Deutsche Telekom chief gets 5 years...longer as CEO

Tim Höttges (pictured) has been doing such a great job as chief executive of Deutsche Telekom that its board has voted to keep him on for another five years.

The German incumbent also announced that chairman Ulrich Lehner will not serve another term “for reasons of age”. The board has proposed appointing DHL chief executive Frank Appel as his replacement.

Höttges’ new deal will kick in when his current term expires at the end of 2023. In mobile technology terms, that means Höttges will oversee the maturation phase of Deutsche Telekom’s standalone 5G networks, and make preparations for the arrival of 6G, whatever that turns out to be.

“I really enjoy my work at Deutsche Telekom. It’s great that I can continue it beyond 2023. My curiosity, my willingness to change and my will to transform are unbroken,” Höttges said, in a statement on Wednesday.

When Höttges succeeded Rene Obermann as CEO in January 2014, Deutsche Telekom was under pressure both at home and abroad. In Germany, Telefónica had struck a deal to acquire E-Plus, which would turn it into the country’s largest mobile operator, while Vodafone was busy integrating Kabel Deutschland’s fixed broadband and TV assets. In one of Deutsche Telekom’s biggest international markets, the US, T-Mobile was making an aggressive comeback under the leadership of firebrand CEO John Legere. However, it had yet to overtake number three operator Sprint, which had a new lease of life thanks to its recent acquisition by Japan’s Softbank. In addition, Deutsche Telekom had also suspended dividend payments to help cover the cost of a €30 billion capex plan.

It is fair say that with Höttges at the helm, Deutsche Telekom deftly navigated these choppy waters. It was by no means plain sailing: an attempt in late 2014 to cash in on T-Mobile’s successful ‘uncarrier’ strategy and sell it to Sprint was blocked by US antitrust regulators. Talks with a different potential buyer, Dish, came to nothing. Deutsche Telekom had little choice but to hold onto T-Mobile US, and it has since proved to be a wise one. Continued strong customer growth had turned the unit into a cash cow that helped to ease the pressure in Europe. By 2018, T-Mobile US was in a position to make a $26 billion offer to acquire Sprint. With the Trump administration running things, the merger was waved through; the ink finally dried on that deal in April last year.

In Europe, early into his tenure Höttges also oversaw the sale of EE, its UK joint venture with Orange, to BT. A few years later, in 2017, he also struck a deal in the Netherlands to merge T-Mobile into a joint venture with Tele2. In September, following a strategic review, Deutsche Telekom and Tele2 agreed to offload their Dutch operation to a consortium of private equity funds for the princely sum of €5.1 billion.

Meanwhile, on the domestic front, he pushed forward with Deutsche Telekom’s ambitious LTE and FTTC coverage plan, successfully going toe-to-toe with newly-enlarged rivals Vodafone and Telefónica. Deutsche Telekom has also been aggressive with launching 5G and has now fully embraced fibre-to-the-premises, which has translated into customer growth in both the fixed and mobile businesses.

In its most recent financial report, Deutsche Telekom raised its guidance for full-year EBITDA after leases, thanks to particularly strong performances in both the US and Germany.

“I am very pleased that we will be able to retain Tim Höttges at Deutsche Telekom for longer than previously planned,” said outgoing chairman Lehner.

“Over the past almost eight years, Tim Höttges – together with his team – has modernised Deutsche Telekom and consistently focused it on a course of growth and innovation. In the process, they have always exceeded their targets. With skill, tenacity and assertiveness, Tim Höttges has made Deutsche Telekom the leading telecommunications company in Europe. We are delighted to be able to keep our front man,” he said.

“My thanks go to the supervisory board for the trust it has placed in me and, of course, to Deutsche Telekom’s employees and board of management,” added Höttges. “We have important tasks ahead of us, and I approach the next five years with corresponding humility and respect.”