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Author: Angel Dobardziev
6 December 2006
This morning Deutsche Telekom announced several changes to its top management team, following the appointment of new CEO Rene Obermann in place of Kai Uwe Ricke three weeks ago. Walter Razner the head of fixed unit T-Com is replaced by Timotheus Hoettges who will continue his responsibilities for T-Com and T-Mobile sales in Germany. Hamid Akhavan, T-Mobile's CTO, is taking on Obermann's former role as CEO of T-Mobile. Heinz Klinkhammer DT's Head of HR resigns for 'personal reasons' and his duties are taken on by CFO Karl Gerhard Eick.
Comment: With this move Obermann is effectively putting in place a team that will enable him to deliver on the task of re-energising Deutsche Telekom, particularly in its domestic operation, where most of its current problems lie. Here it needs to stem the loss of domestic fixed line customers, revive growth and reduce personnel costs.
The last task has been particularly tricky for Oberman's predecessor in light of German labour laws, strong unions, and the German state's 30% controlling stake in the operator. Ricke's attempts to deal with the problem by creating a separate lower wage service organisation, to which 45,000 employees would be transferred, clearly didn't go down well. It remains to be seen how Obermann tackles this key problem in light of these constraints.
Deutsche Telekom's sales and marketing machine at home has been fairly reactive and this is one of the reasons for its problems in the fixed line division, where it did 'too little too late' to deal with the issue of competition and mobile substitution. Hoettges will be expected to rapidly change this mindset, re-energise staff, and retain and grow customers. Only time will tell how successful he will be, but the outcome of his efforts will be a large factor in determining the success of Obermann's tenure.
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