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  • 2017 Corporate Responsibility Report
2017 Corporate Responsibility Report

Infrastructure expansion

Our network infrastructure enables economic performance and participation in the knowledge and information society. As a result, demand for faster, full-coverage data services is immense. That is why we continue to rapidly expand our infrastructure and improve transmission speeds with new, secure technology.

Expanding our infrastructure

The data volume generated globally will increase tenfold by 2020 compared to 2013, according to a study conducted by US-based IT company EMC. That would mean 44 billion gigabytes in the networks a year instead of 4.4 billion. The amount of digital data being produced in Germany alone is expected to grow from a current 230 billion gigabytes to 1,100 billion. Networks need to be continually expanded to be able to handle this volume.

Our contribution to the SDGs

We have been the largest investor in this area in Germany for years now and will continue to drive network expansion. The main objectives of our pan-European integrated network strategy (INS) form the basis for these activities: growth, efficiency and quality. We will continue to expand our networks, increase the efficiency of our systems and further strengthen our role as a leader in network quality. Our integrated network strategy is in line with the network expansion goals specified by the EU Commission and the German federal government (digital agenda and broadband strategy).

Deutsche Telekom's integrated network strategy (INS) for Europe is based on the four pillars of LTE, fiber optics, VDSL img vectoring and hybrid. In addition to expanding the LTE mobile network, fiber-optic expansion in combination with VDSL vectoring technology is the short and medium-term focus of Deutsche Telekom's INS for Germany.

Integrated network strategy

We have defined two targets in implementing our INS in Germany that we plan to have achieved by 2018. One, we expect to be able to provide 95 percent of the population with LTE. Secondly, progress of the fiber-optic network roll-out should allow VDSL img vectoring lines with bandwidths of at least 50 Mbit/s img for around 80 percent of all households in 2018/9. This is subject to regulatory changes.

Upgrading our network architecture
We intend to make our networks faster and more efficient. To do this, we are going to deactivate all analog PSTN (public switched telephone network) platforms that we no longer need and switch our entire telephone network to IP-based lines.

We will also rely on fiber optics when updating our network architecture in order to meet our customers' demands for fast network connections. Using the fiber optic-based VDSL vectoring technology speeds up download data transmission rates to up to 100 Mbit/s and even up to 40 Mbit/s when it comes to upload transmission rates. But vectoring requires more energy. In order to lower this consumption, we are working on control solutions for the energy-saving operation of our facilities. The combination of IP img technology and VDSL vectoring is already considerably more energy-efficient than conventional PSTN technology.

Irrespective of the expansion and renewal of our infrastructure, we aim to operate our networks in the most stable and failure-free manner possible.

Progress

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New communications standard: network revolution instead of evolution

The current LTE communications standard is a fourth generation standard (4G). LTE is continually developing and can fully meet the requirements of consumers for ever greater bandwidth. We assume that the 4G LTE technology will most likely also become a foundation for a future 5G standard. 5G is currently being discussed and developed in the industry. This will allow us to meet the growing requirements of consumers in the future as well.

However, 5G will be able to do much more - the new functions will be interesting first and foremost for industry. That's because 5G will enable new business models which are still inconceivable according to current standards. This includes innovative solutions for the healthcare sector and automotive industry. All in all, 5G will provide 1,000 times higher capacity depending on the application, 10 times better speed and 10 times faster response time (latency) in comparison with conventional technologies.

Advances on the road to 5G

  • We made further progress with respect to response time in the 5G network in 2017. After we cracked the record latency of one millisecond in 2016, we are now also able to guarantee stable low response times in the 5G network. Industrial applications that rely on a high degree of precision in particular need this reliability. At the Mobile World Congress in Barcelona in February 2017, we demonstrated this using an industrial robot whose response times were always exactly eight milliseconds.
  • We were able to prove the industrial sustainability of 5G and the advantages for the energy sector in another practical test in the spring of 2017. In cooperation with the Berlin-based electricity supplier Stromnetz Berlin and telecommunications company Ericsson, we investigated use cases in the electricity grid within the scope of the 5Grid project. The results showed that highly flexible communications networks will soon be available with 5G, which can adapt to the most varied of requirements. Such electricity grids are needed for the shift towards wind and solar energy. 5G can thus become a key driving force behind the energy revolution in Europe.
  • Together with Ericsson and South Korean telecommunications company SK Telecom, we developed the first intercontinental 5G trial network in the world and presented it in the spring of 2017. To this end, we set up what is called network slices (virtual networks) for Deutsche Telekom and SK Telecom in the regions where the two network operators operate. Network slicing enables an operator to offer a network service internationally. Customers would then not need to conclude individual contracts with operators in various countries. Both companies demonstrated this in a test run, during which they set up network slices for, among other things, augmented reality (AR) which allows an augmented perception of reality – for example through smartphones.
  • In September we used the new mobile communications standard 5G New Radio (NR), the future mobile communications component of 5G, for the first time throughout Europe. In Berlin-Schöneberg our network transmitted data over a 5G connection with more than two gigabits per second and a latency of three milliseconds during a field test. This represents an important development step on the road to the worldwide introduction of 5G.

Continuing expansion of the fiber-optic network

Telekom already operates the largest fiber-optic network in Europe with a length of 455,000 kilometers. However, demand for higher bandwidths is constantly increasing. In view of this trend, we continue to expand our fiber-optic network in order to secure our business success in the long term. Our goal is to provide 80 percent of Germany's population with a minimum of 50 Mbit/s img by 2018/2019 – subject to regulatory changes.

To reach this goal, we are using FTTC img (fiber to the curb) technology and are expanding FTTH img (fiber to the home) as well. In the scope of the FTTC expansion, fiber optics are laid to the gray street cabinets on the curb. From there we can supply our customers with large bandwidths via existing lines by means of VDSL img vectoring. With FTTH, the fiber-optic cables are really taken into the customer’s home.

  DSL img 16.000 FTTC with VDSL vectoring FTTH
Download up to 16 Mbit/s up to 100 Mbit/s up to 200 Mbit/s
Upload up to 2.4 Mbit/s up to 40 Mbit/s up to 100 Mbit/s

Vectoring img compensates for electromagnetic interference that arises between the copper lines on the way to the customer's home. The technology allows for faster data transmission with speeds of up to 100 Mbit/s. The technology for this is installed in cable distribution boxes.

In October 2017, we switched the first two of 7,600 nearshore areas in Germany to fast vectoring: Moitin near Rostock and Bad Grund in the Harz region. Nearshore areas are households that are supplied over street cabinets at a distance of at most 550 meters from the main distribution frame (the central service installation for households and companies in the area). The German Federal Network Agency decided in 2016 to approve vectoring expansion in the vicinity of Deutsche Telekom's main distribution frames (nearshore vectoring).

Continuing expansion of the LTE mobile network

We continued to expand our use of LTE mobile network technology in the Deutsche Telekom network throughout Europe in 2017. In late 2017, average network coverage was at 94 percent of the population, putting our European national companies in line with their target coverage. Network coverage at the end of 2017 was around 93 percent of the German population. Our goal is to achieve 95 percent by the end of 2018. Around 75 percent of European transmitter masts are currently equipped with LTE. Two or more frequency bands are active in almost every fourth LTE location, ensuring more extensive reach and higher speeds.

Faster Internet access on board

Together with satellite operator Inmarsat, we are planning to provide airline passengers in Europe with even better Internet access on airline flights. We are currently establishing the European Aviation Network (EAN) within the scope of a strategic partnership with additional partners. EAN is the first integrated solution worldwide that consists of a satellite and a complementary LTE-based ground network. Other partners are telecommunications company Nokia and aerospace specialist Thales.

Deutsche Telekom and Nokia completed the project's ground network at the start of 2018. To this end, 300 antenna locations were installed and the network was connected live. At the same time, Inmarsat and Thales advanced the satellite communication for the EAN. The satellite was launched in the summer of 2017 and has completed its tests in orbit in the meantime. Now it's ready to support on-board Internet services.

The EAN service has been functional since the end of 2017 after completing successful flight tests. Our first customer, airline group IAG, has already equipped multiple airplanes with EAN hardware and launched an internal pilot project. The EAN service is slated to be commercially available for passengers starting in the summer of 2018. The European-wide introduction of EAN for the entire IAG fleet will take place in 2019.

 

Pan-European network (Pan-Net) is taking shape

To date, our European national companies have operated their own infrastructures and developed their services independently. However, the switch to IP technology – to be largely completed by 2018 - will make it possible to develop new services together and share them across borders. We hope to tap into this potential by creating a pan-European network.

Individual services such as text messages, voicemails and e-mails will be made available to all countries in the pan-European network as "product building blocks." Our Pan-Net cloud will serve as the basis for this. Every national company can then use the building blocks to create an offer that suits their local market and customer requirements. We can also use this technology to offer new solutions throughout Europe within just a few days.

The Pan-Net cloud is an association of data centers distributed throughout Europe. After we started up operations in the first of these data centers in Hungary in 2016, another center followed in Poland in 2017. Greece should be added to this list at the end of 2018. We founded a new company for management and control of the new infrastructure in 2015: Deutsche Telekom Pan-Net, headquartered in Slovakia.

Switch to IP technology advances

Thanks to IP img technology, phone calls are no longer transmitted via analog channels or using ISDN img technology but in the form of data packets over the secure Deutsche Telekom network, a method that has been the standard in online and mobile communications services for some time now. The switch to IP-based lines is the basis for faster Internet connections. At the same time, energy use with IP technology is considerably lower than with the network technology previously used. The switch therefore also helps us decrease our CO2 emissions

By the end of 2017 we had switched about 16.5 million lines in Germany, that is around 69 percent, to IP. We continue to convert about 70,000 connections every week. After placing our focus on consumer lines for some time, we began increasingly focusing on business customers in 2016. The IP rate for business customer lines was significantly more than 50 percent by the end of 2017. Thanks to the use of IP-based vectoring technology, 3.5 million households in almost 50 cities could surf the Internet with up to 100 MBit/s by the end of 2017.

In the other EU countries we also increased the number of IP lines. In Croatia, Montenegro, Macedonia and Slovakia, all lines have already been switched to IP. Hungary followed at the end of 2017. The plan is to complete the switch in Greece and Romania by 2018.

Award for mobile network in Germany

TÜV NORD bestätigt: Telekom bietet die beste Mobilfunknetz-Qualität

TÜV NORD confirms that Deutsche Telekom offers the best mobile telecommunications network quality
Instead of a testing snapshot, as is common to most tests, we have had the quality of our network tested throughout the year for years now. Testing vehicles record measurement data for speech and data services as part of continuous testing. They record the network quality, also compared to our competitors’ mobile communications networks. This is done to ensure more transparency. The result is that we rank the best in the categories of call set-up, call stability and voice quality.

The professionals at TÜV NORD CERT extensively tested the "quality comparison from the customer's perspective" process (QCCP). They confirm the neutrality of the recording and processing of test data and have issued the TÜV Service Check certificate for the "Test and Evaluation Process according to QCCP Standard" without restrictions.

Telekom als bester Mobilfunknetzbetreiber mehrfach ausgezeichnet

Deutsche Telecom receives multiple awards as best mobile communications operator

Stiftung Warentest (edition: 06/2017)
The consumer organization Stiftung Warentest once again confirmed in 2017 that Deutsche Telekom has the best mobile communications network in Germany. Stiftung Warentest tested the networks in Germany on freeways, highways and in city centers. Our performance was the best, with an overall rating of 1.9 (good). A Telekom LTE signal could be obtained in 97 percent of the test regions in rural areas.

Erste Plätze bei Connect-Leserumfrage 2017 (Ausgabe 7/2017)
Erste Plätze bei Connect-Leserumfrage 2017 (Ausgabe 7/2017)

First place in the 2017 Connect reader survey (edition: 7/2017)

We are the best mobile communications operator and the best landline provider. This was once again the conclusion of the annual choice of the readers of the trade journal Connect. Our products and services won additional important prizes:

mobile network operator (three competitors) network operator - prepaid cards (three competitors)
mobile communications provider (18 competitors)
landline provider (eight competitors)
cloud services (seven competitors)
mobile network operator, Austria (three competitors)

Car Connectivity Award (Ausgabe auto motor und sport 22/ 2017; Ausgabe CHIP 11/ 2017)

Car Connectivity Award (edition: auto motor und sport 22/2017; edition: CHIP 11/2017)
Readers of auto motor sport and CHIP honored us with first place in the Mobile Networks category of the Car Connectivity Award. Two-thirds of the 16,300 surveyed readers rated us the best cell phone network for cars. This marks the fourth time in a row that we impressed the magazine's technology and car enthusiasts.

Chip (Ausgabe 1/2018) Chip (edition: 1/2018)
We also won the CHIP mobile communications test. The testers criss-crossed the country by car in order to comprehensively test the network coverage and quality of the mobile communications networks of Deutsche Telekom, Vodafone and O2. We won in many categories, including Mobile Internet, Telephony, and Availability, and again clinched the overall victory with a rating of 1.4.
Connect Mobilfunk-Netztest (Ausgabe 1/2018)

Connect mobile network test (edition: 1/2018)
We were also the overall winner of the Connect mobile network test 2018, with a rating of "very good". The testing examined the voice and connection quality during phone calls as well as data communication via mobile Internet. The measurements were taken in various locations, such as cities and small towns as well as in trains