Deutsche Telekom to open more shops as mobile market heats up

* To increase shops by 100 from 1,100 in next 18 months

* Hopes to lure in new customers as competition heats up

* Shops are viewed as important marketing tool

FRANKFURT, June 7 (Reuters) - Deutsche Telekom isto open more of its high street shops to fend off risingcompetition in Germany's mobile market.

German consumers are catching up with the rest of thecontinent by switching to smartphones from basic mobiles,prompting Germany's big four mobile firms to revamp theirtariffs and boost advertising spending.

For Deutsche Telekom and its rivals, their shops areincreasingly important marketing opportunities.

Deutsche Telekom currently operates 1,100 shops in Germanyunder the pink "T" logo, compared to Vodafone's 1,600shops and Telefonica Deutschland 's 1,000 shops. KPN's E-Plus/BASE brand has about 800 shops and plans more.

"Our goal is to add 100 shops in the next 18 months, with orwithout partners," Deutsche Telekom's head of sales in GermanyDirks Woessner told Reuters. Of its existing stores, 300 areoperated as franchises.

Deutsche Telekom reduced shop numbers over the past threeyears and Woessner said the change of strategy reflected theirrenewed relevance.

"The shops are important to us as customers want to test ourproducts and need personal advice," Woessner said.

Late on Thursday Telefonica Deutschland opened a so-calledconcept store in Berlin as part of its new approach to introducenew media to its customers.

The futuristic-looking shop offers customers the chance toplay games and participate in workshops and themed events aswell as browse products and buy.

Although Deutsche Telekom has expanded to foreign markets,its home market is still key. Last year the former monopolygenerated almost 40 percent of total annual revenues there.

It needs to shore up mobile services as its fixed-linebroadband services come under increasing pressure. Cableproviders such as Kabel Deutschland and LibertyGlobal are eating into Deutsche Telekom's business byoffering much faster internet connections at lower prices.