Reports connected Deutsche Telekom with a plan to offload its troubled T-Systems IT unit, potentially cutting its losses on a division which weighed on the group’s overall performance due to reduced spending in the sector.

German business magazine Manager Magazin reported the operator plans to begin talks with interested parties for sale of the business in February 2022, with plans to seal a deal by the close of the third quarter.

The timeline would round-off a three year turnaround plan for the unit commenced in 2019, when Deutsche Telekom outlined plans for T-Systems to operate as a slimmed-down operation, focused only on IT and digital services.

As part of the move, Deutsche Telekom took control of T-Systems corporate clients.

However, a year into the restructure, CEO Timotheus Hoettges bemoaned its performance, stating the transformation was “not progressing as we would like”, and it had negatively affected revenue and earnings.

A large part of its poor performance was due to COVID-19 (coronavirus) pandemic, with Deutsche Telekom stating incoming orders had declined by 25 per cent during the crisis.

In 2020, the company’s finance chief added the unit would need an additional restructuring on top of the three-year plan, due to reduced spending in the IT sector from the automotive and airline industries.