Deutsche Telekom may sell its UK and Dutch units as early as next year. The Financial Times Deutschland reported on Tuesday that local management must improve results if they are to stay.
The newspaper said that the telecommunications firm had looked in to selling the units in the past, and would again consider in 2013, citing company sources.
Deutsche Telekom is seeking ways to preserve its market share, while re-investing in the United States after its £24 billion deal to sell its T-Mobile USA unit to AT&T fell through last year.
Deutsche Telekom is yet to comment.