• T‑Systems sold its business in Malaysia to investors last month after major customer Shell moved IT operations to India, TelcoTitans has learned.

T‑Systems exits Malaysia

T‑Systems exits Malaysia

Source: T-Systems

T‑Systems sold its business in Malaysia to private investment holding firm Quintephi Sdn Bhd at the end of November 2020, TelcoTitans can reveal.

The deal, for an undisclosed sum, came as part of a management buyout, according to a Deutsche Telekom spokesperson. The transition is expected to be completed in mid-2021, at which point T‑Systems will no longer have a presence in the country.

The decision to exit the Malaysian market comes after T‑Systems’ major global customer and partner Shell moved IT operations from Cyberjava, Malaysia to Bangalore, India, as part of a multi-year project to consolidate IT resources (Deutsche Telekomwatch, #77 and #79). T-Systems then undertook its “follow the customer” policy, and the transition to India will be finalised by mid‑2021, according to the spokesperson.

T‑Systems Malaysia was established in 2008 to serve Shell. The oil giant has been a significant customer since at least 2008 and the relationship was renewed in 2012 with a five-year contract focused on data centre systems consolidation and cloud computing migration (Deutsche Telekomwatch, #12). In 2017, T‑Systems was understood to have about 1,400 IT staff dedicated exclusively to supporting its relationship with Shell (Deutsche Telekomwatch, #61).

T‑Systems had more than 800 employees in Cyberjava, Malaysia in 2019. Launched with Shell as an anchor customer, the Malaysia business was said to have expanded to serve multinational customers in 15 countries, acting as an ICT services hub for the Asia-Pacific region.

T‑Systems — which remains in the midst of a long-running business reorganisation, and stepping up the programme following the COVID‑19 pandemic — also recently sold its South African business, to local ICT service provider Gijima, after walking away from a major ICT contract with state-owned logistics business Transnet. It has sold or pared back numerous in‑country units over the past decade, as part of the push to improve profitability, and more recently consolidated management of European market businesses within a new, sub‑regional leadership structure (Deutsche Telekomwatch, #88, #100, and passim).

Although its shutdown is apparently tied to a client decision, T‑Systems Malaysia is the latest in a long line of country units to be jettisoned or reworked by T‑Sys over the past decade, in a bid to improve its profitability (DeutscheTelekomwatch, #88, #100, and passim).

The division — which remains in the midst of a long-running business reorganisation, and stepping up the programme following the COVID‑19 pandemic — also recently sold its South African business, to local ICT service provider Gijima, after walking away from a major ICT contract with state‑owned logistics business Transnet.

A raft of in-market functions have been offloaded or cut back by the enterprise services unit, as it seeks performance improvement.

T Systems efficiencies programme, country business unit impact, FY13–FY20
MarketActionYear

Sources: DT and Deutsche Telekomwatch.

Belgium

Operations were “optimised” (no further detail).

FY14

Czech Republic

Local unit was merged with T‑Mobile Czech Republic (Europe segment).

FY14

France

T‑Systems France systems integration unit was exited.

FY13

Germany

Desktop services subsidiary T‑Systems Individual Desktop Solutions was sold to AURELIUS Group.

FY14

T‑Systems DDM was sold to regiocom.

FY15

Hungary

Magyar Telekom’s (MT) business customer operations, which were previously “organisationally assigned” to T‑Systems, were transferred to the Europe operating segment and management by MT. In FY19, it was announced that the large enterprise component of these operations were pending a sale to local player 4iG.

FY16

Italy

T‑Systems Italia was sold to Engineering company Ingegneria Informatica.

FY13

Japan

Operations were “optimised” (no further detail).

FY14

Malaysia

A deal was agreed to sell T‑Systems Malaysia to investment group Quintephi.

FY20

Poland

Local unit was merged with T‑Mobile Poland (Europe segment).

FY17

Singapore

Operations were “optimised” (no further detail).

FY14

South Africa

T‑Systems South Africa was sold to local ICT service provider Gijima.

FY20

Spain

Eltec, the field services unit of T‑Systems Iberia, was divested to Quantum Capital Partners.

FY15