Deutsche Telekom chief executive Mr Ron Sommer has admitted making mistakes which contributed to company shares sinking below their 1996 issue price.
Mr Sommer, who has until now always blamed external factors for the shares' poor performance, made the admission at Telekom's annual meeting in Cologne yesterday.
"The \ industry made mistakes and we also didn't see everything right," he said, admitting that the board had not anticipated the collapse of the share price and the telecoms sector.
But Mr Sommer showed no regret for the depressed share price, calling it "unpleasant to a high degree" and "in stark contrast to the operative development of the concern".
His speech did little to impress the 9,000 shareholders in Cologne, one of whom described his holding in Telekom as "investment for masochists".
Millions of Germans, including many from eastern Germany, invested their savings in Telekom shares in 1996 believing the first public offering of a former government utility to be a secure investment.
But Ms Jella Benner-Heinacher, president of the German Investor Protection Association (DSW), said Telekom shares "had turned out to be a high-risk gamble stock".
She attacked the board for last year's 90 per cent increase in bonuses and salaries.
"Whoever eats caviar during a cholera epidemic cannot expect the understanding of Telekom shareholders," she said.
Mr Hans-Dietrich Winkhaus, chairman of the Deutsche Telekom board, said the increase was justified as "the board had done good work", a comment that was met with laughter and whistles from the assembled shareholders.
Mr Sommer defended Deutsche Telekom as "regionally, and internationally" stronger than practically all other competitors.
There would have been no growth in the company had it not been for increasing investment, he said.
Ms Benner-Heinacher of the DSW said the simultaneous purchase of US subsidiary VoiceStream and third-generation mobile phone licence was to blame for current problems, with no guarantee of either venture turning a profit in the future.
Mr Sommer predicted a 10 per cent increase in revenues for the year on last, saying he was confident the company debt could be reduced to €50 billion by the end of next year by selling off the company's cable networks and the mobile division T-Mobile.
"Both options still remain open to us but the conditions have to be right for us to use them," he said, adding he was confident that the conditions would improve "in the forseeable future".
