Deutsche Telekom AG (DT) has decided to seek a partner for expanding the international footprint of its IT unit rather than investing directly in new operations, the company said Thursday.
The business model of T-Systems International GmbH is “relatively stable compared to that of its competitors,” said Kai-Uwe Ricke, DT’s newly appointed chief executive officer, at the group’s third-quarter financial press conference in Bonn, Germany. But the unit, he said, requires “an international dimension” to deliver both IT and telecommunication services to large enterprise customers.
“The financial situation of Deutsche Telekom, however, means that it is currently not possible for us to expand internationally in both areas on our own,” Ricke said. “We are therefore prepared to work with partners in order to expand our IT service activities.”
T-Systems competes against the likes of Electronic Data Systems Corp., IBM Corp., AT&T Corp. and troubled WorldCom Inc.
The IT services arm consists largely of the former Debis Systemhaus GmbH, which DT acquired from car manufacturer DaimlerChrysler AG. In addition to IT services, T-Systems manages DT’s global communications network.
Suffering from the weak economy, T-Systems saw third-quarter revenue fall 3.4 per cent to 8.3 billion euros (CDN$13.3 billion as of Sept. 30, the end of the period being reported).