Proving the Business Case for the Internet of Things

Deutsche Telekom snags Daimler deal worth "several hundred million euros"

Iain Morris
May 7, 2014
Germany’s Deutsche Telekom says its T-Systems IT business has won a major automotive contract with Daimler that represents one of the largest systems integration deals in the company’s history.

Valued at “several hundred million euros”, the contract will see T-Systems take responsibility for maintaining, developing and integrating the software applications that Daimler (Stuttgart, Germany) uses across all of its major business areas.

It also includes plans for collaboration on future connected-car and cloud-based service offerings.

Daimler is a long-standing Deutsche Telekom (Bonn, Germany) customer and the two companies first announced they would work together on developing connected-car services in March 2013.

Announcing that particular deal, DT said it would support the development of cloud-based in-vehicle communications services like real-time traffic information and access to social networks and also begin equipping future Mercedes-Benz models with M2M SIM chips to support mobile transmission.

With the latest deal, the operator said it was “cementing” the existing business transactions and helping to advance the digitization of the economy.

“The major trust that this long-standing customer places in us shows that Daimler is extremely pleased with our performance and wishes to continue our close collaboration,” said Reinhard Clemens, the chief executive of T-Systems. “T-Systems has supported the automotive group with application services in development, maintenance and consulting for many years.”

The automotive sector forms one of the target markets for T-Systems’ portfolio of intelligent network solutions, from which Deutsche Telekom is aiming to generate €1 billion ($1.39 billion) in revenue in 2015.

The projection looks ambitious given that intelligent network solutions made just €200 million in 2013, although this represented a doubling of revenues since 2012.

Nevertheless, Deutsche Telekom’s automotive-sector business has recently appeared in danger of stalling, with major operator rivals in Europe and the US appearing to win deals at its expense.

In January, for instance, AT&T (Dallas, TX, USA) won a contract to provide 4G connectivity in vehicles made by Audi (Ingolstadt, Germany), which had previously used T-Mobile US (Bellevue, WA, USA) – Deutsche Telekom’s US subsidiary – as its 3G wireless data provider.

And in March, European rival Vodafone (Newbury, UK) announced that it had won a major contract with Volkswagen (Wolfsburg, Germany) and Audi to provide connectivity services in European vehicles.
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