The announcement by Germany's powerful service sector Ver.di union that its members had decided by a large majority to strike came as the former state monopoly reported a fresh slump in earnings.

Ver.di said that 96.5 per cent of the 20,000 eligible to join the strike ballot had voted to down tools over Telekom's cost-cutting plans, which include shifting 50,000 workers to a new service company and reducing wages.

The strike call followed the breakdown of talks between the union and Telekom, which is struggling to boost its earnings and competitiveness in the face of fierce competition in its domestic German market.

"Strikes do not help anybody"

Telekom chief Rene Obermann called o­n the union Thursday to lay aside the strike plans and to return to the negotiating table.

"Strikes do not help anybody,' said Obermann, who took over the chief executive job last November.

But Ver.di officials said the strike action could start Friday.