Telekom Appointment Answers the 28 Billion Euro Question

The person who has stepped into the rather troubled shoes of former Deutsche Telekom boss Ron Sommer and will tackle the company's financial problems is Kai-Uwe Ricke, the head of the company’s mobile phone and online division, until recently.

A vote by the board of directors on Thursday ended the sweepstake on who becomes the company's new CEO as they handed the 41-year old the reins of one of Europe's biggest telecommunications concerns.

Ricke's father was former Telekom chief

Born in 1961, Ricke was immediately immersed in the family business. His father Helmut was a former head of Germany's once state-owned telecom and postal service monopoly and Kai-Uwe was destined to follow in his footsteps.

Following bank training and studies at the European Business School at Schloss Reichartshasen, Ricke started his professional career as assistant to the board of Bertelsmann AG in Gütersloh, and went on to become Head of Sales and Marketing for its subsidiary, Scandinavian Music Club AG, in Malmö, Sweden.

From 1990 until June 1995, Ricke was Managing Director of Talkline and Talkline PS Phone Service, both of Elmshorn near Hamburg. Until December 1997, Ricke guided the affairs of Talkline as its managing director and board spokesman.

Respected, competent colleague joined Telekom in 1998

He joined Deutsche Telekom in 1998 and served as chief operating officer for the company’s mobile phone and online activities. He has a good reputation amongst colleagues who regard him as competent, and analysts believe Ricke is also popular among the workers’ representatives, who comprise half of the supervisory board’s members and who are well known to an internal candidate.

Ricke has seen off competition from a number of top European candidates including the head of Deutsche Post AG, Klaus Zumwinkel, the head of Porsche AG Wendelin Wiedeking and Swisscom boss Jens Alder.

However, Ricke's appointment may cause some ripples within the company. His philosophy is considered by many of the investors’ representatives on the board as being too close to that of former CEO Ron Sommer, the man who hand-picked Ricke to head the mobile operation.

Critics point to support of ill-fated VoiceStream deal

His critics are also quick to raise the point that Ricke firmly supported Sommer’s ill-fated acquisition of U.S. mobile operator VoiceStream in 2001. The VoiceStream deal is regarded as one of the main contributors to the company’s huge debt and the recently reported record loss of 28 billion euro ($28.29 billion). Many wanted the dead wood of the Sommer era to be cut away to give the company a clean sheet as it works towards recovery.

Sommer was ousted under pressure from the German government last July. At the time, Chancellor Gerhard Schröder had raised concern about the partially state-owned company’s debt and growth strategy. Shares were at an all-time low, and Sommer was seen by many as the source of the problem. It wasn't long after that Sommer vacated the position and prompted the search for a replacement that is ended on Thursday with the appointment of Ricke as CEO.