Update: Obermann named DT chief

The supervisory board of Deutsche Telekom decided to immediately appoint Rene Obermann as new chief executive officer on Monday afternoon, following the resignation of former head honcho, Kai-Uwe Ricke.

Obermann joined the board of management at the German carrier in 2002 and has since headed up T-Mobile International, the carrier’s mobile arm.

Ricke, resigned from the state owned German carrier on Monday morning. The company gave no reason for the CEO’s departure, but the move follows disappointing third quarter results. Shares were up 3 per cent following the Monday morning news.

In recent months, the company has been rocked by rumours of shareholder revolt which made Ricke’s future at the firm look increasingly doubtful. His contract with DT was originally set to expire in the autumn of 2007.

In August, Deutsche Telekom reduced revenue guidance for 2006 by Eur600m (£405m) on the back of aggressive competition in its domestic market. Last week the company reported that net profit for the third quarter fell 20.4 per cent year on year to Eur1.9bn (£1.3bn) from Eur2.4bn a year ago, while revenues increased just 2.8 per cent to Eur15.4bn.

Dan Bieler, research director at Ovum, believes that Ricke was pushed out over three interrelated issues – the loss of ground to competition in its domestic fixed and mobile markets, his unpopular headcount reduction programme, and a flagging share price that remains below the issue price of its 1996 IPO.

Bieler also questions how replacing the CEO sends a message of continuity, “we would have thought that a conscious choice for discontinuity would be behind such a move,” he said.

“Be that as it may. The new CEO will have little more room for manoeuvre than Ricke. Given the new product portfolio and changes to the delivery and sales channels, the focus must now be on a mammoth task: the migration towards a next generation network environment,” he said.