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Europe

Trouble at Telekom

7:30 AM -- The strike at Deutsche Telekom AG (NYSE: DT) over its jobs plan has entered its second week, and is beginning to attract a lot of negative publicity for the German incumbent. (See DT: Strike Watch and DT in Jobs Deal.)

Politicians are reportedly speaking of the potential dire business consequences should the industrial action continue, while there are now concerns that the planned G8 meeting of the world's leading industrial nations, due to be held in the German seaside town of Heiligendamm June 6-8, could be affected.

That would embarrass Germany's Chancellor Angela Merkel, as she is due to host her counterparts from Canada, France, Italy, Japan, Russia, the U.K., and the U.S., as well as a number of developing nations at the G8 meeting.

And Deutsche Telekom doesn't want to get on the wrong side of Merkel as it grapples with the European Commission over access to its new high-speed access network. (See EC Warns Germany and EC Threatens Germany With Court Case.)

To add to the carrier's misery, the strike began the day after DT announced a slump in first-quarter profits -- all of which is putting pressure on DT's share price, which has dipped by 2 percent this week to stand at €12.48 on the Frankfurt exchange Friday lunchtime.

— Ray Le Maistre, International News Editor, Light Reading

digits 12/5/2012 | 3:08:16 PM
re: Trouble at Telekom This strike looks like it could be incredibly damaging for DT unless it manages to bring it under control very quickly.
ANyone in Germany have any first hand comment on any impact on service or modd towards DT?
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