M solutions for more efficient transportation: Examples
There is considerable potential for using M2M in the logistics sector. Within the scope of our Connected Car Group business area, we develop customized solutions that tap this potential. We collaborated with logistics company DB Schenker in 2014, for example, to develop an application for more efficient fleet management that uses a traffic light system to give drivers tips in real-time on how to optimize their driving behavior.

In addition, we will continue the Smart Port Logistics pilot project for the Port of Hamburg in 2015 and gradually incorporate it into commercial operations. The goal of the project is to improve truck traffic flows at the Port of Hamburg and in its vicinity. Large amounts of data are used to analyze the current traffic situation and create short-term forecasts. Among other things, this provides truck drivers with information on waiting times and alternative routes.

In late 2014, we also signed an agreement to found a joint venture with the world's largest mobile provider, China Mobile. Both partners will hold a 50-percent share in the company. The joint venture will use the platform technology and some of the services from our Connected Car business area to develop innovative solutions for the Chinese market from 2015 onwards. These solutions are to help customers plan their routes more effectively and encourage fuel-efficient driving.

In collaboration with DB Schenker logistics, we implemented a solution for more efficient fleet management in 2014. The solution was awarded second place in Computerwoche magazine's Big Data Award in September 2014. The application uses mobile communications and GPS  to track all vehicle movements and analyzes their energy and resource consumption. A traffic light system provides drivers with real-time tips on how to optimize their driving behavior.

If requested, the system can also calculate the CO2 emissions produced for each piece of freight. This provides clients with information on their supply chain's carbon footprint, which they can then use for targeted reduction measures and communication purposes.

Connecting services creates numerous improvements in the healthcare sector. They make it possible for many people with disabilities to live an independent life. Not only do telemedical assistance systems help reduce costs, they also offers patients, their families and medical staff a wide spectrum of ways to simplify their work and daily lives. A study on digital remote patient care that we conducted in collaboration with the Berlin Charité hospital in May 2014 found that doctors need less time to analyze results, leaving them with more time to talk to the patient and their colleagues. Hygiene requirements are met by using tablets. So there is nothing to stop us from making these systems part of daily routines.

Model project for comprehensive healthcare
One example of our work in this area is our collaboration with Carus Consilium Sachsen GmbH, a subsidiary of the Dresden university hospital. Together, we are building an open, accessible, interdisciplinary IT platform for medical care for people living in Eastern Saxony. The Telehealth Ostsachsen model project is expected to help guarantee comprehensive, local medical care in rural regions for patients in the comfort of their own homes. At the heart of the project is a virtual round table at which patients, doctors, insurance providers, hospitals, and other medical healthcare providers can take an interdisciplinary approach and work together online. We have provided special standardized software and secure data transmission channels for the project. A basic version of the platform passed initial internal tests in late 2014; the plan is to go online in July 2015 with three sample applications for congestive heart failure, after-care for stroke patients, and tissue analysis.

The project uses a full-coverage approach that involves all participants and is exemplary even at European level. It shows how comprehensive, long-term telemedical support for healthcare can be provided effectively at a supraregional level. This is one of the reasons why the EU and the Free State of Saxony support the project with almost EUR 10 million.

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