The History of Deutsche Telekom

In Germany the telephone started as a government monopoly under the auspices of the monolithic Reichspost (the postal service in the Holy Roman Empire founded by Franz von Taxis in 1495). Telephony was goverend by the German Postmaster General whose role was supreme and because of his expertise he forced the telephone business to conform to the postal mould. In this model the man in a small city must pay as high a rate for a small service, as the man in a large city pays for a large service. Moreover, the German engineers did not keep in close touch with the progress of telephony in the United States so that they devised methods on their own and created a miscellaneous assortment of systems.

Despite this, the telephone was held in high favor with the Kaiser. Indeed, it was his custom, when planning a hunting party, to have a special wire strung to the forest headquarters, so that he can converse every morning with his Cabinet. He even conferred degrees and honors by telephone and even his former Chancellor, Von Buelow, received his title of Count in this informal way. However, the first true friend of the telephone in Germany was Bismarck who instantly saw this technology's value in holding a nation together. Early in the autumn of 1877 he ordered a line between his palace in Berlin and his farm at Varzin (380 km away) and this became the first long-distance line in Europe.

After 1924 the central goal of the public administrative policy concerning the Reichpost was that of 'financial self-sufficiency' as was enshrined in the postal administration law (Postverwaltungsgesetz, abbreviated PostVwG). And this became the guiding principle for the German telephone system during the entirety of its time in public hands. According to the PostVwG, the federal postal system was to be administered "according to the principles of the policy of the FRG, in particular trade, economic, financial and social policies" and "the interests of the German national economy." Though political machinations often superseded this goal.

In 1947 the Deutsche Bundepost (German Federal Post Office) was created as a successor to the Reichspost. Between 1947 and 1950, however, the enterprise was called Deutsche Post. The Bundespost itself was developed according to the standard three-tier system that was standard in the public administration in the Federal Republic of Germany (FRG). Within this system the upper stage consisted of the federal ministry for the post office and telecommunication system. The middle stage consisted of regional directorates and national post office management in West Berlin, with certain central bureaucracies (post office technical central office, telecommunication engineering central office, postal administration social office, and post offices) on an equal footing. Finally, the lower stage consisted of the actual post offices, postal giro and savings bank offices, and telecommunication offices.

On July 1^st 1989 came the first post office reform where the Bundespost was divided into three divisions:

• Deutsche Bundespost Postdienst — postal service
• Deutsche Bundespost Telekom — communications service
• Deutsche Bundespost Postbank — postal bank

Despite these divisions the central authorities controlling these divisions remained as before. On January 1^st 1995, in the second postal reform the divisions were fully privatized and became:

• Deutsche Post AG — created from the postal service
• Deutsche Telekom AG — created from the communications service
• Deutsche Postbank AG — created from the postal bank

The federal ministry for post office and telecommunications (Bundesministerium für Post und Telekommunikation) retained oversight responsibility for postal services and telecommunications. After the dissolution of that ministry on 1 January 1998, those tasks were taken over by a new federal network regulatory agency (Bundesnetzagentur, formerly "RegTP")under the federal ministry for economics and technology. Other functions (such as the issuance of postage stamps) were taken over by the federal ministry of finance. Some telecommunications functions (including BOS radio) were turned over to the federal ministry of the interior.

Deutsche Telekom

Deutsche Telekom Corporate Logo

As of 2005, the German government still holds a 15.7% stake in company stock. 4.5% of the company is owned by the Private equity firm Blackstone Group.

In 2002 Deutsche Telekom's shares dropped precipitously from a high of 100€ at the height of the 'dot-com-bubble' to a low of 12€/share all during a tow-month period. This led to the ousting of Ron Sommer as CEO. The board then apointed Kai-Uwe Ricke as CEO but he was ousted ousted by the board of the company because of slumping sales and the flight of customers to cheaper competitors. More than 1.5 million customers changed to rivaling companies during 2005 and 2006 so the Deutsche Telekom had to lay-off more than 30,000 workers. The new CEO was announced on November 12, 2006 after a long-night board session: René Obermann, who is also the CEO of T-Mobile International.

Like any major telecommunications company today Deutsche Telekom has a number of subsidiaries and all have names starting with a "T-". These are:

• T-Com, a legacy telephone and fixed network carrier
• T-Mobile, a mobile phone provider
• T-Online, an internet service provider (ISP)
• T-Systems, a business division focused on providing to large customers, includes R&D

Deutsche Telekom also holds substantial shares in other telecom companies, including Central European subsidiaries T-Slovak Telekom (Slovakia), Magyar Telekom (Hungary), and T-Hrvatski Telekom (Croatia), which are now fully consolidated into T-Com. Furthermore, Magyar Telekom holds majority shares in Orbitel (Bulgaria), Combridge (Romania), MakTel (Republic of Macedonia), and T-Crnogorski Telekom (Montenegro) all of which have also been rebranded and included under the T-Com umbrella.