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Deutsche Telekom Gets a New CEO

13th Nov 2006, 18:33 GMT

Deutsche Telekom AG named Rene Obermann, the head of the company's T-Mobile wireless division, as its new chief executive on Monday. Europe's biggest telecommunications company by sales announced the decision following a meeting of its supervisory board and after CEO Kai-Uwe Ricke tendered his resignation after four years in the top job. The Bonn-based company said in a statement that its supervisory board decided to appoint Obermann as chief executive officer, effective immediately. Shares of Deutsche Telekom were up 2.9 percent at EU13.52 (US$17.35) on the Frankfurt exchange after the announcement. Klaus Zumwinkel, chairman of the supervisory board, which is the equivalent of a board of directors, said Obermann, 43, would serve well in keeping costs contained and moving the company forward. "Rene Obermann is a strong entrepreneurial leader with over 20 years experience in an industry that is characterized by fast technological changes and constant new challenges in the market," he said. "His career has a strong international influence, particularly through the successful internationalization of T-Mobile. Customer focus and service are of high priority to Obermann. At the same time, he will continue managing costs effectively." German Chancellor Angela Merkel, whose government still owns about 32 percent of the former telephone monopoly, said she expected that Telekom will operate "successfully." "This is good for people and for the employees," Merkel told reporters in Berlin. "In this sense I wish Mr. Obermann all success." T-Mobile has been one of Deutsche Telekom's bright spots, mainly through strong growth in the U.S. in recent years. While with T-Mobile, Obermann helped cut expenses there by EU1 billion (US$1.3 billion) and oversaw the elimination of 1,500 jobs. But analysts wondered if Obermann, who was often viewed as a protege of Ricke, would face similar scrutiny as the company seeks to stem its falling profits and lagging sales in face of increased competition in...

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