Debitel in Vodafone 3G deal

Debitel, the German mobile phone service provider majority owned by Swisscom, said on Tuesday it had struck an agreement with Vodafone, Germany's largest mobile phone operator, to provide third-generation services.

The company, which was the only bidder not to be awarded a 3G, or UMTS, licence at the country's auction in August last year, will resell Vodafone products and use its network as a "virtual operator" to offer its own products and services starting in 2003.

Debitel declined to release financial details for the deal but the transaction is understood to involve no upfront payment. The company will pay a variable rate depending on the time spent by its users on Vodafone's network and the amount of data transferred.

Rudi Schmidt, spokesman for Debitel, said the company was in talks with four other licence holders and wanted to offer its customers about 90 per cent of the products available in the market when UMTS comes on stream.

The company has not revealed the name of its potential partners but it is understood to be talking to T-Mobile, Germany's second largest operator and a subsidiary of Deutsche Telekom. T-Mobile and Vodafone largely dominate the German market with more than 20m customers each.

Debitel, which currently acts as a reseller of first-generation mobile services, said on Tuesday it had 8.6m customers at the end of last year.

The six holders of German UMTS licences have been conducting intensive talks between each other and with RegTP, the German telecommunications regulator, aimed at boosting co-operation in order to cut investments in their third-generation networks.

Although there are strict legal limitations on how much licence holders can co-operate, RegTP has invited the operators to put forward concrete plans, which it will examine "with an open mind", while the German government has welcomed the idea of a limited link-up between operators.

Separately on Tuesday, Mobilcom, one of the six licence holders, said it had reached a preliminary agreement to acquire Hutchison Telecom, a wholly-owned German subsidiary of Orange, the UK mobile operator itself majority owned by France Telecom. France Telecom owns 28.5 per cent of Mobilcom.

Hutchison Telecom, a mobile services provider, will bring the number of Mobilcom customers from 4.5m to 5.25m. The undisclosed consideration will likely be paid in non-voting Mobilcom shares.