Deutsche Telekom Appoints Mobile Phone Executive as New CEO

Telecom News Editorials Reports Glossary

Deutsche Telekom Appoints Mobile Phone Executive as New CEO

12:30 am on November 14, 2006 | Category: Business, Telecom Services, Corporate

Europe’s largest telephone provider, Deutsche Telekom, has replaced its CEO, Kai-Uwe Ricke, with Rene Obermann, who currently leads the company’s mobile phone division.

Obermann is being appointed for a five-year stint as Deutsche Telekom’s CEO, said Klaus Zumwinkel, who leads the telecom giant’s supervisory board.

“The market conditions for Deutsche Telekom will remain difficult,” Zumwinkel said after making the appointment. “It’s no secret that we are up against very strong competition, plus there are there are huge cost pressures and major technological changes.”

No official reason was given for Ricke’s departure as Chief Executive, but most analysts agree that the decision was brought on by pressure from shareholders after poor third-quarter financial results.

“It is clear that Ricke hesitated for too long before taking things in hand and saying firmly that Deutsche Telekom really needed to be reformed, if it was going to become a market leader,” commented analyst, Jürgen Kurz, on the change in leadership.

Obermann has said that, as the new CEO, he will focus on balancing quality customer service with a reduction in overall costs. Downsizing the company could be difficult however, since the German government, which still owns a third of the former monopoly’s shares, is reluctant to endorse any strategy involving job cuts.