Tatas eye Deutsche Telekom's IT unit

In line with its strategy of global expansion through acquisitions, corporate giant Tatas are reported to be in advanced stages of talks for buying the IT business unit of German telecom giant Deutsche Telekom.

Tata Group is currently studying the books of Deutsche Telekom's T-Systems unit. Tatas are planning this deal through the European unit of Tata Consultancy Services, German business weekly 'Focus Online' reported on Thursday.

T-Systems is one of the smallest units of Deutsche Telekom. It had reported a revenue of 12.5 billion euro (about Rs 73,000 crore) last year and has a total workforce of over 55,000 people.
When contacted, a TCS spokesperson in Mumbai said the report was completely speculative and the company did not comment on speculations. Officials from T-Systems or its parent company Deutsche Telekom could not be immediately contacted for comments.

According to the Focus Online report, Tata Group's talks with T-Systems follows months-long negotiations held by other two Indian IT giants - Infosys and Wipro - for a stake in the German company.

If successful, it could be another deal after Tata Steel's Corus acquisition when a Tata Group company would acquire a company of much larger size.

TCS had reported consolidated revenue of about Rs 13,500 crore ($2.97 billion) in 2005-06, which is below T-Systems' annual revenue in 2006. Tatas also have a strong presence in the Indian telecom sector through its companies Tata Teleservices Ltd and VSNL.

Deutsche Telekom had reported annual revenue of over $61.35 billion (about Rs 2,75,000 crore) in 2006. Deutsche Telekom AG is an integrated telecom operator while its wholly-owned subsidiary T-Systems is a leading provider of information and communication technology service offerings with presence across more than 20 countries.

T-Systems' offerings include a full range of consulting and outsourcing services. It also provides telecom services for international carriers and corporate customers in sectors across the board.