Communications firm Kcom is set to outsource its Integration and Managed Services (I&MS) unit, which includes integrator Affiniti, to BT with an announcement expected tomorrow.

The Telegraph reports that the deal could help facilitate an annual cost reduction of £10m. Channel onlookers have long predicted that Affiniti, which Kcom acquired in 2004, would eventually be spun off by the Hull-based company.

Such speculation was not dampened when incoming Kcom chief executive Bill Halbert launched a strategic review in November following a tough year for the I&MS arm. The division has lost well over 200 staff in the last 18 months as annual revenues dropped 10 per cent in the nine months to the end of 2008.

The Telegraph suggests that the BT deal could lead to Affiniti and the other smaller firms which make up I&MS being demerged from Kcom. It also claims the telecoms firm could look to sell off its business operating Hull's telecoms infrastructure.

Kcom is soon to publish full-year results for the 12 months to the end of March, with pre-tax profit expected to more than quadruple on last year to £19.5m. However, revenue is anticipated to decline more than 10 per cent from £517m to about £470m.