By Darrell Etherington
A changing of the guard at Deutsche Telekom (OTCQX:DTEGF), owner of T-Mobile and one of the world’s biggest telecoms carriers: René Obermann is stepping down as the CEO and will be replaced by the carrier’s current CFO, Timotheus Höttges. The change will take effect at the end of 2013, a decision that was approved by the Board today in a meeting, the carrier announced today.
The decision to leave was Obermann’s, the carrier said. He’d been with DT for 16 years, seven of which were spent as CEO, with a period before that running the company’s most high-profile division, T-Mobile.
While it may sound like a slow march to innovation death for a CFO to be taking the helm at DT, Höttges has actually cut his teeth in some of DT’s most strategic moves. He is said to have been instrumental in pioneering the carrier’s “Everything Everywhere” joint venture with France Telecom — a move that will, yes, help both carriers save some money, but also paves the way for how carriers can better collaborate to speed up their own ability to respond to technology changes and market demands. Although the UK is one of the most mobile-forward countries, it’s been a relative laggard when it comes to LTE. EE, as the JV is now known, has pushed the agenda on that with an innovative spectrum plan, and now the country has finally moved into the 21st century of mobile communications.
He also played a large part in the prosposed acquisition of T-Mobile USA by AT&T (NYSE:T), and while that ultimately fell apart, it did result in Deutsche Telekom being paid a considerable break-up fee worth a total of $6 billion.
Obermann’s decision to leave was apparently met with regret by the Deutsche Telekom Supervisory Board. For his part, Obermann cited a desire to pursue activities which would allow him to have “more time for customers, for product development and for technology.” He hopes to focus on “entrepreneurial activities” that wouldn’t be possible for him to pursue in his role as CEO of the multinational telecommunications company, the statement says.
Deutsche Telekom expressed a belief that it could halt declining revenues by 2014 in the official release detailing the news, and return to growth, with plans to invest in network-building efforts in Germany and the U.S. to help kickstart that turnaround. Early in December, Deutsche Telekom was said to be considering further job cuts in Germany to help it meet its future financial targets and bump up profitability, according to a Bloomberg report. Planned cuts for 2013 include reductions in external service personnel, the report claims. Recently, the company reported flat revenue and an $8.8 billion loss owing to an accounting write-down resulting from its failed T-Mobile acquisition.
The management change isn’t exactly a huge shakeup – there will be a year’s worth of time to make the transition as smooth as possible, and Obermann’s replacement is an insider with whom Obermann worked closely for the last three years. Still, it’s a significant change for one of the largest players in the mobile wireless industry, and we’ll be watching to see what impact it has on Deutsche Telekom’s fortunes.