Kai-Uwe Ricke, Deutsche Telekom chief executive, on Sunday night resigned after losing the support of a broad coalition of big shareholders and labour unions.

Mr Ricke, 45, agreed to step down as of Monday, the Bonn-based company said in a statement. No replacement was named, but the German government and private equity firm Blackstone, which hold stakes of 32 per cent and 4.5 per cent respectively, want René Obermann, head of DT’s mobile phone operations, to take control of the group.

Klaus Zumwinkel, supervisory board chairman, Klaus Zumwinkel was on Sunday night planning to convene a special meeting of the 21 non-executive directors Monday to approve Mr Obermann as the successor approve the measures.

Mr Ricke has lost the backing of his shareholders due to poor results, while Verdi, the labour union, has turned on him for planning to move 45,000 jobs to lower-paying subsidiaries.

Germany’s co-decision-making corporate practice gives the union control of 10 board seats.

The differing motivations for getting rid of Mr Ricke show the poisoned chalice Mr Obermann will be picking up: shareholders demanding profits on the one hand and employee representatives bristling at resulting cuts.

Mr Ricke was four years into a five-year contract, with the supervisory board scheduled to discuss an extension from 2007 to 2012 at the start of December.

Although his future had been up in the air for weeks, signals that DT’s two biggest shareholders had agreed to oust him shocked senior executives at the company’s headquarters in Bonn.

Mr Ricke had spoken only on Thursday of a “turnround” at the fixed-line unit. Poor results had forced him to issue a profit warning and announce a restructuring in August.

Supervisory board members, including government and Blackstone representatives, have since discussed replacing him with a proven executive from abroad or Mr Obermann or Karl-Gerhard Eick, DT’s finance chief.

People who know DT said Mr Obermann looked like a compromise between doing nothing and appointing a foreign trouble-shooter – as touted by Blackstone – who could have put Berlin on the spot by cutting more jobs.

Mr Obermann has won plaudits for his work at T-Mobile, DT’s cash cow, but people who have worked with him questioned whether he would do anything very different from his long-standing mentor Mr Ricke.

A change at the helm would reignite speculation about T-Mobile’s US operations, the country’s number four player, the insiders admitted. Experts say it should be sold and the cash re-invested closer to home – to buy, for example, BT in the UK.

“If anything, Obermann loves T-Mobile US even more than Ricke does,” one executive told the FT. However, Mr Obermann would be likely to make some changes among the members of the management board.

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