Deutsche Telekom CEO admits big telcos are ‘arrogant’

Being a big fish can be financially rewarding, but it seems it’s not always satisfying. Just ask Rene Obermann, the CEO of Deutsche Telekom, the owner of T-Mobile and one of the larger telcos in Europe and the U.S. – who apparently finds the company’s size frustrating.

“Large companies tend to be very complacent and arrogant,” Obermann told an audience at German incubator HackFWD‘s Build 10 event in Berlin on Friday. “I preach a lot in the company about bringing external innovation in and working with smaller companies.”

Bear in mind that Obermann was talking to a roomful of smaller companies, some of whom he may want to cut deals with in the future. But if there was an element of pandering in his words, there was also a certain wistfulness — and an admirable frankness.

“Sometimes I miss the speed of decision making in my own company – it’s very big,” he said. “Sometimes I miss the ability to be very informal and fast and the fact that we can’t [take] decisions based on pure intuition.”

That’s an interesting point. Indeed, as the suspicious responses to the launch of Telekom’s hub:raum incubator scheme showed, the telco has quite a reputation for being and difficult to work with.

But then again, being a behemoth isn’t all bad.

“What I like about the large corporations is they have a big lever,” Obermann pointed out. And in order to fondle that lever, he recommended, small firms should have patience.

“It’s about having access to large distribution and a large customer base. In order to cooperate successfully with large companies, you need longer timeframes. They also have to make priorities. We have legacy IT systems… sometimes you need a [slightly] longer lead time if you work with a large elephant. But be persistent if the corporation really matters to you. Once the decision is taken, usually it can be very powerful.”

So how does Deutsche Telekom find the right small firms to partner with? Hub:raum is one option, but there is also room for an ‘easy’ partnership program that is “more theory than practice so far,” said Obermann. “But we’re committed to making it happen.”

Beware disruption

Obermann admitted that Deutsche Telekom was “under pressure, primarily because of IP substitution.” And also because of regulators forcing roaming fee cuts, but mainly because of the same disruptive, smaller companies he also lauded.

“If it’s really disruptive, which means it threatens parts of the organization that might cannibalize themselves and lose jobs, you will have to engage at a more senior level,” Obermann advised. “But not all innovation is disruptive – most innovation is helpful.”

That gives the impression that Deutsche Telekom wants to do business with startups that are useful but not too useful.

It’s a stance that’s understandable but risky in its own way. IP substitution isn’t going to go away, and telcos such as Deutsche Telekom are going to have fight like crazy to stop themselves becoming ‘dumb pipes’. Obermann was hustled away by his minders before I could get his thoughts on rival Telefónica’s all-IP Tu Me voice and text app, which is as disruptive as hell and — incredibly — comes from the Spanish company’s own labs.

Tu Me is a gamble too, of course, but the same could be said of seeing disruption as unhelpful, rather than something to be embraced.

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