Deutsche Telekom Pulls Plug on Debt Riddled Telecoms

Germany — Many call-by-call service providers, including Internet providers, must stop
their telephone sales within the next few weeks, reported German magazine “Der
Spiegel,” in its most recent edition. According to the
“Spiegel,” the reason for this action is the high debt of many telephone
provider companies to its initial supplier, Deutsche Telekom AG.

Numerous competitors of this German telephone conglomerate, such as
Teldafax, Callino or are in the red with a total amount of half a
billion German marks. Over half of this amount is already in its third
warning stage. Despite Telekom’s offers for discussion and warnings, many
companies will not settle their debt.

Therefore, Telekom has decided, within the next few weeks, to cut its
services to the companies in default. Telekom already announced this action
to the Marburg telephone provider Teldafax.

According to the
Spiegel, Teldafax owes Telekom over 85 million German marks. Telekom will
cut the line should Teldafax (listed on the stock exchange) not even pay a
portion of its debt. A few weeks ago Telekom proceeded similarly with the
Frankfurt provider Star Telecom.

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