The board of Deutsche Telekom has said that it will meet next Tuesday to discuss the "situation" at the company.

The announcement comes amid mounting speculation that group chairman Ron Sommer will be forced to leave.

There were also rumours on Wednesday that Deutsche Telekom's mobile phone unit VoiceStream Wireless would merge with AT&T Wireless.

If the reports prove accurate, the two companies would merge in an estimated $10bn deal.

Second best

As a combined company they would become the second largest wireless company in the US, ahead of Cingular Wireless and just behind Verizon Wireless.

The company must think about people's confidence

Franz Muentefering Social Democrat

Both AT&T Wireless and Deutsche Telekom have declined to comment on the report, which was first published in the Wall Street Journal.

"My impression is that (a VoiceStream merger) has been much talked about but hasn't really got off the drawing board yet," a corporate financier told Reuters newswire.

Shares in AT&T Wireless closed up almost 6%, while the American Depository Receipts of Deutsche Telekom closed off 14 cents at $10.96.

Trouble in Germany

Deutsche Telekom's Mr Sommer has lost popularity at home because of his expensive acquisition spree and his overspending on third-generation licences.

These moves have saddled the company with heavy debts and caused its share price to drop sharply.

Analysts said that any move by Mr Sommer to sell VoiceStream could be positive, particularly as Deutsche Telekom's $24.9bn acquisition of the company last year was seen as an expensive error of judgement.

However, the German government, which holds a 43% stake in Deutsche Telekom, is said to be looking for a successor to Mr Sommer.

"The company must think about people's confidence," Franz Muentefering, the secretary-general of Schroeder's Social Democrats, said on ZDF television on Wednesday.

"It doesn't depend on a person, but the board must know that it needs to act."

The stock has lost more than 90% of its value since its peak in 2000, and fell below nine euros for the first time late last month.