Driving digitalisation

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The strategy reflects the transition of Telekom Austria Group from a telecoms incumbent offering communication services to an established telecoms provider driving digital business and lifestyle. The Group’s infrastructure serves the needs of an emerging digital society, allowing people and businesses to connect anywhere and at any time. In Austria A1 owns the best mobile network by far according to the connect magazine also in 2014, and with an additional investment of EUR 400 mn the fibre rollout planned for 2015–2018 will set the company up with futureproof infrastructure in its fixed-line business as well. By harnessing its network advantage in both mobile and fixed services, A1 endeavours to offer customers content which flows seamlessly between multiple devices such as smartphones, tablets and TVs. The focus on seamless connectivity extends into business and wholesale solutions also. Moreover, Telekom Austria Group sees it as its responsibility to enable the digitalisation of society in order to foster growth and create innovation and employment, thus contributing to the development of new services and industries.

Incorporated in this vision of Telekom Austria Group as a digital company are a number of core beliefs which the company views as part of its heritage and as central to its position today. These core beliefs are presented as the ‘7 Cs’ and include Convergence, Consolidation, Core business, Content, Capex, Compliance and CEE, and form the cornerstones of the company’s strategy.

Woman holding globe (Illustration )

The ‘7Cs’ — core beliefs of the Telekom Austria Group

Most importantly, convergence, or the ability to offer fixed and mobile services, is required to handle increasing data volumes. Telekom Austria Group also regards consolidation within its markets as key to ensuring operating efficiency. Expansion into activities close to its CORE BUSINESS will differentiate it further from competitors. One of these is content, which will increase the value for customers across multiple devices (seamless content). Beyond this, Capex optimisation is required to ensure the maintenance and continuous improvement of the underlying infrastructure. Compliance and integrity form the basic underlying principles of company conduct. And lastly, the Group’s operations in the CEE region are a core concern, as the company continues to build on and benefit from its knowledge of diverse cultural environments.

In addition, management regards the alignment with the company’s conservative financial strategy as key premise and framework for all strategic initiatives. Said strategy remains largely unchanged from prior years, with the protection of investment grade credit ratings of Baa2 by Moody’s and BBB by Standard & Poor’s respectively. This rating category serves to maintain the company’s access to capital markets, to safeguard financing options and to guarantee the necessary financial flexibility for investments. Telekom Austria Group has also committed to paying a dividend of 5 Eurocents in 2014 and 2015 (proposal to respective AGMs). The company targets a sustainable pay-out level with the capacity to grow over time, if possible.

From this understanding of the strategy framework and core beliefs emanate the four building blocks of the Telekom Austria strategy pyramid.

  • Convergence and in-market consolidation form the first integral element. The company’s ability to offer customers product bundles set it apart from the competition and management intends to further consolidate Group operations with this in mind. In its mobile-only markets the Group continues to focus on growth to achieve sustainable market positions, while evaluating the potential to develop into convergent operations.
  • The second building block of the strategy expresses management’s desire to extend the value chain by offering new services and enhancing the customer experience.
  • Management will also consider an expansion of the existing footprint in the context of its conservative financial strategy.
  • Lastly, excellence in operations is the foundation of the Group strategy, in that operational success rests on the optimisation of all business processes and the efficient allocation of resources.

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