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Telekom may float mobile and Net arms

DEUTSCHE TELEKOM said yesterday it was prepared to float its mobile and Internet businesses to fund future acquisitions.

Dr Ron Sommer, the chief executive, said the company planned to create a new share "currency" to grow its business. He said Deutsche would retain a majority shareholding.

The announcement came as the company, which owns German market leaders T-Mobil and T-Online, said its pounds 8.4bn purchase of the UK's One2One mobile network would be followed by further acquisitions or mergers in Europe and the US.

But Jeffrey Hedberg, head of Deutsche's international activities, denied his company was in talks with Spain's Telefonica. He said speculation the two groups were about to merge "is not based on any facts", but did not rule out a future alliance.

Deutsche would not be pressed on its relationship with France Telecom. Their alliance foundered earlier this year when the German company bid unsuccessfully for Telecom Italia.

Deutsche and France Telecom each have 10 per cent of US long-distance carrier Sprint. There is speculation they are in talks about Deutsche acquiring the French group's share.

Despite the failure of the Telecom Italia bid, Dr Sommer said there was no reason his company should not pursue other large mergers. He described the One2One deal as "a major step in the development of our international business" and said: "The acquisition... is clearly not the end of our ambitions in this respect."

Dr Sommer said Deutsche's takeover of One2One offered potential for "wide ranging synergies", including the implementation of Universal Mobile Telecommunications System allowing cellphones to offer hi-tech services.

One2One managing director Tim Samples said his company would become an Internet Service Provider in the next six months. Deutsche will focus on its four strategic pillars - mobile, consumer Internet, data IP and access.