T-Mobile chief to be Deutsche Telekom leader

Deutsche Telekom, Europe's biggest phone company, is poised to name Rene Obermann as chief executive after Kai-Uwe Ricke stepped down Sunday, said German media and a person with knowledge of the plans.

Obermann, 43, head of the T-Mobile wireless unit, accepted the job, and the board may approve his appointment today, said the person, who declined to be named.

The wireless unit's American operations, T-Mobile USA, is based in Bellevue.

Deutsche Telekom said Sunday it had reached a deal for Ricke to quit a year before his contract ends.

His departure comes four days after Deutsche Telekom said third-quarter profit dropped 20 percent as wireless earnings fell and the loss of fixed-line customers accelerated.

Deutsche Telekom, which is cutting 32,000 German jobs, trails European rivals in trimming positions as the Internet reduces demand for traditional phone calls.

"The new CEO will have to work hard on growing revenue in the domestic call business," said Colin Kingsnorth, a fund manager at London-based Laxey Partners, which owns more than $129 million of Deutsche Telekom shares.

"He needs to work out how much flexibility he has as a CEO in balancing the different interests of shareholders, the government and employees," Kingsnorth said.

Ricke is the second major CEO in Germany to lose his job in a week.

Volkswagen announced last Tuesday that CEO Bernd Pischetsrieder was being replaced.

At T-Mobile, Obermann was in charge of cutting expenses by nearly $1.3 billion and shedding 1,500 jobs.

In September, he was given the additional task of taking charge of sales and distribution for all Deutsche Telekom services in Germany.

Growth at the T-Mobile division is slowing as European markets become saturated and U.S. competition intensifies.

In the third quarter, T-Mobile's adjusted earnings before interest, tax, depreciation and amortization fell for a second period, and customer additions in Germany, the U.K. and the U.S. lagged behind analysts' estimates.

Ricke became CEO in November 2002, the day Deutsche Telekom posted Europe's biggest quarterly loss ever because of $28 billion in writedowns from predecessor Ron Sommer's purchase of high-speed wireless licenses and Bellevue-based VoiceStream Wireless.

Obermann joined Deutsche Telekom in 1998 and became a board member as well as head of T-Mobile in 2002.

He built the U.S. mobile division into Deutsche Telekom's fastest-growing unit by offering e-mail devices such as the BlackBerry.

T-Mobile USA, the fourth-largest U.S. wireless operator, last month announced plans to spend $2.7 billion on a high-speed network after paying $4.2 billion for licenses. The U.S. unit reported a 10 percent increase in third-quarter revenue.