Telekom to penetrate with fourth pillar

The German telco is calling the business its "fourth pillar", meaning it will be a standalone business next to internet division T-Online, mobile operator T-Mobil and the company's traditional telecoms operations.

Josef Brauner, a member of the board of management sales and service at Deutsche Telekom, said the unit will plan, build and run IT operations, mainly for large multinationals. He predicted it will grow ten times faster than existing IT and telecoms operations, meaning that in five years it will make as much as the core telecoms business.

He said T-Systems will "penetrate old and new economy companies" touting a combination of expertise and infrastructure.

From day one the unit has E11bn (£7bn) in revenue and 37,000 employees worldwide, as it is the marriage of established units such as DeTeSystem and debis IT Services - a Telekom joint venture with Daimler-Chrysler Services.

T-Systems becomes Europe's second largest IT services outfit, and hopes to exploit a market forecast to be worth E100bn (£66.7bn) by 2004.