Bloomberg
June 7, 2011
Deutsche Telekom AG (DTE) Chief Executive Officer Rene Obermann, who persuaded workers in Germany to accept lower pay in 2007, may have to do the same in Greece to turn around the unit with the steepest revenue decline.
The Greek government exercised an option yesterday to sell 10 percent of Hellenic Telecommunications Organization SA (HTO) to Deutsche Telekom for 400 million euros ($583 million). The Bonn- based company may now push for changes in Greek labor laws and incentives for broadband and wireless investments as it weighs taking on more shares, said a person familiar with the matter.
“Having such a conversation could absolutely help them improve their operating environment,” said Guy Peddy, a London- based analyst at Macquarie Securities, who rates Deutsche Telekom “outperform.” “It’s very difficult to reduce the headcount, and OTE has tried that in the past and failed.”
Prime Minister George Papandreou’s government, shut out from financial markets and faced with the biggest debt load in the euro’s history, aims to sell 50 billion euros in state assets to secure additional bailout payments. In the third year of Greece’s recession, fixed-line customers and mobile-phone subscribers are fleeing Hellenic Telecommunications, also known as OTE, leading to a 13 percent drop in first-quarter sales.
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