German telecoms ratchet up email security after NSA scandal

BERLIN (Reuters) - Germany's leading telecoms operator said on Friday it would start channeling e-mail traffic exclusively through its domestic servers in response to public outrage over revelations of U.S. spy programs accessing citizens' private messages.

Deutsche Telekom launched the "E-mail made in Germany" initiative after a month of public indignation over reports on intrusive U.S. snooping based on documents leaked by fugitive former National Security Agency contractor Edward Snowden.

The spying scandal, which has filled German newspapers for weeks, has become a major headache for Chancellor Angela Merkel ahead of a September 22 election. Government snooping is a sensitive subject in Germany due to the heavy surveillance of citizens in the former communist East and under Hitler's Nazis.

"The spying campaign has deeply rattled Germans," Deutsche Telekom Chief Executive Rene Obermann said at a news conference in Berlin on Friday to launch the initiative aiming to make e-mail communication in Germany "more secure".

Deutsche Telekom and its partner United Internet, which account for about two-thirds of all e-mail users in Germany, said they would ensure the encryption of all their clients' e-mails.

The former telecommunications monopoly, in which the German state remains the biggest investor with a 32 percent stake, said all data processing and storage would take place in Germany.

German news magazine Der Spiegel reported in June, citing an NSA document, that the United States taps half a billion phone calls, emails and text messages in Germany in a typical month.

(Reporting by Markus Wacket and Natalia Drozdiak; Editing by Sarah Marsh and Stephen Brown)st