Standard&Poor's said today that the ratings and outlook on Germany-based telecommunications operator Deutsche Telekom AG (DT; BBB+/Stable/A-2) are not affected by the resignation of Ron Sommer as chairman of DT's board of management. Helmut Sihler will take over the position for a period of six months. DT continues to be excessively leveraged for its ratings, and it is assumed that the group will generate free cash flow and improve its ratio of adjusted debt to EBITDA to about three times as assets are sold, as controlled EBITDA (that is, EBITDA generated by controlled subsidiaries) grows, and as capital expenditure cuts strengthen cash flow. In this regard, Standard&Poor's will continue to monitor closely the progress of DT's
