Change at the Top

"Kai-Uwe Ricke steps down, in agreement with the executive committee of the supervisory board, from his post as president of Deutsche Telekom," the company said in a statement.

"The supervisory board will consider the nomination of his successor tomorrow (Monday)."

The group on Thursday reported a 34-percent fall in net earnings to 980 million euros ($1.26 billion) in the third quarter compared with the same period last year.

Deutsche Telekom has seen 1.5 million fixed-line customers in Germany move to other operators already this year, while its mobile phone unit is expanding only thanks to its activities in the United States.

Its share price fell sharply in August after it was forced to revise its forecasts for 2006 and 2007, which caused heavy losses for one of Telekom's major shareholders, the US investment fund Blackstone.

Alongside Blackstone's 4.5-percent holding, the German state retains one third of the former state-run operator.

Obermann lined-up as successor

German newspapers reported on Sunday that Ricke would be replaced by the current head of the company's mobile phone division, Rene Obermann.

"Ricke is throwing in the towel," one Telekom executive told Frankfurter Allgemeine Sonntagszeitung.

The newspaper said Ricke had lost the confidence of Klaus Zumwinkel, the head of Deutsche Telekom's supervisory board.

Ricke, 45, who has headed the company for four years, is accused of failing to get to grips with the enormous changes in the telecommunications sector, the reports said.

Deutsche Telekom is losing fixed-line customers to competitors in Germany while its mobile phone business is only expanding thanks to its activities in the United States.