Tim Httges (Deutsche Telekom CEO) – Interview with Norges Bank Investment Management CEO (Nov 2023)
Chapters
00:00:01 Future Challenges and Developments in the Telecommunications Sector
Major Trends in the Telecom Sector: 5G and fiber are the enablers of the next generation of wealth. More data is available everywhere, always best connected. New business models are emerging, such as Web 3.0 development, digital twins in the B2B area, and AI-enabled services. The world’s globalization is dependent on people talking, and 5.3 billion people out of 8 billion are connected.
Challenges in the Telecom Sector: Connectivity is often seen as a human right, leading to political influences in the industry. Challenges vary across continents, with Deutsche Telekom operating only in the Western world, which is advantageous due to shared values and easy cash transfer. 60% of the internet is no longer an open internet, limited by political possibilities. The world is fragmenting, with individual interests becoming more important than global society, leading to further fragmentation.
5G and Beyond: 5G has not yet shown a clear business case, but it has the potential to impact industries such as automotive, home offerings, and collaboration across countries, especially in the IoT sector. Data traffic is increasing by 30-40% annually, putting pressure on the industry to find ways to be more productive and automate services. The industry is working to open up APIs for developers to work on different slices of 5G, allowing them to experiment with different latency and connectivity requirements.
00:06:24 Telecom Industry Challenges and Opportunities in the Digital Age
Telecom Industry Transformation: Tim Httges discusses the contrasting market dynamics between the US and European telecom sectors. In the 90s, European telecom companies had high margins but faced regulatory intervention due to high roaming charges. The US market experienced growth without strict regulations, leading to scale economies and higher infrastructure investment compared to Europe’s fragmented market.
Fair Share Debate: Httges highlights the issue of big tech companies profiting from network infrastructure without contributing to its development. He proposes a fair share debate and a contribution from tech giants who consume significant network resources.
Challenges and Opportunities: Httges criticizes the construction mistake of not charging for network usage, leading to an asymmetry in profits between telecom companies and tech giants. He advocates for termination fees from tech companies to support infrastructure investment.
Deutsche Telekom’s Success and Future Aspirations: The secret sauce of Deutsche Telekom’s success lies in its willingness to transform, focus on connectivity, and strive for leadership in every category. Httges aims to make Deutsche Telekom a leading digital telco, benchmarking its services against highly digitized companies.
Vision for the Future: Deutsche Telekom aims to become the world’s number one telecommunication service provider, maintaining its focus on connectivity and expanding into adjacent areas. Httges envisions a European market consolidation with Deutsche Telekom as a central player, leveraging its values, legacy, and expertise.
Investment Strategy: Httges emphasizes the need to invest in areas where appropriate profits can be gained, avoiding unfamiliar territories. He plans to expand at the edges of Deutsche Telekom’s connectivity business to create a growth company.
Impact of Artificial Intelligence: Httges recognizes artificial intelligence as a game changer, highlighting its potential to revolutionize industries. He acknowledges the ongoing development of AI within Deutsche Telekom, including the use of bots and machine learning.
00:18:06 The Future of AI-Powered Natural Speech Interfaces
AI’s Impact on Human Communication: Tim Httges emphasizes that language is what makes humans superior, and AI’s automation of communication marks a breakthrough and inflection point in history. AI’s effects will be comprehensive, impacting various aspects of our lives.
AI Implementation Strategy: Httges suggests starting AI implementation in areas with abundant data, such as customer interaction. Deutsche Telekom is modernizing its chatbots using GPT to learn from customer interactions and provide improved service.
Natural Speech as the Primary Interface: Httges believes that natural speech will be the primary mode of communication with AI, eliminating the need for screens, keyboards, and other unnatural interfaces. AI will understand users’ needs and respond through voice commands.
AI’s Multimodal Capabilities: AI will not be limited to speech-to-speech communication but will also be able to create presentations, pictures, and other outputs based on spoken language.
AI’s Role in Creativity and Inspiration: AI will assist in routine tasks and inspire creativity by providing a range of answers and new perspectives, enhancing human capabilities.
Human-Machine Collaboration: Httges believes that AI will not replace humans but will work alongside them, providing assistance, inspiration, and knowledge to improve productivity and creativity.
AI’s Impact on Jobs: AI will simplify living by automating routines, allowing individuals more time for creative pursuits and essential activities. New jobs will emerge, requiring skills in programming languages and other areas that are currently inaccessible.
00:22:11 Artificial Intelligence and Geopolitical Tensions in the Telecommunications Sector
The Impact of AI on Geopolitical Tensions: AI is seen as a potential tool for manipulation and manipulation in the current geopolitical climate. Tim Httges cautions against using AI as a weapon and emphasizes the need for data certification protocols. Various AI-related risks, such as fake news and ID management, are discussed.
Equipment Providers and Kill Switches: Httges expresses concerns about the use of kill switches in technology and the dangers of relying on a single supplier. He emphasizes the importance of a multi-vendor strategy to ensure control over critical infrastructure. Httges advocates for open globalization, collaboration, and learning from different continents.
Innovations Beyond AI: Httges highlights several other innovations shaping the telecommunications sector, including: Open RAN and AI-driven code development Disaggregated infrastructure and AI-supported protocols AI-based bots for customer interactions and employee training Internal process automation using AI Chat GPT-4 as a tool for letter writing and communication
Core Values of Deutsche Telekom: Customer-centricity, curiosity, and a sense of purpose and belonging are identified as the core values of Deutsche Telekom. The company’s historical background as a state-owned entity is seen as contributing to its strong sense of togetherness. The company encourages employees to be brand ambassadors and communicate its strengths to customers.
Attitude, Empowerment, and German Identity: Httges emphasizes the importance of attitude and empowerment in driving success. He advocates for a decentralized approach, with 80% of business driven by local empowerment and 20% centralized. The company’s German identity is seen as compatible with its decentralized approach, as it fosters a sense of responsibility and accountability.
00:32:47 The CEO's Leadership Style and Decision-Making Process
Tim’s Management Style: Demystifies the role of CEO, rejecting hierarchical separation and emphasizing practical work experience. Believes in being a “guard horse” rather than an “Escort winner,” focusing on groundedness and staying connected with operational processes. Prioritizes understanding the business, its problems, and customer service.
Importance of CEO’s Role Model Behavior: Emphasizes the CEO’s responsibility to live up to company values, be visible, and be authentic. Believes that genuine understanding of the business and commitment to work earn respect, not love.
Decision-Making Process: Prefers analysis, gathering pros, cons, and holistic views. Encourages organizational discussions to reach conclusions. Acknowledges that perfectionism can lead to slowness and dissatisfaction.
Challenges of Working for a Perfectionist: Initial demotivation and difficulty for employees. Gradually, employees learn to focus on collective achievements and realize Tim’s dedication to the company’s success. The organization becomes ambitious and strives for awards.
Balance between Striving and Enjoying Success: Refers to Goethe’s Faust to explain his constant striving for improvement. Believes that contentment and self-satisfaction lead to stagnation. He views himself as Dr. Faustus, driven by curiosity and a relentless pursuit of betterment.
00:40:42 Insecure Overachievers: Navigating Leadership in Uncertain Times
Personal Experiences and Challenges: Nicola Tangen and Tim Httges share their personal experiences and challenges in their respective careers.
Insecurity as a Trait: Tim Httges acknowledges his insecurity as a result of the complex and uncertain nature of leadership roles.
Anticipating the Worst: Httges’ strategy involves anticipating the worst and preparing diligently for challenges.
Self-conviction and Stamina: Httges expresses self-conviction and stamina gained from his extensive experience in operations.
Ingredients for Future Success: Httges believes Deutsche Telekom has strong ingredients for future success, including market structure, spectrum positions, and technological capabilities.
Personal Definition of Success: Httges defines personal success as staying happy as an individual.
00:43:07 Advice from an Expert Scholar for a Balanced and Fulfilling Life
Key Points: A balanced personality is essential for success in both personal and professional life. It is important to set limits and move on if a situation does not improve after a reasonable amount of time. Staying curious and exploring new interests helps maintain a positive mindset. Inactivity can be harmful, and it is important to stay active and fit. Reading books on psychology and exploring the inner game can help understand and improve attitudes.
Advice to Young People: Stay curious and explore the world, both in personal and professional life. Get out of comfort zones and challenge oneself. Embrace change and see it as an opportunity rather than a threat.
Abstract
Telecom Sector’s Evolution: Embracing Innovation and Overcoming Challenges
Introduction: A New Era in Telecommunications
The telecom sector, a dynamic and rapidly evolving industry, stands at the forefront of technological innovation and global connectivity. This article delves into the major trends shaping the industry, the challenges it faces, and the visionary approaches of industry leaders like Deutsche Telekom and its CEO, Tim Höttges. Emphasizing the impact of 5G, AI, and globalization, we explore how these elements intertwine with business strategies, leadership philosophies, and the ever-changing geopolitical landscape.
Major Trends: The Dawn of 5G and Beyond
The telecom sector is witnessing a revolutionary shift with the advent of 5G and fiber networks, heralding a new era of wealth generation. This technological leap is characterized by increased data availability, fostering better connectivity and novel business models. Innovations such as Web 3.0, digital twins, AI, and globalization are driving this transformation, underscoring the sector’s role in creating a more connected society. Additionally, 5G technology can transform industries beyond telecommunications, including automotive, home offerings, and international collaboration, particularly in the IoT sector. Annual data traffic growth of 30-40% demands increased productivity and service automation. API development allows developers to experiment with diverse latency and connectivity requirements within 5G.
Challenges: Navigating a Complex Landscape
Despite these advancements, the sector faces significant hurdles. Political influences and differing global values lead to a fragmented internet landscape, with 60% of it no longer open and accessible. Additionally, the telecom industry grapples with Moore’s Law, necessitating heightened productivity and automation. A notable challenge is the underappreciation of 5G’s benefits, hindering its business case development. Big tech companies’ significant network resource consumption without contributing to infrastructure development prompts a fair share debate and potential termination fees.
The Future Post-5G: Innovations and Applications
Looking beyond 5G, the focus shifts to opening up APIs for developers, automating services, and exploring new applications in sectors like IoT. This evolution signifies a transition towards more automated, developer-friendly telecom infrastructures. Furthermore, AI’s potential as a game-changer is recognized, and its implementation is underway, with a focus on data-rich areas like customer interaction. Natural speech will likely become the primary communication mode with AI, eliminating traditional interfaces. AI will possess multimodal capabilities, including presentation and picture creation based on spoken language. AI’s impact on jobs will involve routine task automation, allowing individuals more time for creative pursuits and essential activities.
Market Disparities: Europe vs. US
The contrast between the European and US telecom markets is striking. Europe’s regulated market, fragmented with over 100 telecom players, contrasts sharply with the US’s unregulated, consolidated market. This disparity has led to different investment approaches, with the US significantly outpacing Europe in infrastructure investment. European telecom companies experienced high margins and regulatory intervention in the 90s, while the US market flourished without stringent regulations.
Deutsche Telekom: A Case Study in Excellence
Deutsche Telekom exemplifies success in the telecom sector. Its formula hinges on embracing transformation, focusing on classical connectivity, and striving for leadership. Looking ahead, the company aims to consolidate the European market, expand its global dominance, and explore new growth areas around connectivity. Deutsche Telekom’s success formula involves constant transformation, connectivity focus, and leadership pursuit. The company aims to become a leading digital telco, benchmarking services against highly digitized enterprises. Expansion plans include European market consolidation with Deutsche Telekom as a central player and exploration of growth areas adjacent to its connectivity business.
AI’s Transformative Role
AI, particularly exemplified by ChatGPT, is revolutionizing the telecom sector. Deutsche Telekom has integrated AI into various operations, notably in customer interactions. The future of AI in telecom is envisaged as a shift towards natural speech interactions, multimodal capabilities, and enhanced human-machine interfaces, all contributing to increased efficiency and creativity.
Geopolitical Considerations and Security
In a fragmented global landscape, AI emerges as a critical geopolitical tool. The telecom sector’s technological resilience hinges on diversified suppliers and enhanced security protocols, especially in light of geopolitical tensions. Engaging with global partners, including China, is vital for fostering innovation and maintaining a competitive edge. The Impact of AI on Geopolitical Tensions: AI is seen as a potential tool for manipulation and manipulation in the current geopolitical climate. Tim Httges cautions against using AI as a weapon and emphasizes the need for data certification protocols. Various AI-related risks, such as fake news and ID management, are discussed. Equipment Providers and Kill Switches: Httges expresses concerns about the use of kill switches in technology and the dangers of relying on a single supplier. He emphasizes the importance of a multi-vendor strategy to ensure control over critical infrastructure. Httges advocates for open globalization, collaboration, and learning from different continents.
Deutsche Telekom’s Values and Leadership
The ethos of Deutsche Telekom centers around customer-centricity, innovation, and a strong sense of purpose. CEO Tim Höttges’ leadership style is characterized by authenticity, analytical decision-making, and a relentless pursuit of excellence. His approach embodies a balance between perfectionism and celebrating achievements, guiding the company’s trajectory. Deutsche Telekom’s core values are identified as customer-centricity, curiosity, and a sense of purpose and belonging. The company’s historical background as a state-owned entity is seen as contributing to its strong sense of togetherness. The company encourages employees to be brand ambassadors and communicate its strengths to customers.
Empowerment and Decision-Making
Deutsche Telekom’s success also stems from its empowerment of local teams and centralization of key functions. This balance optimizes efficiency and fosters a dynamic and responsive corporate culture. The company’s German identity is seen as compatible with its decentralized approach, as it fosters a sense of responsibility and accountability. Httges emphasizes the importance of attitude and empowerment in driving success. He advocates for a decentralized approach, with 80% of business driven by local empowerment and 20% centralized.
Tim Höttges: A Portrait of a Leader
Höttges, an insecure overachiever, navigates the “gray” world of strategic consultancy with a focus on anticipating challenges and overachieving. His personal philosophy underscores the importance of balance, curiosity, and embracing change, both in personal and professional spheres. He advises young people to remain curious, embrace challenges, and continuously seek personal growth. Tim’s Management Style: Demystifies the role of CEO, rejecting hierarchical separation and emphasizing practical work experience. Believes in being a “guard horse” rather than an “Escort winner,” focusing on groundedness and staying connected with operational processes. Prioritizes understanding the business, its problems, and customer service. Importance of CEO’s Role Model Behavior: Emphasizes the CEO’s responsibility to live up to company values, be visible, and be authentic. Believes that genuine understanding of the business and commitment to work earn respect, not love. Decision-Making Process: Prefers analysis, gathering pros, cons, and holistic views. Encourages organizational discussions to reach conclusions. Acknowledges that perfectionism can lead to slowness and dissatisfaction. Challenges of Working for a Perfectionist: Initial demotivation and difficulty for employees. Gradually, employees learn to focus on collective achievements and realize Tim’s dedication to the company’s success. The organization becomes ambitious and strives for awards.
A Future Shaped by Innovation and Resilience
The telecom sector, spearheaded by leaders like Tim Höttges and companies like Deutsche Telekom, stands at a crossroads of innovation, challenges, and vast potential. As it embraces AI, tackles geopolitical issues, and evolves with technologies like 5G, the industry’s future appears robust, marked by continuous transformation and an unwavering commitment to global connectivity and advancement.
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