BERLIN (02/09/2000) - The pending merger of Mannesmann AG and Vodafone AirTouch PLC has changed the competitive landscape in Europe and given Deutsche Telekom AG "a kick in the pants," according to the carrier's top international executive.
"Vodafone-Mannesmann will be a very powerful competitor," said Jeffrey Hedberg, board member in charge of international operations at Deutsche Telekom. "This has shaken the world and given us a kick in the pants."
Hedberg was speaking today to journalists in Berlin at the opening of Deutsche Telekom's annual meeting for the international press.
A U.S. citizen who joined the carrier roughly a year ago to give focus to Deutsche Telekom's international activities, Hedberg said his immediate focus is on making acquisitions that will help the carrier serve its international corporate customers and to compete as a pan-European player in the mobile phone market.
The Vodafone-Mannesmann deal has put more urgency into that focus, he confirmed. "We need to move quickly," he said.
Although the mega-merger between Germany's Mannesmann and U.K. mobile carrier Vodafone has yet to be approved by regulators, if it comes to pass it will create a huge competitor with a presence in 25 countries and the single largest player in the mobile phone market in terms of subscribers. [See "Euromergers Expected After Vodafone-Mannesmann," Feb. 4]Hedberg stressed, however, that Deutsche Telekom is not willing to pay the price for such an acquisition.
"There are a lot of prices being bandied about, and we have a hard time reconciling those prices," Hedberg said.
Deutsche Telekom is also freer than it was two weeks ago to make such acquisitions, he said, due to its dissolution of Global One, its telecommunications alliance with France Telecom SA and Sprint Corp. [See "France Telecom Buys Global One from DT, Sprint," Jan. 26.]Now it is no longer hampered in its efforts to partner with companies in France, for example, because restrictions in its Global One agreement have been lifted, Hedberg said.
The lesson Deutsche Telekom has learned from Global One is that it wants full control of the companies it works with, rather than just stakes or partnerships. "No more loose alliances," vowed Hedberg.
The former monopoly carrier sees Europe as an extended home market, Hedberg said, and is particularly looking to buy leading players there in the IP (Internet protocol) services market.
Elsewhere, it is looking to buy companies in places that help it serve its multinational customers, such as the U.S., Japan and Korea.
It also plans to continue efforts to internationalize its online service, T-Online International AG, Deutsche Telekom executives said at the gathering.
They pushed off questions on this topic to tomorrow, when T-Online and T-Mobil International AG, Deutsche Telekom's mobile phone division, will make further announcements.
In spite of its broad goals, Deutsche Telekom is not interested in expanding into new areas, said Gerd Tenzer, executive board member in charge of technical services. Asked by one journalist today if Deutsche Telekom would be attracted by a link-up with Hewlett Packard Co. -- which the reporter described as an isolated company without a significant partner -- Tenzer said the carrier's priorities are elsewhere.
"We have no intention to go into hardware," he said.
Deutsche Telekom, in Bonn, can be reached at +49-228-181-4949, or at http://www.telekom.de.