T-Systems International GmbH, the IT services operation of Deutsche Telekom AG, plans to expand its international operations through partnerships rather than direct investment, according to new Deutsche Telekom chief Kai-Uwe Ricke.
T-Systems announced an alliance with Dell Computer Co last week that will see the Round Rock, Texas-based company provide support to the US operations of T-Systems’ Germany-based multinational clients, and more partnerships like this now seem likely.
Ricke said the debt burden of Deutsche Telekom means it cannot invest in expanding both its communications and IT. Speaking at a press conference at the announcement of DT’s third-quarter results, he said: The financial situation of Deutsche Telekom means that it is currently not possible for us to expand internationally in both areas on our own…We are therefore prepared to work with partners in order to expand our IT service activities.
T-Systems made a pre-tax loss of $1.6bn on revenue that grew 3.4% to $808m in the nine months to September 30. Germany is currently one of the most attractive IT services markets as the country’s public sector warms to the idea of outsourcing IT functions to reduce costs. But with a large portion of its revenue coming from supporting its troubled parent company’s network, and a major restructuring plan in the offing, T-Systems is unlikely to attract the attentions of any potential buyers.