Telekom CEO Replaced

Since the Deutsche Telekom went private after breaking off from the former Deutsche Bundespost, none of its CEOs has ended their term in the usual way.

Kai-Uwe Ricke's father, Helmut Ricke, threw in the towel early because he was tired of the political squabbles. His successor Ron Sommer also had to resign prematurely and now Kai-Uwe Ricke is facing the same fate as his predecessors.

The majority shareholder, the supervisory board, is unsatisfied with the company's development and is replacing the top management. However, it can practically be expected that Ricke's successor, T-Mobile boss René Obermann, will end up in the very same position.

Demanding the impossible

The supervisory board and the shareholders are demanding the impossible from the head of the former telecommunications monopoly. On the one hand, competition in the telecommunications market is politically desirable. This has led to unprecedented growth in the sector and provided the consumers with more options and lower prices.

On the other hand, competition in a market that used to be controlled by a monopoly can only be a burden to the monopolists.

If the minister of finance, who still owns nearly a third of Deutsche Telekom's stock, continues to expect soaring profits and rising stock values, this is sanctimonious at the least. After all, he should know better.

Excess staff can't be terminated

Ricke's successor is in the same trap as his predecessors. He is stuck between a giant, immobile apparatus with an army of civil servants who can't be dismissed and the pressure to be just as agile and streamline on the market as the newcomers.

At the same time the Deutsche Telekom CEO is not supposed to announce any operational layoffs.

The newcomers in the sector have grown organically and built up an adequate personnel base. They don't have superfluous staff left over from the state monopoly.

This burden has visible consequences. All the newcomers were and are obliged to rent network infrastructure from the former monopolists. A supervising authority, the Federal Network Agency, insures that the former monopolists offer the infrastructure at cost and don't pull in a disproportional profit. All of the other providers have similar cost structures.

The newcomers have made more of the situation than the former monopolists. This can be attributed for the most part to Deutsche Telekom's massive surplus of employees. Immobility and inefficiency also play a major role.

Package offers are the winning ticket

The newcomers are simply closer to the customers. They recognized early that fixed line networks, cellular phone networks and Internet service are growing together. They were developing inexpensive combination offers for the customer while the heads of the different Telekom sectors were still in conflict with each other.

Now -- much too late -- Deutsche Telekom has also started offering package options. But the competition is already ahead.

In any case, the new Telekom CEO has an unenviable task before him. As long as the supervisory board continues to demand he square the circle, he will fail -- just like his predecessors.

Rolf Wenkel is a business expert at Deutsche Welle Radio.