DT's Sommer regrets share drop

May 29, 2001
Web Posted at 1009 GMT

COLOGNE, Germany, May 29 (Reuters) - Deutsche Telekom (DTE) Chief Executive Ron Sommer told shareholders on Tuesday he regretted a plunge in the firm's value.

Shares in the group, which ranks among Europe's three largest telecoms operators, have fallen by 75 percent since last March and have lost more than half their value in the last year -- underperforming the Euro stoxx telecoms index.

The stock continued to fall on Tuesday, trading 1.63 percent lower at 25.87 euros by 1005 GMT, one of the heaviest losers on Germany's blue-chip DAX index, which was 0.09 percent higher.

"I sincerely regret the impact this has had on you," Sommer told Deutsche Telekom's annual shareholders meeting in Cologne.

The CEO, who came under intense pressure to quit from some investors and media earlier this year, made his opening remarks as the giant Cologne Arena filled with thousands of shareholders eager for a game plan to pick up the value of their "T-shares." "I will do my utmost to ensure that our company's full potential and prospects are realised, and that the share price returns to an appropriate level," Sommer said. "There are signs that the market may now be finding a stable base." Germany's Association for the Protection of Small Shareholders (SDK) blames the fall in Telekom's share price on "long series of errors by management." It says Telekom's cash-and-share acquisition of U.S. cellphone operator VoiceStream, currently valued at just over $26 billion, is too expensive, and claims the company paid too much for UMTS next-generation mobile phone licences and neglected core business as it expanded.

Around a third of owners of Telekom's free-floating stock are private shareholders in Germany. The German state retains a 58 percent stake in the company, which will shrink to 46 percent after the VoiceStream deal is closed at the end of this month.