Deutsche Telekom has named its new chief executive and announced a loss of €24.5 billion for the first nine months of this year, the biggest loss in European corporate history.
Mr Kai-Uwe Ricke (41), head of the company's mobile phone division, was the unanimous choice of the supervisory board to lead the troubled telecommunications giant and reduce the company's €64 billion debts.
The company said yesterday it hoped to reduce its debts to at least €52 billion by the end of next year, some way off its previous target of €50 billion.
"In order to achieve this target, Deutsche Telekom intends to withdraw from non-strategic business areas such as real estate, the remainder of the cable business and other shareholdings and business units," it said, adding that these sales should generate up to €8.5 billion. The company has also decided not to issue a dividend this year and to reduce capital expenditure to between €6.7 billion and €7.7 billion next year.
Telekom has decided against selling off its US subsidiary Voicestream, now known as T-Mobile USA, at least for the moment.
The company plans to cut onefifth of its workforce, around 46,000 jobs, in the next three years but faces trade union opposition.
The €24.5 billion losses announced yesterday were largely caused by one-off write-downs designed to give Mr Ricke a clean slate. Excluding one-off items, the company lost €4.2 million in the January-September period against a loss of €2.8 billion a year ago.
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