Munich The outgoing Freenet Supervisory Board Chairman Helmut Thoma is taking a bitter stock in front of the telecommunications provider’s Annual General Meeting on Thursday and is settling sharply with Christoph Vilanek, the CEO who has been in office since 2010. For the purpose of restructuring, he wanted to win an “operationally strong, young, innovative manager” and “completely missed the mark,” says Thoma in an interview with Handelsblatt. “Unfortunately, this staff was an absolute mistake.“
In the 1980s and 1990s, Helmut Thoma, as head of RTL, was something like “Mister Privatfernsehen” in Germany. Over the past 22 years, he has tried to achieve similar success in the telecommunications market as a member of the Supervisory Board of Freenet (formerly Mobilcom). He himself has 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 this.
Overall, it was “too little what Freenet offered in terms of innovations”. But these are necessary, because survival 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, which is “easier to maintain” than the previous one. Thomas’s designated successor Marc Tüngler has never had to make an entrepreneurial decision as head of the German Protection Association for Securities Ownership, the former head of RTL adds: “In my understanding, this would be a prerequisite for this job.“
The attacked CEO Vilanek has repeatedly bought and sold companies and gained 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 have become known as the great Zampano of RTL, who built up German private television there until 1998. After that, you have been on the Supervisory Board of Freenet AG or its predecessor company Mobilcom for 22 years, with a slight interruption. What was more exciting?
Working for the cellular company was the most difficult. As a service provider – completely without our own network – we are left over from the great revolution in the telecommunications market. There are the three giants Deutsche Telekom, Vodafone and Telefónica with their own networks and 1&1, which are currently building a network. Freenet is unique worldwide. Survival is difficult.
They were there from the very beginning when the entrepreneur Gerhard Schmid went public at the end of 1999.
It was his brilliant idea to secure the number “01019” and offer phone calls for 19 pfennigs. 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 phone licenses. Hans Eichel took 98 billion marks as Finance Minister – as much as he lost as a shareholder of Deutsche Telekom because of the impairment there.
Schmid also bought a frequency for seven billion marks.
He had been approached by France Télécom, they bought in. But the group was heavily indebted 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 the management of the Supervisory Board. We had to return the frequency.
Among other things, they were trustees for Schmid’s shares. Later they fought each other in several trials …
… which I won all of them. We then went to the front and bought the largest mobile operator, the Debitel. With the deal we escaped the take-over by Ralph Dommermuth and his company 1&1. The board had to leave after criminal charges. There was always a lot on offer at Mobilcom and Freenet.
And then in 2010 they found the chief Executive officer Christoph Vilanek. A new era began.
The then shareholder Permira proposed a CEO, which I rejected. My idea was that in order to restructure, an operationally strong, young, innovative manager had to take over. To be honest, I completely missed it. Unfortunately, this staff was an absolute mistake.
Thoma accuses Freenet CEO Vilanek of wrong strategy
You’re talking about Mr. Vilanek? Twelve years later, he is still chairman of the Board.
It’s just hard to change something about it again as the head of the Supervisory Board. In the beginning, you try to prove that the decision was right. In conversations with him, I repeatedly demanded certain strategic drafts, but nothing happened. The goal must be to free oneself from this absolute dependence on the large network companies. The goodwill of Vodafone and Deutsche Telekom about bonuses and commissions decides our fate.
Freenet CEO Christoph Vilanek
“Unfortunately, this staffing was an absolute wrong decision,” says Supervisory Board Chairman Helmut Thoma today.
How is this to succeed?
You have to build a new business unit. This happened with the company Strato, which we sold again with a lot of profit. In the meantime, we also have the Waipu TV platform, with which users can get television programs on their mobile phones. This is interesting, but still a small business with 720,000 customers. And Freenet tried in vain to roll out a nationwide radio program together with the Oschmann Group.
Freenet has repeatedly bought and sold companies. We have 8.8 million customers.
Yes. But overall, it was too little that Freenet offered in terms of innovations. The CEO was not really interested in the new proposals.
He explains that he has set up a “digital lifestyle provider”.
I wanted to build something as big as before on private TV RTL. At that time, I had succeeded not because of Bertelsmann, but in spite of its major shareholder. But that was love lost at Freenet. Now I’ll stop. I’m old enough.
You have placed your former RTL star Dieter Bohlen as an advertising character in the role of a “chief entertainment Officer” without board responsibilities. The disagreement with the CEO could not have been that bad.
Yes, but is it used correctly? Planks could have much more effect.
What did you specifically propose to the CEO strategically?
For example, getting into the gaming business. A few years ago, we got in touch with the Chinese digital company Tencent. They were ready for cooperation. Nothing happened.
“With this Supervisory Board, the CEO can do what he wants”
How do you see the future of Freenet?
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 harsh reproach. Aren’t you exaggerating?
Marc Tüngler, Chairman of the Deutsche Schutzgemeinschaft für Wertpapierbesitz, is apparently intended as my successor. This is a non-profit association. Mr. Tüngler has spent his entire professional career there and has never had to make an entrepreneurial decision. In my opinion, this would be a prerequisite for this job. And then there is Sabine Christiansen, who at least once hosted an important talk show. Finally, there are some new business people who can certainly calculate well. But for what? With this Supervisory Board, the CEO can do what he wants.
Freenet headquarters in Büdelsdorf
“As a service provider – completely without our own network – we are left over from the great revolution in the telecommunications market.“
Freenet did not have a major shareholder at last. That gave them a lot of freedom.
Especially the CEO. That’s the tragedy. The entrepreneurial concept is missing. No one asks the many proxy advisors if they are qualified at all. The many small shareholders and shareholders are mainly interested in the dividend. They want and should be satisfied.
The shareholders they criticized rejected the compensation plan for board members 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 is that there is too little left for the company and its progress after the distribution. A company is put at risk.
On May 5, you would have to chair Freenet’s Annual General Meeting for the last time after five years as Chairman of the Supervisory Board. You will not be able to be as critical as here.
This is all largely formalized. There is not much free space there. One reads.
Mr. Thoma, thank you very much for the interview.
