Telekom Strike

The German service workers union ver.di said that some 13,000 workers were staging strikes even as the talks started. Ado Wilhelm, a union official leading the strike effort, said that the number of striking workers would be reduced significantly on Friday at the earliest

"We'll first wait to see how the negotiations go," Wilhelm told the AP news agency.

The union authorized the strike on May 10 after talks collapsed over Deutsche Telekom's plans to relocate thousands of workers to a new T-Services operation -- with a cut in pay and longer hours, but also a guarantee against layoffs.

Bonn-based Deutsche Telekom is Europe's biggest telecommunications company.

Ver.di said on Tuesday it would return to talks after Deutsche Telekom personnel chief Thomas Sattelberger offered a new proposal, calling for bonuses that might help offset the planned pay cuts.

"We welcome the return to the negotiating table," Andreas Middel, a spokesman for Telekom, told AP.

He said the company had always stressed that it was prepared to compromise on elements of its restructuring concept.

Slowing expansion

Telekom has also said it is is putting the brakes on its overseas expansion plans and has no plans to develop in emerging markets for the moment, chief executive Rene Obermann said in an interivew Wednesday.

Even though Obermann had said in March that he saw acquisitions abroad as a chance to return to growth, the CEO told the business daily Handelsblatt in its Wednesday edition that Deutsche Telekom had other priorities at the moment.

"For the time being, we'll boost our presence in markets where we're already present," Obermann said.

"That will enable us to achieve economies of scale and win market share," he said. "Neighboring markets come in second place for us

because they offer size advantages, such as joint purchasing and IT

platforms," the chairman said.

In March, the newly installed chief had said that given the cut-throat competition in its home market, Deutsche Telekom saw foreign expansion as a chance to boost profitability.

At the time, Obermann had complained that while Deutsche Telekom was very dependent on the German, European and US markets, it did not have any substantial presence in fast-growing economies, such as those in Asia.

Europe remains hunting ground

The German giant still planned to develop in those countries in the mid- to long-term, he said.

Deutsche Telekom's strategy differs substantially from that of its major European rivals, with British mobile operator Vodafone recently acquiring Hutchison Essar in India and France Telecom expanding in Africa.

Europe would remain the main hunting ground for Deutsche Telekom, Obermann said.

"The European market will have to consolidate. There are more

than 90 network operators here and around 300 services suppliers. If they don't consolidate, small companies will find it hard to survive," he said.

Deutsche Telekom acquired the Austrian mobile operator Telering in 2006 and is currently planning to buy Orange's Dutch business.

Contrary to persistent rumours, the German giant has no plans to pull out of the United States, Obermann continued.

"T-Mobile USA is not for sale," he said, insisting that the US subsidiary was an important growth engine for the entire group.

The market capitalization of T-Mobile USA was currently higher than the rest of Deutsche Telekom, which could raise the possibility of a possible break-up of the group.

But Obermann rejected such suggestions.

"The break-up ideas overlook the fact that the group creates substantial synergies via its manifold internal links," he said.

"But if we don't succeed in pushing through our planned reforms, then we'll have to look at such scenarios."