Shareholder pressure has finally forced the resignation of Deutsche Telekom’s chief executive, Dr Ron Sommer. The German government, which has a 43% stake in the company, initially put the heat on Summer after a spending spree resulted in debts of E67 million.
Dr Sommer announced his decision at a meeting of the company’s supervisory board yesterday. Helmut Siher has been appointed as interim chief executive and promised that DT would pursue a ‘vigorous consolidation course’ in the next few months.
Shares in Deutsche Telekom, which were once valued at over E100, have recently fallen as low as E10, less than their price at privatisation.
Analysts are suggesting that any restructuring programme is likely to involve the sale of VoiceStream, the US mobile phone company, which was bought for $28 billion only last June.
There is also growing speculation that Liberty Media will make a second attempt to purchase DT’s six regional cable TV businesses. An agreed E5.5 billion bid was blocked by the German Cartel Office earlier this year (see German Regulators Block Liberty Cable Deal).
