Hands off, Mr Sommer

It was a brave - some said foolhardy - decision to go to the markets in the midst of spring's stock slide, but T-Online came out the other side with its E28 (£17) share price pretty much intact.

Yet despite the positives T-Online is clearly a company riven with friction. The departure of CEO, Wolfgang Keuntje, in August was compounded by yesterday's news that marketing director, Ralph Eck, was stepping down. To lose a quarter of your board in less than a month is careless to say the least.

Ron Sommer, Deutsche Telekom's CEO, has his fingerprints all over the crime scene. While both Keuntje and Eck stuck firmly to the "personal reasons" party line on departure, it's clear to the outsider that Sommer didn't like some of the decisions being made inside T-Online. And as the boss of the company that still owns 87 per cent of the ISP he obviously feels entitled to intervene.

Entitled he may be, but he is wrong.

He's wrong because acting in the best interests of DT does not necessarily mean acting in the best interest of T-Online. The goals of a telco and an ISP are not mutually exclusive but there are certain areas where they are going to disagree.

T-Online - like any other ISP with pan-European ambitions - has two tasks going forward. First it must learn to change its revenue mix, away from a reliance on net access charges to income drawn from advertising and ecommerce. Today it brings in E311m (£188m) from telecom charges and only E33m (£20m) from its commercial activities.

Its second task is to expand its Europe coverage. Today, only 500,000 users are from outside Germany. The acquisitions of Club Internet in France and the Spanish portal, ya.com, are clearly a start but its failure to capture the UK's Freeserve and Italy's Tiscali has shown the breadth of its task.

In addressing both issues, T-Online has met resistance from its major shareholder. Anything that reduces call revenues is never going to be welcome to a telco while sources inside the company say Sommer and Keuntje had very different ideas about the worth of Freeserve.

Sommer should have put his faith in the T-Online board to do the right thing for its customers even it hits DT in the short-term. His inability to let go is bad news for T-Online. And very good news for its major rivals, Terra and Tiscali.