Sommer resigns from Telekom

Sommer: Blamed for Deutsche Telekom's huge debt and plunging stock price

BONN, Germany (CNN) -- Ron Sommer, the embattled chief executive of Deutsche Telekom, has stepped down after seven years at the top job at Europe's largest telecom group.

His decision came at the group's supervisory board meeting in Bonn, called to decide his fate after weeks of speculation that he would be forced out to take responsibility for mounting debt and plunging share prices.

"When the chief executive cannot rely on the full confidence of the supervisory board, resignation is the only responsible step left open," Sommer said after the meeting.

The departure of Sommer, 53, was expected to restore investors' confidence in Deutsche Telekom, which is 43-percent owned by the German government.

He is likely to be replaced by long-time group executive Gerd Tenzer.

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Shares in the group, which peaked at about $104 two years ago, have fallen 90 percent since Sommer went on a spending spree that left the former German monopoly with debts of 67 billion euros.

Deutsche Telekom (FDTE) shares were up 5 percent to 10.81 euros in late trading in Frankfurt.

Sommer -- who took over in 1995, one year before the group was floated -- had been under mounting pressure to slash debt, return Deutsche Telekom to profitability, and halt the plunge in the company's stock.

His tenure has also become a political issue ahead of German national elections in September. Chancellor Gerhard Schroeder's rivals are supporting millions of small investors who own stock in Deutsche Telekom.

With his resignation, Sommer joins other disgraced European telecoms chiefs, sacked for over-ambitious expansion strategies.

Jean-Marie Messier was deposed last month as chief executive of the world's second-largest media group Vivendi Universal (PEX). Peter Bonfield lost his job at Britain's BT Group (BT) and Paul Smits recently left KPN Telecom of the Netherlands.