German MOF: Government Backs New Deutsche Telekom Chief

BERLIN -(Dow Jones)- The German government fully backs the appointment of Rene Obermann to succeed Kai-Uwe Ricke as Deutsche Telekom chief executive, a finance ministry spokesman said Monday.

"Mr. Obermann is an excellent expert and an outstanding telecoms manager," Finance Ministry Spokesman Torsten Albig told Dow Jones Newswires. "He has the full confidence of the government."

The comments come shortly after Deutsche Telekom announced the appointment of Obermann, currently the head of the wireless telephony unit, as chief executive, effective Monday.

The government currently holds a direct stake of 14.83% in Deutsche Telekom, and 16.87% indirectly, via state-owned KfW Banking Group.

Speaking to reporters, German Chancellor Angela Merkel said when asked what she expects from Deutsche Telekom "that it operates successfully."

"This is good for people and for the employees," Merkel said. "In this sense I wish Mr Obermann all success."

Olbermann's appointment comes as shareholders have been unhappy with the company's recent performance as well as its share price development.

The government plans to eventually sell all of its remaining Deutsche Telekom shares but Finance Minister Peer Steinbrueck repeated earlier this month that the government won't opt for more privatization given the telecom operator's current share price.

Deutsche Telekom last traded at EUR13.51 by 1248 GMT, way down from its record high of EUR104 in March 2000.

-By Andrea Thomas, Dow Jones Newswires; +49 (0)30 - 2888 410; andrea.thomas@dowjones.com

(Andreas Kissler in Berlin contributed to this report)

(END) Dow Jones Newswires "

Posted to the site on 13th November 2006