INTERVIEW wITh RALPH DOMMERMUTH
Mr. Dommermuth, how would you judge the past fiscal year 2023?
Positively. We continued to drive growth across the United Internet Group and once again achieved year-on-year improvements in our most important metrics – customer contracts, sales, and operating result.
In the Access division, the main focus in 2023 was on preparations for the successful launch of our mobile services in the 1&1 5G network. Our network is based on the innovative Open RAN technology. We laid the key foundations for this in the past year and connected it with all national and international networks, checked the functionality of our mobile services with external customer groups, and concluded an extensive 5G national roaming partnership with Vodafone. On December 8, we then activated mobile services in the 1&1 O-RAN – a significant technological achievement and a major milestone in our company’s history.
A major milestone was also achieved in the Applications division with the IPO of IONOS in February 2023. While IONOS is benefiting from further growth opportunities and continues to expand its strong position as a leading European digitalization partner and cloud specialist, our consumer brands GMX, WEB.DE and mail.com are also growing thanks to the increased use of artificial intelligence and attractive cloud services.
With the full operational capability of the 1&1 5G network, Germany once again has four mobile networks following the demise of E-Plus in 2014. It’s true to say that December 8, 2023 symbolizes a milestone in 1&1’s history and for the German telecommunications market. What motivated you to launch your own network – what is your vision?
1&1 has been a successful market player for many years now. It is simply in our DNA to constantly evolve, seize opportunities, and spearhead trends. We were ideally placed to launch our own mobile network: twelve million customers for initial utilization, access to 1&1 Versatel’s fiber-optic transport network to connect antennas and data centers, in-depth cloud know-how, strong brand equity, and well-established sales channels. And as a new network operator, we have a further key advantage: we can use the latest technology right from the start – fully virtualized, independent of dominant manufacturers, and ready for real-time applications. The 1&1 O-RAN is growing every day. Several hundred thousand new customers are already using it and the migration of millions of our existing customers to the new network is in full swing. With our own 5G network, we aim to increase our vertical integration in mobile communications, stimulate competition, and drive innovation. To put it simply: we want to make a difference.
Everyone in the mobile communications industry is talking about Open RAN. Even established network operators are looking to convert parts of their existing networks to the modern technology. How does Open RAN differ from conventional networks? And how does the new network architecture benefit mobile customers?
We closely monitored the activities in Japan of our current technology partner and Open RAN pioneer Rakuten right from the start. Rakuten has been successfully operating the world’s first mobile network based on the new technology there since April 2020. There is also a newcomer in the USA, Dish, which is building a cloud-native network. And 1&1 is the first Open RAN operator in Europe.
Whereas traditional mobile networks are often based on the products of a single manufacturer, we can work flexibly with the best and safest manufacturers thanks to our standardized interfaces. This means we are completely independent of dominant network equipment suppliers – such as Huawei. We already have over 80 partners and service providers on board. This puts an end to an anachronism in the mobile communications sector in which individual manufacturers supply closed systems, as there is no black box anymore with Open RAN. All network functions are controlled via software in a private cloud, which we operate from hundreds of regional edge data centers. These are connected to the antenna locations over short distances using fiber-optic cable. This network architecture enables real-time transmission speeds. This is because data is processed directly in the data centers on site and does not have to be first transported via the internet. Open RAN is the future – an opinion also shared by our competitors.
It's been more than a year now since IONOS rang the bell on the Frankfurt Stock Exchange. How would you assess your cloud specialist’s IPO from the current perspective?
Over the past few years, IONOS has made impressive progress and achieved a strong position as a leading European digitalization partner for freelancers, as well as small and mid-sized enterprises. The IPO was the right and logical next step to exploit the company’s tremendous growth potential. And the success is obvious: IONOS enjoyed good growth in 2023 and generated sales of over € 1.4 billion – 10% more than in the previous year. As the majority shareholder, we look forward to accompanying this success story.
„With its innovative Open RAN technology, Germany’s fourth network operator 1&1 is committed to making a difference in the German mobile communications market!“
RALPH DOMMERMUTH
What are your expectations for the fiscal year 2024?
We expect an increase in sales to approx. € 6.5 billion in the fiscal year 2024. Despite additional expenditure for our future topics, EBITDA is likely to grow to € 1.42 billion. We will continue to make strong investments, especially in the expansion of our fiber-optic and mobile communications networks. As a consequence, cash capex is expected to be 10 – 20% above the prior-year level.
As a European internet specialist with around 11,000 employees and over 68 million customer accounts, our aim is to actively shape the digital future. We look forward to the future opportunities and challenges that digitalization presents.