By Tony Hallett, 7 December 1998 12:02
NEWS Deutsche Telekom (DT), Europe's largest telco, is on the lookout for acquisitions, according to its chairman, Ron Sommer. In an interview with German weekly Bild am Sonntag, Sommer said the company has little option but to buy - following the example of other German giants such as car manufacturer Daimler-Benz and Deutsche Bank. Sommer's comments do not come as a surprise. DT's domestic revenues have taken a battering since the German market was liberalised at the start of the year and the company is still in dispute with the regulator and competitors over interconnection charges for local calls. An international alliance announced earlier this year with France Telecom and Energis - the UK business telco born out of National Grid Holdings - and a recent share swap with France Telecom could indicate the nature of DT's future strategy. Like BT, the German telco has admitted domestic competition is forcing it to seek growth abroad. While Energis may be the type of company DT has marked as a future take-over target, its majority owner, National Grid, is also rumoured to be considering international expansion. National Grid has said it will seek to copy the Energis business model overseas - even if it greatly reduces its stake in Energis itself - and weekend reports suggest the company may be pairing with US long-distance telco Sprint to take on the Brazilian market. Sprint lost out at the privatisation auction of Telebras in summer and now the construction of an alternative long-distance, high-speed network in partnership with a company such as Energis is on the cards - according to UK Sunday newspaper, The Observer.
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