By Sally Watson, 13 November 1998 16:28
NEWS Deutsche Telekom (DT) applied to the German telecoms regulator yesterday for approval of wide-ranging cuts in call prices. The telco is planning to simplify its price structure and offer cheaper calls during peak times. If the regulator gives the go-ahead, DT will cut fixed-line tariffs on long-distance calls within Germany by up to 63 per cent, and some regional calls will be up to 33 per cent cheaper. DT has plunged into the centre of a price war following the liberalisation of the German telecoms market - losing 25 per cent of its long-distance business. Ron Sommer, DT chairman, admitted the move would mean a painful profit loss in the short term - but argued it is the only way to fight off cheaper competition. The telco hopes the aggressive price cuts will increase its customer base in the long term. Sommer accused the regulatory authority of favouring competitors - saying low interconnection fees are giving them an unfair advantage. Rival company MobilCom released results yesterday showing sales had almost quadrupled in the first nine months of the year to DM904.3m. MobilCom has successfully attracted customers with an aggressive marketing campaign offering cheap calls on the back of lines rented from DT. The news prompted shares in DT to fall DM3 yesterday to DM44.7. If the telco gains approval, the cuts will be implemented from 1 January.
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