Innovation at work Deutsche Telekom Anton H Schaaf

Innovation at work Deutsche Telekom Anton H. Schaaf CTO Deutsche Telekom AG

Agenda. n Introduction n Innovation Strategy of Deutsche Telekom n Innovation Project Examples n Infrastructure Projects 051025 Telesoft Final. pps 1

Deutsche Telekom in figures EUR billion Annual revenue € 57. 9 bn Represented in 50 countries 170, 000 employees in Germany 74, 000 employees abroad 57 m fixed-network lines 77 m mobile subscribers 6 m broadband lines 13. 5 m online customers 1. 5 m km copper cable 197, 000 km fiber-optic cable 80 NTT 70 60 DT Verizon 50 FT Revenue 40 2004 30 SBC BT TI NTT Do. Co. Mo TEF 20 Bell. South 10 0 0 20 40 60 Market capitalization September 2005 80 100 051025 Telesoft Final. pps 2

Deutsche Telekom Group CTO Technology & Platforms Innovation T-Venture T-Labs T-Gallery 051025 Telesoft Final. pps 3

Agenda. n Introduction n Innovation Strategy of Deutsche Telekom n Innovation Project Examples n Infrastructure Projects 051025 Telesoft Final. pps 4

Focus fields of innovation. Our five focus fields have proved to be a stable framework. Focus fields (5 i) ICT spectrum Technology trends Innovation guidelines Integrated Communication Service - Addressability of items “Everything talks” - Home networks - Meta languages & protocols Intuitive Usability User - Automated personalization - Multimodal interface - Sensor technology “Simplify your life” Intelligent Access Delivery - AAA - Service handover - Device adaptation “Always best connected” Infrastructure Development Network - Core network - Access network - IT infrastructure “High quality at reasonable cost” Inherent Security Usage - Identification “Trusted IP networks” - Trustworthy regions - Network-based security tools 051025 Telesoft Final. pps 5

T-Labs Collaboration among industry and academia. Universal Access, Applications & Services Strategic Research Laboratory Security in Telecommunications (appointments at TU Berlin) Usability 4 professorships 50 researchers Inherent Security Infrastructure Development Intelligent Access Integrated Communication Intuitive Usability Service Centric Networking Innovation Development Laboratory (Deutsche Telekom employees ) development engineers 051025 Telesoft Final. pps 6

Future applications. We are working towards 21 applications in six key areas. Communication Messaging Assistent Infotainment E-Commerce Business Support voice communication Messaging/ Unified Messaging Concierge/ Help Service Entertainment - Music and TV Marketplace Mobile working environment / portable workplace Context-related. Information Content/ Information Portal e. Payment and Digital Identity Connectivity Personal Communication - Anywhere On site support Voice Portal Business Process Outsourcing Communication. Assistant Customer Self Care Ego publishing (Blogs, Web Sites) Hosting-Solutions video communication Community Services - incl. solutions for families Home Care & Surveillance 051025 Telesoft Final. pps 7

Agenda. n Introduction n Innovation Strategy of Deutsche Telekom n Innovation Project Examples n Infrastructure Projects 051025 Telesoft Final. pps 8

Challenge. High-speed internet access to (business) travellers in trains. Market n 9. 2 billion train rides in Germany p. a. n Laptop users in Germany spend more than 12. 6 billion hours on trains, but just under two billion hours at airports n German market for train-based wireless Internet services six times bigger than that for airport hotspots Technology n Implementation challenges and technological restrictions - Signal disturbance through the contact wire - ICE’s max. speed of 173 mph - Up to 600 connected users - 832 tunnels - 34. 718 km of overall rail track n Availability and inter-working of UMTS/ GPRS/WLAN/Flash-OFDM German rail track tunnel 051025 Telesoft Final. pps 9

Our Solution. Technological solution achieved and transferred to partners. Our Solution n Intelligent hot-spot environment for choosing the best external connection towards the Internet Onboard gateway as Web-server for local services and data hoarding/ caching server for external data High bandwidth “data showers” in train stations Technical Illustration Home Agent TV & Radio Intern et UMTS/ Flash-OFDM GPRS DVB-T/ WLAN DAB Transferred Results n n n Field trial with SWB (Public Transport Bonn) Rail-net: Cooperation of T-Mobile and DB to bring Internet access to ICEs Internet i Tog: T-Systems in Denmark Train Agent WLA N on train 051025 Telesoft Final. pps 10

Challenge. Bringing dynamic POI content to the mobile user. Market n Over 450 million Java enabled phones in circulation in 2005 and approximately 8 million portable navigation devices (PND) sold in 2005, 100 million estimated for 2011 n But: low market penetration of GPS enabled phones n PND software does not include dynamic Point of Interest (POI) content, e. g. buddy locations, train schedules, movie and event programs, etc. n M-Marketing and Commerce are not supported n Customers avoid LBS because of privacy concerns Technology n Multiple distributed sources of location information (GPS, GSM, other), maps, aerial photos, location and content on POI are available but not interconnected n Display of integrated location based content on mobile phones with their limited capabilities 051025 Telesoft Final. pps 11

Our Solution. Open platform with a variety of location sources and strong privacy protection. Our Solution n n Permission and Privacy Gateway integrating multiple sources of location information (GPS, A-GPS, GSM, WLAN) and allowing users to manage their visibility to the service for privacy protection Location Based Portal mashing distributed sources of static and dynamic POI content Java-based Local Guide phone client Enabling M-Marketing (e. g. couponing) and M-Commerce (e. g. reservations and WAP-transactions) Open Application Programming Interfaces (API) Technical Illustration Map Servers Local Guide Server POI Servers Permission and Privacy Gateway LBS/3 rd Party Servers GPS GSM WLAN 051025 Telesoft Final. pps 12

Challenge. IVR is economical for the operator, but unpleasant for the caller. Market n More than 500, 000 daily calls to DT call centers n strong economic incentive to automate Cost reduction (vs. human operator): 84% Average automation rate today: 30% Potential for call handling automation Technology n Further automation difficult, because callers find IVR systems unpleasant n High unsolved termination rate n Key challenge: Understand additional features of non-verbal communication to bridge information gap between human and systems 051025 Telesoft Final. pps 13

Our Solution. Integration of advanced voice analysis with operational call centres. Our Solution Enhance operational dialogue systems with understanding of meta information n Emotional-aware voice dialogue adaptation n Recognition of gender & age, authentification of identity n Semantic analysis of domain-specific inputs (spoken or typed) n Provisioning of user feedback via animated agents Technical Illustration Current State: CCA: Transferred Results § Field trials in operational call centres (work in progress) § Automation of additional business processes in progress (e. g. authentification for password reset) 051025 Telesoft Final. pps 14

Challenge. Visionary technologies for security right out of the internet. Market n n The Internet has the potential to destroy more economic value through security flaws than it has ever created The Internet is perceived as basically insecure due to high fragmentation of its architecture Technology n n Fundamental design flaw of the Internet: the enemy now is within the Internet, not outside as originally assumed Today customers only protect themselves through installation of security software packages on each individual device they use to go “online”. We have to get rid of this. We have to cope with zero-day-attacks and constantly learn new patterns We have to deal with highly distributed systems and patterns Economic Damages caused through Security weaknesses Economic Damage Estimates in Million Us Dollars Year Lower Upper 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 $ 456, 134. 5 $ 557, 497. 7 $ 215, 694. 1 $ 263, 626. 1 $ 106, 837. 9 $ 130, 579. 6 $ 33, 092. 8 $ 40, 446. 2 $ 23, 518. 0 $ 28, 744. 2 $ 18, 766. 9 $ 22, 937. 3 $ 3, 833. 8 $ 4, 685. 8 $ 1, 655. 9 $ 2, 03. 9 $ 800. 4 $ 978. 3 $ 0. 2 $ 0. 3 $ 891, 832. 5 $ 1, 090, 017. 5 Mi 2 g: SIPS Report "SIPS Monthly Report”, Executive Summary, January 2005 051025 Telesoft Final. pps 15

Our Solution. Combining the best knowledge from network engineering and AI. Our Solution n Ongoing analysis of network flows and intelligent choice of best action points Controlling and cleaning data flows on multiple protocol levels to guarantee security promises to our customers Combining modern techniques from AI and distributed machine learning with network engineering approaches Objectives for deployment n n n Configurable level of security available on request (QSec) Offering a secure connection to the Internet independent from the device. Rapid reaction to new e. Threats. demo 051025 Telesoft Final. pps 16

Agenda. n Introduction n Innovation Strategy of Deutsche Telekom n Innovation Project Examples n Infrastructure Projects 051025 Telesoft Final. pps 17

New infrastructural developments in DTAG In addition to the area-wide deployment of ADSL/ADSL 2+, DTAG starts to roll out VDSL with FTTC in selected German cities. schematic illustration VDSL roll-out in Germany § Starting in 2006 with the first cities developing a potential of 2. 9 million households § By end of 2007 covering the 50 biggest cities in Germany § 20 Mbps for the majority of the households allow for mass market triple play offering with parallel usage of TV, Internet and telephony over DSL even with HDTV main distribution frame street cabinet household fiber 051025 Telesoft Final. pps 18

New infrastructural developments in DTAG. Mobile broadband technologies will be combined to offer the best quality available for mobile data communication to the customer. n UMTS/ HSDPA n n n UMTS (TDD) n n FLASH-OFDM WLAN/ Wi. MAX n n n Increased 3 G coverage by doubling the number of sites until 2008 HSDPA-start at Ce. BIT 2006 providing up to 1. 8 Mbps downlink to the user Beside the speed improvement HSDPA reduces latency by 50% (crucial for browsing and gaming) Fasted commercial UMTS network based on Time Division Duplex (TDD) will be deployed in the Czech Republic (a country with currently less than 3% broadband penetration) Roll-out will cover 85 cities by first half of 2006 with up to 4. 5 Mbps First commercial mobile broadband service using FLASH-OFDM network technology with one 1 Mbps average in the downlink launched in Slovakia As of today, the service is available in selected areas of Bratislava, and in 19 other cities around Slovakia Access to approximately 20, 000 WLAN Hot. Spots worldwide by end of 2005 Wireless-DSL-Pilot based on the Wi. MAX standard to provide fixed/nomadic internet access 051025 Telesoft Final. pps 19

New infrastructural developments in DTAG DT’s integrated NGN architecture consists of interoperable NGN control domains and partly shared infrastructure. NGN architecture NGN deployment § Launch of fixed NGN overlay network in Germany has already been started Application Plane … SDP § Pilot installation of integrated NGN architecture planned for first half of 2006 Control Plane § Integrated NGN architecture IMS common IP Transport common Aggregation (ATM, SDH, Ethernet) PSTN PLMN DSLAM SDH Other Radio Management Plane IMS § supports market specific requirements of each business unit in its traditional market § supports the uptake of fixed-mobileconvergent services in business and consumer market § optimizes overall efficiency by common use of infrastructure like Transport and Aggregation 051025 Telesoft Final. pps 20

New infrastructural developments in DTAG. With NGN a new Service and System Management will be deployed to ensure a customer centric, quality controlled, seamless production. Evolution towards a Next Generation Service and System Management (NGSSM) Management Plane (classical OSS) Management Plane (NGSSM) Common Integration & Process Automation Fulfilment Assurance Mediation Common Data Management § High complexity with multiple systems and a low level of automation and flexibility § Sophisticated level of functionality and process automation § High level of integration and common shared data § Extended reach to manage Customer Equipment and SDP 051025 Telesoft Final. pps 21

Summary Innovation in many ways Innovation at Work Innovation in Preparation § Basic Research for clearly defined subjects § Broadband everywhere §Security §FTTC with VDSL §Usability §UMTS with HSDPA §Service centric networking §UMTS TDD §Universal Access, App’s & Services §Flash OFDM § Product & Service Oriented §Communication & Messaging §WLAN § NGN §Assistant & Infotainment §Common Aggregation §E-Commerce & Business support §Common IP § Pilots §Overlay §Wi. MAX 051025 Telesoft Final. pps 22

Open Innovation. Join the Ecosystem. We believe in open innovation n We are assembling a cluster of R&D partners in Berlin n Besides Deutsche Telekom, Daimler. Chrysler, Siemens and others are already here n We work with them within the framework of EICT (European Center for Information and Communication Technologies) n You are invited to visit us. Maybe we can innovate together? n 051025 Telesoft Final. pps 23

Thank you!