LAST November's flotation of Deutsche Telekom was not only the largest privatisation in the world this decade, it may also have been the biggest stock market hype. Using the most expensive advertising campaign Germany has ever seen, the former state owned telecommunications company persuaded more than two million small investors to take part in a DM20 billion share issue at DM28.50 a share.

After their first day of frenzied trading at Frankfurt, when more than 40 million Deutsche Telekom shares changed hands, the share price ended at DM33.90.

Three months later, the shares have fallen to DM31.56, despite an equity bull market and expectations that the company's profits for 1996 will exceed expectations. Some investors grumble that Deutsche Telekom inflated its share price before the flotation by signing up top brokers to sell the shares.

The sheer volume of publicity surrounding the flotation had a powerful impact on Germany's cautious investment culture which has traditionally favoured bonds over equity. The DAX index of 30 blue chip companies gained nearly 30 per cent last year as some German companies embraced, for the first time, the concept of "shareholder value".

This means thinking first of shareholders dividends, rather than the welfare of employees or the company's long term interests when making decisions.

If investors in Deutsche Telekom are disappointed at the company's stock exchange performance, their grumbles pale into insignificance compared with those of the company's customers. Privatisation has not produced a more efficient response to faults or bill enquiries but it has meant a new pricing system, cutting rates far businesses and charging more for local calls made most often by domestic users.