O2’s German division awoke today to the sound of rolling heads, as owners Telefonica sacked the top management. CEO Rudolf Groeger, who left the company two weeks ago, was apparently forced out according to German press reports. Now the chief engineer, Alexander Roeder, is said to have been “on the death list for months, it won’t be long now.”

Roeder is accused of presiding over a rat’s nest of incompatible back-office IT systems, to say nothing of failing to match the competition in network coverage. Last year, eight per cent of all O2 Deutschland traffic was carried by T-Mobile under a national roaming agreement, which may have cost as much as EUR600 million.

Further, when the European Commission forced the carrier to cut its roaming rates earlier this year, Groeger reportedly said that it would “take months”to change due to the IT problems. The company planned to spend ó800 million on its network this year, but there have been reports of customers complaining about dropped calls in areas where they were previously unwitting T-Mobile customers.

Groeger’s replacement, Jaime Smith, is supposedly being sent to Germany with a brief to cut the payroll by 25-30 per cent; some 1,500 jobs. O2’s closest competitor, E-Plus, has two million more subscribers but half as many employees.