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Sistema, the Russian conglomerate, is seeking to take a significant stake in Deutsche Telekom, the German telecoms group, in exchange for control of its telephone unit, which includes MTS, Russia’s biggest mobile phone operator, according to people familiar with the issue.

Those familiar with the approach told FT Deutschland, the Financial Times’ sister paper, that Sistema had approached Kai-Uwe Ricke, Deutsche Telekom’s chief executive, with the proposal, which has been discussed by the German company’s board.

According to these people, Sistema has suggested the full integration of the Russian conglomerate’s telecoms division into Deutsche Telekom. In return, Sistema would acquire a stake of between 10 and 20 per cent in Deutsche Telekom, which is 32 per cent owned by the German government.

The Russian group could receive the shares as part of an asset-swap, which could see Deutsche Telekom increase its capital stock or buy back its own shares, requiring the group to spend relatively little cash, according to the same people.

Alternatively, the German state could offer some of its shares for which it could later be compensated.

The approach to Deutsche Telekom was among the issues discussed at the fringes of the visit to Germany three weeks ago by Vladimir Putin, the Russian president, German government officials said. Vladimir Yevtushenkov, Sistema’s billionaire executive chairman, was among the listed participants at a meeting during that visit of German and Russian executives in Munich, where Mr Putin as well as Leonid Reiman, Russia’s telecoms minister, were present.

Both Deutsche Telekom and Sistema declined to comment. However, one member of Deutsche Telekom’s supervisory board confirmed that he had dealt with the issue.

Sistema, owned by Mr Yevtushenkov, turned over $7.6bn through its property, telecoms and financial services operations in 2005. The company listed on the London Stock Exchange last year, raising $1.3bn.

MTS, its Moscow-based mobile telephony unit is listed in Moscow and New York, and serves 58.2m customers with subsidiaries in Ukraine, Uzbekistan, Turkmenistan and Belarus.

MTS has made several attempts to gain a foothold in other overseas mobile phone markets in the recent past, but has frequently lost out to financially stronger rivals, such as Vodafone or Telenor.

Deutsche Telekom previously held a 40 per cent stake in MTS, but has gradually reduced this holding, selling off its remaining 10.1 per cent stake last year.

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