Deutsche Telekom AG has signed a contract to sell its six remaining regional cable TV companies to U.S.-based cable group Liberty Media for Euros 5.5bn according to Reuters.

The sale forms part of Deutsche Telekom's efforts to reduce its debt mountain of Euros 65.5bn and will make Liberty Europe's largest cable company with 20 million customers.

The German telecoms giant, Europe's number two telecom operator by market value after Vodafone, is aiming to reduce its debt to about Euros 50bn by the end of 2002.

Deutsche Telekom shares, which briefly dipped to a fresh 3-1/2 year low of Euros 16.06 on Monday August 3, rallied over three percent in early Tuesday trade to stand at Euros 16.95.