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OCTOBER 14, 2000

Deutsche Telekom and Formula 1

SEVERAL Formula 1 teams are believed to be pitching Europe's biggest telecommunications company Deutsche Telekom for a major sponsorship deal. The German firm has had small involvements in F1 to date with an associate partnership with McLaren for its T-D1 brand (which has meant discreet badging on the drivers' overalls) and a relationship between its British offshoot One-2-One with Jaguar Racing. The McLaren deal may be coming to an end because Alexander Wurz is believed to be on the verge of joining McLaren as the third driver and he has close links with T-D1's rival D2, which is owned by Vodaphone.

Deutsche Telekom is the third largest telecommunications company in the world behind Japan's NTT and America's AT&T but the firm has made little impact outside Europe to date. An attempt to take over Telecom Italia last year failed and this resulted in the break-up of Deutsche Telekom's close relationship with France Telecom. Since then DT's boss Ron Sommer has been trying to do a deal with a global partner to ensure that the company remains at the forefront of the industry. This has resulted in the purchase of VoiceStream in the United States.

To date DT's international marketing has involved sponsorship of a highly-successful bicycle racing team, built around Tour de France winner Jan Ullrich but cycling has far less impact around the world than Formula 1 and it may be that DT has decided to use F1 to help its global expansion plans. It is therefore a question of deciding which F1 team will give it the most exposure and the best performance. Our sources say that Prost and Sauber are both bidding for the deal. Another team which might be bidding for the deal is Jordan but the team does not appear to have much space available on the cars.

There is little to choose between the two as both will be using Ferrari V10 engines next year. Sauber is a Germanic team and will have a German driver but DT may be looking for a more international image, which Prost might provide. Both teams have plenty of space available on their cars, although Prost could probably offer a little more than Sauber which has big deals in place with Red Bull and Petronas.

Deutsche Telekom will be well aware that its competition Telefonica, MCI Worldcom, Orange (France Telecom), D2 (Vodaphone) and TIM (Telecom Italia) are all F1 sponsors.