BUSINESSWEEK ONLINE : DECEMBER 4, 2000 ISSUE
INTERNATIONAL -- EUROPEAN COVER STORY ONLINE EXTRA: CFO Eick: 'A Huge and Incomparable Transition Period' Deutsche Telekom CFO Karl-Gerhard Eick says he has "the most interesting job in the world." Some people might say the most thankless. Consider the financial challenges confronting the German telecommunications giant: ballooning debt, sinking profit, huge investment in technology, ruthless competition spurred by deregulation. Eick spoke recently with BusinessWeek Frankfurt Bureau Chief Jack Ewing about his strategy for mastering these challenges. Here are some excerpts: On coping with reduced financial clout: We will enter into another phase of development. The next phase will emphasize quality and the optimization of our assets...We have to manage the integration of several new businesses into the group. We have to consolidate. We have to fulfill the goals we have established for ourselves and our shareholders. On the plunge in Deutsche Telekom's share price: There's no doubt about it -- I'm disappointed about the recent share-price decline. On the other hand, we have always said we are building a business for the long term and not to satisfy the needs of day traders and short-term investors. I am absolutely convinced we will see enhancement of the share price of Deutsche Telekom. On downgrades of Deutsche Telekom debt by rating agencies: It is the natural result of the investment we are making to become global. You can't globalize a business if you are not willing to increase debt burden to a certain extent. There's a clear action plan to bring down our debt significantly over the next three years. This will involve the sale of noncore assets. On the possibility DT will suffer quarterly losses: Could be. But if this loss only comes out of goodwill amortization, it doesn't worry me at all. If the strategic value of an acquisition is clear to us, I am not worried. Is it possible that Deutsche Telekom could report negative results for a quarter? Sure, it would be disingenuous to answer anthing but yes. But it is critical to realize that for the company to grow in the long term, it's no longer appropriate to look just at net profit. On possibility of becoming a takeover target: That's not something we've discussed at the management-board level, however it would be unrealistic for any publicly traded company to say it will never be a takeover candidate. But there are not too many companies that have the muscle to take over Deutsche Telekom, and the danger of that is therefore not too high. I'll also say that if you can't fulfill the promises to your shareholders, you will become a takeover candidate. That's true for everybody. On mergers and acquisitions: I am absolutely convinced this industry will consolidate over the next several years, due to the fact that this is a real global service. If it's a global industry, there will be global players. If there are global players, there will be consolidation. There are companies which are consolidators, and there will be companies which will be consolidated. I would hope that we are one of the consolidators. On the speed of the telecoms business: In this business, a month is like a year. It's the most interesting job in the world. There is nothing similar or comparable. The business is changing so fast. Moreover, the company is in a huge and incomparable transition period. It's an enormous challenge, but it's exciting to be part of it all. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Deutsche Telekom's Embattled Boss (int'l edition) COVER IMAGE: Deutsche Telekom's Embattled Boss CHART: Deutsche Telekom's Hard Year TABLE: The $80 Billion Spree ONLINE EXTRA: CEO Sommer: ``We Are Very Much Misunderstood'' ONLINE EXTRA: CFO Eick: ``A Huge and Incomparable Transition Period'' ONLINE EXTRA: Global Business Chief Hedberg: ``It's Not Just Winning the Deal'' INTERACT E-Mail to Business Week Online

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