​Microsoft and Deutsche Telekom team up on Lumia push for Europe

Microsoft has struck a deal with Deutsche Telekom that will see the operator sell Lumia and Office 365 to its roughly 90 million mobile subscribers across 12 countries.

Microsoft has struck a deal with German telecoms giant Deutsche Telekom to sell and promote Lumia smartphones and Microsoft's cloud services across Europe.

The new deal will build on one of Microsoft's brightest regions for Lumia smartphone sales, where shipments have helped consolidate Windows Phone's position in Europe as the solid third-placed smartphone OS behind iOS and Android.

Under the arrangement, Deutsche Telekom, the parent company of T-Mobile in the US, will jointly market Lumia smartphones as well Microsoft's cloud services such as Office 365 and One Drive to consumers and business in the 12 markets where Deutsche Telekom operates, including Austria, Croatia, Czech Republic, Germany, Greece, Hungary, Macedonia, Montenegro, Netherlands, Poland, Romania, and Slovakia.

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The deal comes at a critical time for Microsoft. According to analyst firm IDC, in 2014 Windows Phone shipments to Western Europe reached 9.9 million, accounting for 6.8 percent of total sales, up from six percent a year ago. But that still leaves it well behind Android and iOS and indeed well off on its own ambitions to have 15 percent share of worldwide smartphone shipments by 2017 - a figure that IDC believes it won't attain.

Still, the Deutsche Telekom deal will target markets where Microsoft has had better luck over the years, such as in Eastern Europe, where Windows Phone, driven by low-cost Lumia devices, outsold the iPhone in 2012 and 2013.

At the end of 2014, Deutsche Telekom had 56.7 million mobile customers in Europe not including the 38.6 million it counts in its home market of Germany, but the company's mobile handset sales were predominantly Android and iOS devices.

The latest sales figures from market research firm Kantar Worldpanel ComTech painted a mixed picture for Microsoft in Europe in the three months to January 2015. Across Great Britain, France, Germany, Spain, and Italy, Windows Phone's year on year sales growth was flat, leaving it with a 9.6 percent share of smartphone sales for the quarter. Sales in Germany, however, grew 2.1 percentage points to 8.9 percent.

Deutsche Telekom will kick off the partnership by marketing Microsoft's new mid-range Lumia 640 handset announced at this week's MWC trade show in Barcelona, Spain. The five-inch HD display Lumia 640 3G version costs €139, while the LTE equivalent is priced at €159 and goes on sale in April.

"Deutsche Telekom has been a Microsoft device partner since the beginning. Its trusted brand and network excellence in Germany and across key European markets will be a strong force to jointly deliver Microsoft devices and services to more consumers and businesses throughout Europe," Florian Seiche, vice president of mobile device sales in Europe at Microsoft, said.

The pair plan to add additional services to the line-up over time and Microsoft aims to make Deutsche Telekom one of its Windows 10 launch partners.

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