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Deutsche Telekom Plans Cuts, Merger

December 6, 1998

BONN, Germany (AP) _ Former German telephone monopoly Deutsche Telekom plans to trim 20,000 jobs by the year 2000 and will seek partners for possible mergers, a company spokesman said Sunday.

The job cuts are part of Deutsche Telekom’s efforts to balance price cuts with market volume growth and cost-cutting measures as the company winds up its first year in a free market.

Since facing competition for the first time last Jan. 1 with the liberalization of Germany’s telecommunications market to meet European Union standards, Deutsche Telekom has slashed prices and cut 40,000 jobs to compete with a growing number of rivals.

Chairman Ron Sommer, in an interview in the weekly Bild am Sonntag newspaper, said he is concerned about the coming business year. ``We will do everything to present our shareholders an attractive dividend also for 1999,″ he said.

Sommer also said that Deutsche Telekom, which is still mostly government owned, cannot avoid acquisitions and mergers if it hopes to become a global player.

``It will be vital for industrial giants to have a headquarters in Germany, not just for automobiles but also for telecommunications,″ he was quoted as saying.

Spokesman Klaus Lissek confirmed the content of the interview, saying that while there are no concrete plans for mergers, Telekom must acquire new partners if it hopes to survive in the industry.

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