At the heart of the A1 Telekom Austria Group’s corporatestrategy is the common purpose of “Empowering digitallife” – both at work and at home – with best-in-classconnectivity and innovative digital solutions.
Digitalization opens up enormous opportunities for economic growth, social andindividual development and for a more sustainable way of life in the interests ofpeople and the environment. It therefore plays a major role in the A1 TelekomAustria Group’s vision and strategic focus.
Vision: Empowering digital life
The fact that the A1 Telekom Austria Group has far more to offer than “traditional”telecommunications services is also reflected in its vision and common purposeof “Empowering digital life”. Its self-conception has long since gone beyond justproviding infrastructure, connectivity, and bandwidth. It sees itself as a driver andpartner in the course of digitalization, with the expertise to create and foster digi-tal business models and solutions from initial concept through to operation. TheA1 Telekom Austria Group is convinced that a winning end-to-end customer ex-perience is the foundation for successfully pursuing its corporate strategy. Thisoffering extends from attractive tariffs and product bundles to content, entertain-ment, and smart home solutions through to state-of-the-art ICT, cloud, security,IoT, and productivity solutions.
In the course of its transformation into an ideal digitalization partner, the A1Telekom Austria Group has dedicated itself to greater efficiency, agility, flexibility,security, and sustainability. Sustainability is seen as a long-term value driver that,in addition to active ecological and social responsibility (see “Social andEcological Responsibility”), also entails economic benefits – for instance withenhanced energy efficiency reducing both environmental impact and costs.
Under its growth strategy, the Group does not only rely on its lead-ing role in the CEE region. As part of América Móvil, it can alsocount on the strength of one of the biggest telecommunicationsproviders in the world with around 276 million customers in
mobile communications and 84 million fixed-line RGUs
In pursuing its vision of “Empoweringdigital life”, the A1 Telekom AustriaGroup applies a corporate strategybased on two pillars: revenue growthand excellence in execution.
In striving for revenue growth, corporate strategy is focused on three core ele-ments: excel in the core, expand the portfolio, and targeted M&A.
Excel in the core
The A1 Telekom Austria Group is focusing on the intensification of sales and tar-geted cross- and upselling to optimize its core business. A key goal of this is togain households that have already been covered technically as customers, andthereby to optimize the ratio of households reached to those connected. Conver-gence is another central link in ensuring a premium customer experience, withthe Group already offering fixed-line and mobile services in six of its seven coremarkets. Excellent infrastructure remains a key feature that sets the Group apartand gives it an edge over the competition.
A convincing example of how to excel in the core, but also offacilitating synergyeffects and best possible group-wide leverage of existing assets and capabilities(“One to all”) is the stepwise roll-out of the A1 brand across all of the Group’s op-erations depending on local circumstances. Following the rebranding in Sloveniaand at the level of the international Group brand A1 Telekom Austria Group in theprevious year, 2018 followed up with the implementation of A1 at the Bulgarianand Croatian subsidiaries and an A1 brand refresh in Austria.
Expand the portfolio
Diversification and differentiation from competitors are of crucial significance.This demands the courage to innovate and to be creative. In keeping with its vi-sion of “Empowering digital life”, A1 Telekom Austria Group aims to be the firstpoint of contact and key partner for the digital transformation of companies, andto tap new potential in digital services, such as cloud, security and ICT solutionsand in the field of the Internet of Things (IoT). Founded in 2017, the goal of theaffiliate A1 Digital (see “Technology and Innovation”) is to foster the growth po-tential this entails beyond the existing footprint.
In its residential business, the Group is increasingly focusing on innovations relat-ing to its core business with solutions for entire households, such as convergentproduct bundles that combine TV and music streaming services and that can beexpanded to include smart home and cloud solutions. The content offering isalso playing an ever more important role, which is why the A1 Telekom AustriaGroup selectively invests in content rights, platforms and its own production inline with the respective market circumstances and customer requirements. Solu-tions tailored to the respective market allow the Group to augment the customerexperience, promote customer loyalty and keep investments and costs at an effi-cient level at the same time.
Alongside measures for achieving organic growth, the A1 Telekom Austria Groupwill continue to expand its sphere of activity with targeted, value-accretive acqui-sitions. The focus of its core business remains on existing markets, pursuing itsconvergence strategy and subsequently opening up new markets.
In addition, A1 Digital is opening up new potential in the field of digital services,for instance, with its 2017 acquisition of the Swiss company Exoscale, which pro-vides infrastructure and services for cloud applications in Europe.
Excellence in execution
To ensure the availability of financial flexibility for investment, operational excel-lence in the execution of corporate strategy is essential. The central tenets of thisare continuous improvements, digital transformation and “One to all”.
All structures, processes and investment decisions are continuously evaluated,questioned and improved. The A1 Telekom Austria Group’s goal is to improve itsefficiency every single day.
Investments of any kind require that either revenues can be generated or costscan be reduced. In line with this, the Group deliberately invests in technologiesthat enhance efficiency and preserve resources.
Digital transformation is a central precondition for the future success of the A1Telekom Austria Group, and therefore a key strategic concern, which is why aDigital Transformation Center of Excellence (CoE) was created in 2018. Its goal isto advance digitalization both internally (“Digitalizing Ourselves”) and externally(“Digitalizing the Customer Journey”) in order to successfully help shape businesstrends and to identify and satisfy market requirements early on.
One to all
Across all markets, the goal of the A1 Telekom Austria Group is not to develop newproducts and solutions again and again, but rather to develop them once and rollout successful solutions on all markets. This is applied to both internal processesas well as to product developments. A good example of “One to all” is the group-wide development of the music streaming service “A1 Xplore Music”.
A good example of “One to all” is not least the group-wide roll-out of the A1 brand(see “Excel in the core”).
Finance strategy and cash use policy
The A1 Telekom Austria Group pursues a conservative finance strategy with a sol-id investment grade rating of Baa2 from Moody’s and BBB from Standard &Poor’s at its core. This orientation ensures a solid balance sheet structure withmoderate leverage (net debt to EBITDA) and financial flexibility for investments inorder to make use of growth opportunities. The dividend policy aims for a sus-tainable dividend distribution with the potential to grow in line with the opera-tional and financial performance of the Group. For the financial year 2018, theManagement Board intends to propose a dividend of EUR 0.21 per share to theAnnual General Meeting on May 29, 2019.
The sustainability strategy of the A1 Telekom Austria Group is geared towards ac-tive ecological and social responsibility, promoting more efficient, resource-friendly and thus more sustainable ways of working and living (see “Social andEcological Responsibility”). Furthermore, sustainability is seen as a long-term val-ue driver in an economic sense since greater efficiency and reduced use of re-sources also entail positive cost effects.
The A1 Telekom Austria Group’s responsibility concept is built on the three-pillarmodel of sustainable development, the triple bottom line of “people, planet, prof-it”, and therefore also incorporates social, ecological, and economic aspects.The A1 Telekom Austria Group also engages in targeted activities in support ofthe United Nations’ Sustainable Development Goals (SDGs; see “The A1 TelekomAustria Group’s contribution to the Sustainable Development Goals”) that wereissued in 2015. The Group’s sustainability strategy is focused on four action ar-eas derived from a materiality analysis last updated in early 2017 (see graphic“Materiality matrix”). Each action area is backed by clear targets and specific per-formance indicators.
The A1 Telekom Austria Group’s continuous dialog with its stakeholders occurs atthree levels: through systematic information via various channels, through talksand surveys, and through membership in associations and cooperations. Differ-ent formats are used depending on the issue and the group, such as informationevents, idea contests, customer and employee surveys or in-person talks at meet-ings, conferences, or roadshows. ▬
The Digital Transformation Center of Excellence(CoE) focuses on the following three key strategicaspects:
▸Marketing automation propels digitalcustomer interaction and allows targeted andsuccessful communication with customersthrough efficient tools and processes.
▸Process automation drives the optimization ofinternal processes by simplifying, harmonizingand automating processes using smart systems(e. g. chatbots, robotics solutions).
▸Big Data, analytics & artificial intelligencelare building the foundation for the group-wideuse of smart automation solutions byimplementing a central data architecture andinfrastructure.
DIGITALTRANSFORMATION& CENTER OFEXCELLENCE (COE)
Initiatives A1 Telekom AustriaGroup (excerpt)
▸Diversity Charter (since 2014)
▸Next Generation Mobile Networks Alliance(since 2014)
▸UN Global Compact (since 2012)
▸ETNO (since 1996)
▸GSM Memorandum of Understanding
Action areas in the field of sustainability
By providing the technologicalbasis and educational offeringsfor equal, digital access toinformation, education andknowledge, A1 Telekom AustriaGroup not only serves as a re-sponsible member of our soci-ety, but also as an element thatbridges gaps.
Technology and Innovation
In its role as a driver of digitali-sation and beyond the provisionof connectivity and bandwidth,A1 Telekom Austria Group pro-vides entire industries, businessmodels and societal as well aspersonal areas of life with awide range of positive develop-ment possibilities.
Digitalisation is accompaniedby a profound change of thefoundations and methods ofworking. This includes the ques-tion of how employees interactwithin the company as well aswith customers, suppliers andother stakeholders. A1 TelekomAustria Group actively promotesthe skills required for this.
Information and communica-tions technologies can con-tribute to a more ecological andthus sustainable lifestyle. This isbecause it is important to findinnovative solutions to chal-lenges such as climate change.
Bubble size represents business relevance for A1 Telekom Austria Group.
A topic’s importance is based on its impact on the environment, society and the economy as well as how relevant it is to A1Telekom Austria Group’s stakeholders. Thus, the topics most important to A1 Telekom Austria Group are those that have thebiggest impact and those that are most relevant to the stakeholders. As an additional dimension, the topics were assessed withregard to their business relevance for A1 Telekom Austria Group. This allows a perspective that takes into account the topics’sustainability context and their economical significance for the company.