Telekom Names New CEO

Obermann, 43, moves over from the company's mobile phone unit, T-Mobile, which he built into the most profitable unit in the group.

Without stating an official reason, Ricke, 45, resigned on Sunday under the pressures affecting telecommunications companies worldwide as customers desert traditional fixed-line technology for Internet-based calling or mobile phones. Ricke had been Telekom's CEO for four years and pared back the huge debts that brought the downfall of his predecessor Ron Sommer.

Ricke's departure was hastened when the group on Thursday reported a 34-percent fall in net earnings to 980 million euros ($1.26 billion) in the third quarter compared with the same period last year.

About 1.5 million fixed-line customers in Germany have left Deutsche Telekom to move to other operators already this year, while its mobile phone unit is expanding only thanks to its activities in the United States, where customers are signing up for T-Mobile USA's GSM digital wireless service.

The sudden swap at the top of the Telekom was traced by many observers to the April acquisition of 4.5 percent of Telekom by Blackstone, a US-based investment fund, which demands better value from companies it owns.

New CEO sees difficulties ahead

Obermann told a press conference at the company's headquarters in Bonn that Telekom faced a tough ride but was in good shape after an extensive cost-cutting program.

"The conditions remain difficult," he said, while praising Ricke's work in lowing the company's debts. "We face heavy competition and high cost pressures."

Telekom has not said who would replace Obermann at the head of T-Mobile.

Investors welcomed the change of helm. Telekom shares opened 2.3 percent higher at 13.44 euros on the Frankfurt exchange.