THE problems faced by Deutsche Telekom in its home territory are not unique to the German group.

Germany is not only Europe’s largest telecoms market, it is also one of the most competitive, where hundreds of mobile brands and fixed-line players are embroiled in a fierce price war.

This, combined with the heavy termination rate cuts imposed by the regulator — the latest at 15 per cent — means that, to some extent, René Obermann’s ability to manoeuvre a turnaround will be just as restricted as his predecessor’s.

As Dan Bieler, an analyst at Ovum, the telecoms research agency, says: “It is not much fun to be a telecoms operator in Germany right now.”

Even as Deutsche Telekom named its new chief executive, O2, the Spanish-owned mobile group, was highlighting its own difficulties in the market, where mobile penetration is more than 100 per cent.

The company reported third-quarter results yesterday in which it lowered its full-year service revenue guidance for Germany because of fierce competition. It said that the figure will be in the “high- single” digits as opposed to the low double-digit figure that it had predicted previously.

In its full-year results, in May, Vodafone also highlighted the tough nature of the German market.

The mobile giant has been forced to launch a series of new products, such as Zuhause — a tariff that allows customers to make cheap calls on their mobile phones within their homes — to keep hold of its market share.

Analysts believe that Deutsche Telekom went wrong in its complacency over the threat posed by nimbler rivals.

E-Plus, the German mobile unit of KPN, the Dutch telecoms company, and now the third-largest mobile group in the country, transformed the German market two years ago by launching a series of highly targeted mobile brands — one aimed at 17 to 25-year-olds and another at the sizeable Turkish community. Deutsche Telekom initially dismissed the threat, moving to react to it only when it was too late.

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