Sunday, April 17, 2011

Deutsche Telekom and France Telecom Seek Savings in Joint Procurement

Deutsche Telekom AG and France Telecom-Orange outlined details of their 50-50 joint venture company aimed at generating significant cost-savings through common purchases of network infrastructure equipment.

The companies estimate cost savings of 400-900 million Euros after three years of joint purchases.

The jointly owned and operated entity will have two operational units in Bonn and Paris staffed by employees from the respective procurement departments of both groups that already deal with purchasing customer equipment, network technology, service platforms, IT-Infrastructure and procurement engineering.

"I am very excited to announce this new project with Deutsche Telekom. By combining our procurement activities, our customers will benefit from the best networks, improved services and the widest choice of devices across our footprint," said Olaf Swantee, Executive Vice President Europe and Sourcing at France Telecom-Orange. "The new joint venture will offer a more efficient sourcing organisation that will lead to more effective partnerships with suppliers. This will enable us to drive innovation and shape the development of technology in a way that meets customers' needs."

"Operators are expected to invest more than ever in networks and infrastructure as data usage increases exponentially and efforts to reduce the digital divide are being ramped-up," said Edward R. Kozel, Chief Technology and Innovation Officer of Deutsche Telekom. "With France Telecom-Orange we have an experienced and trusted partner who shares the same approach regarding economies of scale as well as customer benefits in technology harmonization."

DT and FT confirmed that they are also discussing collaboration in WiFi roaming, equipment harmonization, Machine-to-Machine (M2M) services and a set of new growth business development areas.