Telecommunications giant Deutsche Telekom and its dedicated IT arm T-Systems held its 2025 B2B Analyst and Advisor Day to announce it new strategic realignment. The realignment includes strengthening corporate structure, increasing customer focus and establishing a clear technology roadmap. The group’s leadership emphasized the central role of AI and data-driven decision-making as essential drivers for digital transformation.
What does this mean in terms of practical implementation and scaling?
Strategic Transformation and Operational Implications
The analyst day opened with a presentation by the group’s high-ranking executives, including José Perdomo, CSO, Deutsche Telekom; Dr. Ferri Abolhassan, CEO, T-Systems International; Klaus Werner, Managing Director Business Clients, TDG; and Elvira González, SVP Growth & Sales B2B Europe, Deutsche Telekom. They discussed the group’s integrated strategy, designed to break down existing silos and foster a companywide approach. This indicates a shift from the company’s traditional, product-centric market strategy to a more solution-oriented one.
Deutsche Telekom’s shift toward a holistic solution portfolio is reflected in its growth rate — the corporate group achieved a CAGR of more than 3% between 2020 and 2024. The turning point in growth meant Deutsche Telekom would not sell T-Systems. T-Systems possesses considerable expertise in the areas of cloud, AI, IoT and cybersecurity — areas that are central to Deutsche Telekom’s B2B strategy.
The realignment comes with a nearly 50% reduction of the group’s existing product portfolio. This will streamline the service portfolio and strengthen its positioning in strategic core industries ― particularly automotive, public sector, healthcare and defense. We anticipate this sharper focus will not only lead to increased efficiency but also to higher customer experience (CX) values, as detailed in the ISG Star of Excellence™ Voice of the Customer program.
The group also announced its increased use of data and AI to optimize internal processes and generate new business opportunities. Deutsche Telekom said it uses the concept of a "spinning wheel," where data forms the central element of the digital value chain. This concept encompasses both internal automation and customer-focused use of AI, especially in network infrastructure. A significant project in this context is the establishment of a meta-AI network, aimed at enabling interoperability of internal and external AI-based services. Additionally, the group reported progress in developing AI engineers, AI operators and business GPT to foster and enhance its automation capabilities.
Telecommunications accounts for 30% of the company’s revenue. Ongoing digitalization is providing momentum as it replaces its traditional MPLS systems with SD-WAN solutions. Concurrently, the company is accelerating its transition from dedicated server infrastructures to virtualized and containerized cloud resources. This approach underscores the continued relevance of sovereign cloud and the company’s focus on security, with solutions being specifically developed for high-risk industries.
The Challenges of AI-based Transformation
The increasing integration of AI and data-driven processes represents significant benefits and challenges for Deutsche Telekom. Here are the four biggest challenges facing the company – challenges it shares with many other companies:
- Technological barriers: Many companies do not have a suitable technology platform for the seamless implementation of generative AI (GenAI).
- Lack of skilled workers: There is a paucity of internal expertise and resources to develop and scale AI-based solutions.
- Data quality and security issues: Data are often not in a state that allows for the immediate use of AI-based models. Furthermore, data protection and security requirements must be considered in an increasingly regulated environment.
- Need for sustainable operations: Transformation requires not only an investment in technology but also a restructuring of business processes to efficiently integrate AI-driven automation.
These challenges highlight the need for all enterprises to begin strategic portfolio consolidation and targeted investment in scalable AI architectures. Currently, more than 80% of companies plan to integrate AI into their business model in the next two to three years, either as fully developed solutions or as pilot projects.
ISG provides more in-depth statistics and forecasts through the ISG Market Lens research, in which it surveys thousands of customers annually about their challenges and initiatives in the context of current technologies, including AI.
7 Highlights from the Deutsche Telekom Analyst Day
- Sustainable digital transformation with AI
- AI and security architectures as enablers of AI strategies
- Scalable end-to-end digital solutions for businesses of all sizes
- Cybersecurity and network security in the era of exponential data growth
- AI-powered IoT connectivity solutions for AR/VR or XR solutions
- Digitization of the healthcare sector
- Omnichannel platform strategies for financial service providers
Additionally, the event showcased interactive demonstrations to highlight the company’s current interest in the following topics:
- CPaaS and Network APIs
- Connectivity and UCC
- AI-powered business line
- Public Sector digitalization
- Mobile network news
- Digital human in service
- RISE with SAP
- End-to-end security
- Accelerating information and communications technology for SMB growth
Is Deutsche Telekom Positioned for Success?
For Deutsche Telekom to achieve its realignment strategy with a focus on AI, data-driven processes and a consolidated industry strategy, it will face several critical success factors: the seamless integration of various company divisions, the consistent operation of AI applications and the scalability of new technological approaches. We believe that the company’s €2 billion investment in new technologies – along with the strengthening of T-Systems as its central IT service provider – will provide a solid basis for sustainable growth.
Germany had plans to invest around €5 billion in AI by 2025, but, so far, it has only spent €3.5 billion. Meanwhile, the U.S. plans to invest at least $500 billion in AI infrastructure with its Stargate project. Major tech companies such as Amazon, Microsoft and Alphabet are significantly increasing their AI investments and plan to jointly invest over $320 billion by 2025 to secure their market leadership. The speed and efficiency of implementation, along with the mobilization and motivation of employees, will be crucial for success. ISG will continue to closely monitor this transformation process and evaluate it based on ISG Provider Lens™ studies.
About the author
Heiko Henkes
Heiko Henkes serves as Managing Director and Principal Analyst at ISG, where he oversees the Global ISG Provider Lens™ (IPL) Program for all IT Outsourcing (ITO) studies alongside his pivotal role in the global IPL division as strategic program manager and thought leader for IPL Lead Analysts. Additionally, Henkes heads the Star of Excellence, ISG's global customer experience initiative, steering program design and its integration with IPL and ISG’s sourcing practice. His expertise lies in guiding companies through IT-based business model transformations, leveraging his deep understanding of continuous transformation, IT competencies, sustainable business strategies, and change management in a Cloud-AI-driven business landscape. Henkes is renowned for his contributions as a keynote speaker on digital innovation, where he shares insights on leveraging technology for business growth and transformation.
