Five months in and Ricke moves to allay DT investor fears

22 Apr 2003

Deutsche Telekom’s [DTEG.AS] chief executive Kai-Uwe Ricke is stepping up his attempts to comply with new regulatory measures and reduce debt at the company as he moves into his fifth month at the helm of the German telecoms giant. Ricke will launch a strategic review of all DT’s operations next month, following the publication of the group’s first quarter results on 15 May – predicted to be ‘very satisfying’ according to insider reports. The review is expected to be an informal process aimed at addressing investor concerns that Ricke has been too immersed in the deleveraging process at the expense of addressing fundamental strategic challenges, including the future of wireline business T-Com and cellco T-Mobile USA.

One fundamental challenge that DT is preparing for is the end of its near-monopoly on German local calls when the market is opened up this Friday. So far the telco has reached agreements with 19 rival operators to offer carrier pre-selection services over DT lines by adding a prefix to the number being dialled.

Ricke moved DT one step closer to its debt reduction target last week with the EUR560 million sale of 15% of its 40.1% stake in Russian mobile operator Mobile TeleSystems. The disposal means the chief executive has raised EUR4.96 billion from asset sales since his appointment last November, as he attempts to trim debt from EUR61.1 billion to around EUR50 billion by the end of this year.

Germany