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Ricke: Tough road ahead for CEO
FRANKFURT, Germany -- Kai-Uwe Ricke, unanimously appointed as the new chief executive of Deutsche Telekom on Thursday, faces a daunting task of rebuilding the fortunes of Europe's biggest phone company. Ricke, 41, is taking over the position of Ron Sommer, who was ousted in July as the company's shares slid and debts mounted. Helmut Sihler had been acting as interim CEO since then. "Ricke is clearly an insider, he's been with the company since 1998. He's been doing a pretty good job at T-Mobile, in Germany and internationally. His experience is extensive in the telecom sector," Bank of America's Mathieu Robilliard told CNN. Ricke has served as the head of T-Mobile, Deutsche Telekom's wireless division, since 1998 and was instrumental in getting the company to invest in third-generation wireless technology.
Before joining T-Mobile, he was managing director of the Talkline -- a German telecommunications company and a subsidiary of Tele Danmark -- where he was responsible for the strategic focus as well as the company's sales, marketing and international affairs.
He studied in the U.S., France and Japan and attended a vocational training course in banking before earning a business administration degree. His father, Helmut Ricke, was the former head of Deutsche Telekom when it was a wholly state-owned corporation. The German government still retains a 43-percent stake in the group. As new chief executive, Ricke's primary task will be reducing the company's 64 billion euro debt to 50 billion by the end of next year. Deutsche Telekom has entertained the thought of selling its U.S. mobile unit T-Mobile USA, formerly known as VoiceStream, which it bought for about $30 billion in 2001. But on Thursday, the group said it would not sell or merge the U.S. unit. The announcement came as Deutsche Telekom posted the biggest loss in German corporate history as it wrote down 33.4 billion euros on the value of its mobile phone businesses. (Full story) By keeping T-Mobile USA, it will still need to find four to 7 billion euros to hit its debt target of three times annual core earnings by the end of 2003. Sommer, 53, resigned after going on a spending spree that left the former German monopoly with debts of 67 billion euros. He joined other disgraced European telecoms chiefs, sacked for over-ambitious expansion strategies. Jean-Marie Messier was deposed in June as chief executive of the world's second-largest media group Vivendi Universal. Peter Bonfield lost his job at Britain's BT Group and Paul Smits recently left KPN Telecom of the Netherlands. Ricke, married with two children, begins his new role on Friday.
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