Sign Up

Deutsche Telekom and the Tour de France

What does the performance of Deutsche Telekom’s cycling team say about the company?

July 13, 2000

What does the performance of Deutsche Telekom's cycling team say about the company?

Only in this case it is not political rivalries — but corporate competition. Last year’s winner, American Lance Armstrong is on the team sponsored by the U.S. Postal Service. After the first twelve stages of the Tour de France, Armstrong has found himself wearing the “yellow jersey” — a distinction reserved for the race’s leader. He holds a nearly five-minute lead over another past champion, Germany’s Jan Ullrich.

Deutsche Telekom, which sponsors Ullrich's team, is undoubtedly hoping their man can make up lost time — much as the company itself is trying to make up lost time in finding a merger partner. It recent months, it has seen many proposed couplings fall apart.

In fact, the Deutsche Telekom team's pursuit of Armstrong's USPS team is an apt metaphor for the companies' recent fortunes. USPS is thriving as a privatized company (although it still enjoys a government-sanctioned monopoly for delivering most types of mail). Meanwhile, Deutsche Telekom almost certainly remembers better days when it was a wholly state-owned monopoly encompassing not just the communications sector, but also Germany's postal service.

But these days, Deutsche Telekom is not only lagging behind in the Tour de France — but also in the race for telecommunications assets in the United States. It first to acquire Qwest in 1998. Before it could even publicly announce an interest in acquiring Sprint last month, thirty U.S. Senators ganged up to oppose the marriage on the grounds that the merger would put a U.S. telecom under the control of a foreign government. (The German government still owns a 57% stake in Telekom.)

Having failed to reel in those big fish, Deutsche Telekom now appears to be determined to come away at least with VoiceStream Wireless. Deutsche Telekom's defenders insist that its bid for VoiceStream is in no way a desperation move, but is part of a long-term acquisitions strategy. After all, Germans (and German companies) do pride themselves on their stamina, discipline and determination. At the same time, they deride U.S. companies' reputations for focusing on short-term objectives — often just to keep fickle shareholders happy.

If their racing teams reflected these assumed corporate cultures, one would reasonably expect the USPS team to dominate the sprints and time trials, while the DT team carried the long, grueling mountain stages. That is where our racing metaphor does not hold. Lance Armstrong — the USPS racer — only took the lead once the race entered the mountains. And it is a Telekom team member who has the “green jersey” — worn by the fastest racer in the sprints.

Of course, win or lose, Lance Armstrong is no ordinary bicyclist. Diagnosed with cancer in 1996, he returned to cycling in 1998 and won the Tour de France the following year. Perhaps Deutsche Telekom’s Jan Ullrich was not so far off when he remarked that “Armstrong raced like a man from another planet.”

As such though, Armstrong may have to be careful about returning to his native Texas. There, the locals are all too well aware that, as the U.S. Immigration and Naturalization Service has estimated, Texas already is home to about 700,000 “aliens.” Of course, unlike Armstrong perhaps, most of them are originally from Mexico.