Deutsche is believed to have tabled an offer of about pounds 7.5bn for One2One and a deal could be finalised within the next week.
Though that consideration would fall short of the mooted pounds 11bn price for One2One touted earlier by Cable & Wireless brokers ABN Amro, it is well above the pounds 6.0bn that MediaOne, a 50 per shareholder in the venture, had considered acceptable when the mobile operator was put up for strategic review.
If a deal is agreed, it would mark the second foreign incursion into the British telecoms sector in as many weeks following Monday's pounds 8.2bn takeover of the residential cable assets of Cable & Wireless Communications by NTL, backed with a $5.5bn cash injection from France Telecom.
Last month, Deutsche Telekom raised pounds 7bn from a rights issue as a prelude to launching a campaign to expand outside Germany. In recent months, the telecoms carrier, still majority owned by the German government, has experienced fast eroding domestic market share from an onslaught of aggressive new competitors.
Yesterday, the firm would not comment on German newspaper reports that it is considering bids for Sprint, the US long distance carrier, which is a partner along with France Telecom in Global One, an international telecoms services joint venture. The reports also linked the German carrier, Europe's biggest, with a possible bid for Qwest, which last week swallowed US West, the Rocky Mountain area regional phone company, in a $35bn takeover.