T-Mobile head set to become CEO at Deutsche Telekom

Our City Staff
Saturday 09 November 2002 01:00

The German telecoms giant Deutsche Telekom is expected to name Kai-Uwe Ricke, the current head of its mobile phone division, as its new chief executive next week.

Europe's biggest telecoms operator has been seeking a permanent head since Ron Sommer was ousted under pressure from the government in July after concerns about its debt and strategy helped push its shares to record lows.

The interim chief executive Helmut Sihler told staff this week that the evaluation of candidates for the top job had been completed and the results would be presented to the supervisory board at a meeting on 14 November.

As Telekom's chief operating officer, Mr Ricke is also responsible for its internet service provider T-Online. Mr Ricke, 41, is the son of Helmut Ricke, former head of the state post and telecoms monopoly.

Deutsche Telekom is also due to report its third-quarter results and present the results of a strategy review that will address its debt reduction plans and prospects for its loss-making US mobile operation.

Banking sources say the group has talked to US mobile operators including Cingular Wireless and AT&T Wireless about an alliance for its T-Mobile USA business, acquired last year for more than $30bn.

The new chief executive will have to press ahead with restructuring, cost cutting and asset sales to bring Telekom's €64bn (£40.7bn) debt burden under control.

Mr Sihler has already instituted a wide-ranging, cost-cutting plan aimed at chopping debt to €50bn euros by the end of next year, moving forward with the planned sale of the group's cable TV assets and stepping up job cuts that could see a fifth of its 240,000-strong workforce gone by 2005.

Deutsche Telekom and the German finance ministry, which still holds 43 per cent of the former monopoly's shares, declined to comment on whether Mr Ricke would be the next chief executive.

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