Munich The outgoing Freenet supervisory board chief Helmut Thoma draws a bitter balance before the general meeting of the telecommunications provider on Thursday and settles sharply with the CEO Christoph Vilanek, who has been in office since 2010. For the purpose of restructuring, he wanted to recruit an “operatively strong, young, innovative manager” and “completely missed the mark,” says Thoma in an interview with the Handelsblatt. “Unfortunately, this personnel was an absolutely wrong decision.”
In the 1980s and 1990s, as head of RTL, Helmut Thoma was something like “Mr. Private Television” in Germany. In the past 22 years he has tried to achieve similar success as a member of the Freenet (formerly Mobilcom) supervisory board in the telecommunications market. He himself made many suggestions to the CEO, says Thoma, for example for a cooperation with the Chinese digital group Tencent. The CEO was “not really interested in anything”.
All in all, it was “not enough what Freenet offered in terms of innovations”. But they are necessary because surviving as a large service provider without a network is “difficult,” explains Thoma.
The manager, who turns 83 on Tuesday, also criticizes the fact that CEO Vilanek is now putting together his own supervisory board that is “easier to maintain” than the previous one. Thomas’ designated successor Marc Tüngler, as head of the German Protection Association for Securities Ownership, has never had to make a business decision, the former RTL boss adds: “As I understand it, that would be a prerequisite for this job.”
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The attacked CEO Vilanek has repeatedly bought and sold companies and won a total of 8.8 million customers. He wanted to convert Freenet into a “digital lifestyle provider”.
Read the full interview here:
Mr. Thoma, you became known as the big zampano from RTL, who built up German private television there by 1998. After that, you have been on the supervisory board of Freenet AG and its predecessor company Mobilcom for 22 years, with one slight break. What was more exciting?
Working for the mobile phone company was the hardest. As a service provider, we are what is left of the great revolution in the telecommunications market – without our own network at all. Today there are the three giants Deutsche Telekom, Vodafone and Telefónica with their own networks and 1&1, which is currently building a network. Freenet is unique worldwide. It’s difficult to survive there.
You were there from the start, when entrepreneur Gerhard Schmid went public at the end of 1999.
It was his brilliant idea to secure the number “01019” and offer calls for 19 cents. At that time, many wanted to enter the market, for example Daimler or Metro. I joined the supervisory board together with Dieter Vogel, who later became Bertelsmann’s chief supervisor. Then came the famous year 2000 with the auction of UMTS mobile communications licenses. As finance minister, Hans Eichel took in 98 billion marks – as much as he lost there as a shareholder of Deutsche Telekom because of the depreciation.
Schmid also bought a frequency for seven billion marks.
He had been approached by France Télécom, they bought in. But the group was heavily in debt and did not pay for the frequency. A disaster! Since I knew French, I negotiated in Paris and was able to settle the matter. Then Mr. Vogel absented himself and I was alone in leading the supervisory board. We had to return the frequency.
Among other things, you were a trustee for Schmid’s shares. They later fought each other in a number of lawsuits…
… all of which I won. We then went ahead and bought the largest mobile operator, Debitel. With the deal, we escaped the takeover by Ralph Dommermuth and his company 1&1. The board had to go after criminal allegations. Mobilcom and Freenet always offered a lot.
And then, in 2010, you found CEO Christoph Vilanek. A new era began.
The then shareholder Permira suggested a CEO, which I rejected. My idea was that an operationally strong, young, innovative manager would have to do the restructuring. To be honest, I was completely wrong. This personnel was unfortunately an absolutely wrong decision.
Thoma accuses Freenet CEO Vilanek of wrong strategy
Are you talking about Mr. Vilanek? Twelve years later he is still CEO.
It’s just difficult to change something as the head of the supervisory board. At the beginning you try to prove that the decision was right. In conversations with him, I kept asking for certain strategic plans, but nothing happened. The goal must be to free yourself from this absolute dependency on the large network companies. The goodwill of Vodafone and Deutsche Telekom over bonuses and commissions decides our fate.
“Unfortunately, this change of personnel was an absolutely wrong decision,” says Supervisory Board Chairman Helmut Thoma today.
(Photo: Freenet AG)
How is that supposed to work?
You have to create a new business area. That happened with the Strato company, which we sold again with a lot of profit. We now also have the Waipu TV platform, which users can use to get TV programs on their cell phones. That’s interesting, but with 720,000 customers it’s still a small business. And Freenet tried in vain to roll out a nationwide radio program together with the Oschmann Group.
Freenet has repeatedly bought and sold companies. And you have at least 8.8 million customers.
Yes. But all in all, the innovations that Freenet offered were not enough. None of the new proposals really interested the CEO.
He explains that he has set up a “digital lifestyle provider”.
I wanted to build something as big as before on private television RTL. I was able to do that not because of, but in spite of, the major shareholder Bertelsmann. But that was a lost labor of love with Freenet. I’m stopping now. I am old enough.
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You placed your former RTL star Dieter Bohlen as an advertising figure in the role of “Chief Entertainment Officer” without a board position. The disagreement with the CEO couldn’t have been that bad.
Yes, but is it used correctly? Bohlen could have much more effect.
What strategy did you specifically propose to the CEO?
For example, getting into the gaming business. A few years ago we got in touch with the Chinese digital group Tencent. They were willing to cooperate. Nothing happened.
“The CEO can do whatever he wants with this supervisory board”
How do you see the future of Freenet now?
It’s going to be a tough ride. Mr. Vilanek is now knitting himself a supervisory board that is easier to maintain than the old one under my leadership.
A tough accusation. Aren’t you exaggerating?
Apparently, Marc Tüngler, chairman of the German Association for the Protection of Securities, is planned as my successor. This is a non-profit association. Mr. Tüngler has spent his entire career there and has never had to make a business decision. In my understanding, that would be a prerequisite for this job. And then there’s Sabine Christiansen, who once hosted a major talk show. Finally, there are a few new economists who are certainly good at arithmetic. But for what? The CEO can do whatever he wants with this supervisory board.
“As a service provider, we are left over from the great revolution in the telecommunications market – without our own network at all.”
(Photo: Freenet AG)
Freenet recently had no major shareholders. That gave you a lot of freedom.
Especially the CEO. That’s the tragedy. The entrepreneurial concept is missing. No one asks the many proxy advisors whether they are even qualified. The many small partners and shareholders are primarily interested in the dividend. They want and should be satisfied.
The shareholders you criticized rejected the compensation plan for directors last year. The CEO could then have earned 1.6 million euros.
If he’s good, he can get that too. What bothers me: the bottom line after the distribution is that there is not enough left for the company and its progress. A company is endangered with their eyes wide open.
On May 5th, you would have to chair the Freenet general meeting for the last time in five years as chairman of the supervisory board. You won’t be able to be as critical there as you are here.
It’s all largely formalized. There isn’t a lot of free space there. You read.
Mr. Thoma, thank you very much for the interview.
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