Deutsche Telekom and the KirchGroup are planning an alliance for cable television and the Internet, according to a report in Sueddeutsche Zeitung.

The newspaper stated that Deutsche Telekom was considering an investment of more than DM500m ($253m) for a 51% majority stake in Kirch's research and software subsidiary Beta Research, which developed the d-box decoder for Kirch's digital pay-TV services. The collaboration would work together on the introduction of Internet access via cable networks. Kirch has always said that the d-box's capabilities would be extended to include Internet applications such as e-commerce, email and home banking.

Telekom spokesman Ulrich Lissek was quoted as confirming that there are "exploratory discussions" and pointed out that "it still needs the corresponding decisions in our committees if it should come to this".

The newspaper added that both sides had already "sent out feelers" about their intentions to the German Federal Cartel Office, and it was likely that the European Commission would also have to be informed of the proposed alliance.