DT confirms 3 Italia interest but refuses to comment on job losses

22 Oct 2007

German incumbent Deutsche Telekom (DT) is said to be considering a purchase of Hutchison Whampoa’s 3G networks within Europe for a reported EUR15 billion (USD21.5 billion). The Hong Kong-based company’s subsidiaries being eyed are those in the UK, Italy, Ireland and Austria. DT board member Hamid Akhavan, who runs cellular arm T-Mobile International, said that the company was ‘definitely interested in Hutchison operations in Italy.’ The German giant does not at present have any operations in Italy. Last month, UK newspaper The Times carried reports that Hutchison was considering the sale of its Italian 3G operation, 3 Italia, mentioning DT and France Telecom (FT) as potential buyers. 3 Italia is one of four cellular network operators in Italy and is Europe’s largest 3G operator, with more than 7.7 million subscribers, according to TeleGeography’s GlobalComms database, which also says that 3 claimed 13.6 million customers (across Europe and Australia) at end-March 2007, producing ARPU levels twice as high as those of existing T-Mobile operations.

Meanwhile, it has emerged that up to 35,000 additional jobs may be under threat at DT, on top of the thousands already being lost. The report appeared in German magazine Der Spiegel and cited internal documents calling for more job cuts. DT employed around 249,000 people at the end of 2006, 89,000 of them outside Germany. CEO Rene Obermann refused to comment on the figure, but did stress ‘the need to adapt and restructure’. DT is Europe’s biggest telecom firm by revenues but has lost large numbers of customers to rivals in the very competitive German market. Under the leadership of Obermann, who took over the top job last November, the incumbent is in the process of cutting 32,000 jobs by the end of 2008, and has hived off another 50,000 in the service sector. The company’s treatment of its staff led to a six-week strike in early summer this year over proposed pay cuts.

Germany, Italy, 3 Italia (H3G Italia), CK Hutchison, Deutsche Telekom (DT)