Deutsche Telekom chief Kai-Uwe Ricke said on Monday that talks over selling Siris were at a very advanced stage, but that the price of the sale would be much less than the 300m euros ($332m) some industry analysts had expected Siris to fetch.
The German incumbent paid 732m euros ($809m) for Siris in 1999, and rolled it into its data and network services operation T-Systems. Siris’ value was written down by 473m euros ($523m) during the third quarter of last year, and it made a loss on revenue of 230m euros ($254m). Siris has 500 employees.
DT spokesman Hans Ehnert told ComputerWire: Siris had a small market share in a very competitive market. We had a choice of either selling up or building through acquisition which is not something we wanted to do.
The sale of Siris is still subject to the approval of relevant French authorities, and T-Systems said in a statement yesterday that a corresponding proposal has been submitted to employee representatives of both companies.
T-Systems, which is headed by Konrad Reiss, has been set a target by its parent organization of cutting its costs by more than 500m euros ($484m) by the third quarter of 2003. On Monday, DT announced that T-Systems made a pre-tax loss of 300m euros ($332m) on revenue of 3bn euros ($3.3bn) in the fourth quarter ending December 31, 2002.
Reiss said that T-Systems does not plan to pull out of France altogether following the sale of Siris, and added that the operation would focus on IT services and telecommunications projects with large multinational clients and carriers. Speaking at the CeBIT exhibition in Hannover, Germany, Reiss said that T-Systems will post growth in both revenue and cash flow in 2003 on the back of new orders signed last year. T-Systems reported a 5% decline in full-year 2002 sales to 11.3bn euros ($12.5bn).
Source: Computerwire
