Bloomberg News

Deutsche Telekom in Talks With Manufacturers Over Smart Homes

October 06, 2011

Oct. 6 (Bloomberg) -- Deutsche Telekom AG is in talks with Asian and U.S. makers of electronic devices and appliances about a co-operation to boost services that manage data exchange between household devices such as TVs and washing machines.

Europe’s largest phone company, which aims to make 1 billion euros ($1.3 billion) in sales by 2015 from such machine- to-machine services, is in talks with “big name” companies, including makers of entertainment electronics in Japan and South Korea, Gabriele Riedmann de Trinidad, the head of Deutsche Telekom’s energy unit, said in an interview in Kiel, Germany. Getting these high-caliber partners would be a “giant step” for the platform, she said, without naming them.

So-called smart home services, where machines use networks to exchange data and users can access and operate electrical appliances from anywhere, are part of Deutsche Telekom’s strategy to counter declining sales from traditional voice calls with new offerings. Riedmann de Trinidad says deals with well- known manufacturers are necessary to drive awareness among consumers and competitors.

“We have a long list of companies that are interested in working with us,” she said. “It’s an evolution, and that makes it important that large, big-name manufacturers get onto our platform to drive things forward.”

Under the name T-City, Bonn-based Deutsche Telekom is already running pilot projects that include smart metering to help utility companies measure and control energy consumption and delivery; and health projects such as instant communication of insulin readings to physicians.

Competition

Operators are in talks with manufacturers “to let them know what is possible for them to do, if they would incorporate that technology into their devices,” Jamie Moss, an analyst at Informa Telecoms and Media, said via phone. “It’s a good opportunity for long-term revenue for the operators. The amount you make per connection is not going to decline over time.”

Other technology companies are pushing into the home appliance and energy-control market as well.

Cap Gemini SA, Europe’s largest computer-services company, and Intel Corp., the world’s biggest chipmaker, in February said they would offer a home energy-management system to consumers and utilities as the companies enter the market for power-saving upgrades to electric grids.

Momentum

Google Inc., owner of the world’s most popular search engine, in June said it would retire its PowerMeter service, which gave consumers simple access to their energy use, as the company’s “efforts have not scaled as quickly as we would like.” At the same time, Google said “momentum is building toward making energy information more readily accessible, and it’s exciting to see others drive innovation and pursue opportunities.”

German utilities EON AG, the country’s biggest utility, and EnBW Energie Baden-Wuerttemberg AG as well as appliance maker Miele & Cie KG and electronic device maker eQ-3 Holding AG have so far joined Deutsche Telekom’s Smart Connect standard. Deutsche Telekom would also welcome other telecommunications companies and cable companies to join, Riedmann de Trinidad said.

Private customers in Germany will be able to buy the Sumitomo Electric Industries Ltd.-made Smart Connect Box, which functions as the central control device, from mid-2012.

Deutsche Telekom has an advantage over other phone companies or companies because it combines telecommunications networks with its information-technology expertise and direct access to consumers, Riedmann de Trinidad said.

--With assistance by Jonathan Browning in London and Matthew Campbell in Paris. Editor: Simon Thiel, Kenneth Wong.

To contact the reporter on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong in Berlin at kwong11@bloomberg.net


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