Deutsche Telekom finance head to become CEO at end 2013
By Maria Sheahan and Christoph Steitz | December 21, 2012 3:49 AM EST
Deutsche Telekom Chief Executive Rene Obermann will step down at the end of next year and be succeeded at the helm of Germany's former state telecoms monopoly by finance director Timotheus Hoettges.
Hoettges, 50, said on Thursday he was not planning major changes to strategy and would continue Obermann's drive of investing in the United States and Germany as the firm battles to return to revenue growth against a tough economic backdrop.
"I have worked with Obermann for 12 years, and I don't expect to change a lot in the way that we do things," he told journalists during a conference call.
This month, Deutsche Telekom announced a cut in dividends for the next two years by almost a third as its investment drive eats away cash.
European peers Telefonica, the Netherlands' KPN, Telekom Austria, and France Telecom had already cut their dividends earlier this year as the industry struggles with sluggish economic growth, costly investments and cut-throat competition.
Obermann, with Deutsche Telekom since 1998, became the youngest-ever chief executive of a German blue-chip company at the time when he took over in 2006 at just 43.
His image has been that of a low-key leader, eager to keep unions and politicians happy and wary of taking big strategic decisions.
One of his boldest moves was a deal to sell troubled T-Mobile USA to AT&T, but it collapsed last year amid concerns from competition regulators, dealing a blow to Obermann's reputation.
T-Mobile USA was a strong growth engine for Deutsche Telekom in its early days but is a rundown asset now that has been hemorrhaging customers for a while.
"This is the right time to prepare to pass the baton and ensure a smooth transition," said Obermann, 49, adding he was not being pushed out, and that he wanted a change.
He is going to work for a smaller company where he can be "closer to the engine room", he said, without giving details.
Exane BNP analyst Mathieu Robilliard said it looked like a personal decision.
"If the board or the main shareholders were unhappy about the CEO's performance, they probably would have appointed an outsider, not the CFO, who also has been responsible for what has happened at the company over the last few years," he said.
Hoettges promises to bring a fresh spark to Deutsche Telekom, as he is considered by analysts to have the energy to take on challenges and an ability to absorb knowledge.
Hoettges joined the group in 2000 after playing a central role in the merger of VIAG AG - where he was a member of the extended management board - and VEBA AG to form E.ON, now Germany's biggest utility.
He was promoted to finance chief at Deutsche Telekom in 2009 and, among other things, oversaw the move to put its British mobile business in a joint venture with France Telecom.
Hoettges said the company had not yet decided on a new finance director to replace him.
At 11:05 ET, Deutsche Telekom shares were up 0.6 percent at 8.633 euros, outperforming a 0.2 percent fall in the STOXX Europe 600 European telecoms index.
(Editing by Mark Potter)
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