Deutsche Telekom's Obermann cedes control to Hoettges

Rene Obermann will be packing up his office as he clears the way for former Deutsche Telekom CFO Timotheus Hoettges to take control of Europe's third-largest operator by sales on Jan. 1, 2014.

Hoettges

After 16 years with Deutsche Telekom, seven of which as CEO and 11 on the board, Obermann has overseen a period of considerable change in the German and European telecoms industry, not least in the mobile market. It will now be up to Hoettges to take on the task of steering the German giant through the next phase, which is set to present several challenges on both sides of the Atlantic.

A major challenge will be the changes in Germany's competitive landscape. If Telefónica Deutschland gets approval from the European Commission to complete its €8.55 billion ($11.77 billion) acquisition of rival operator E-Plus from KPN, Deutsche Telekom will face a much stronger rival in its own backyard.

Meanwhile, rival Vodafone Germany has been busy implementing measures that it hopes will revive its fortunes, including the introduction of new services such as the all-inclusive Vodafone Red plans and quad-play plans that bundle together packages of fixed and mobile voice and data services. Indeed, Vodafone Germany has further strengthened its fixed assets in Germany through the acquisition of Kabel Deutschland.

Hoettges will also be at the helm of Deutsche Telekom when the European Union's single market for telecoms comes into force with controversial proposals such as the abolition of roaming fees and the introduction of net neutrality. Europe's largest carriers have also been calling for greater freedom to merge in order to achieve greater economies of scale. Like Obermann, Hoettges has been extremely vocal on the subject of consolidation and has called for new competition and antitrust rules.

Other strategic decisions will also have to be taken about the future of UK operator EE (which DT owns with Orange) and whether or not it should have an initial public offering, while T-Mobile U.S. could face bids from rival operators such as Sprint.

Although Hoettges is not expected to change the strategy set by Obermann in the immediate future, much has been written about the different personalities of the two executives and how Hoettges, described by Reuters as "straightforward, traditional and intense," is now the right man for the job.

Obermann is leaving of his own volition to take up the CEO role at Dutch cable operator Ziggo.

For more:
- see this Reuters article

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