3G costs push Mobilcom into red for first time

date: 13th February 2001, source by: FT.com

Mobilcom, the German telecoms group, said the costs of buying a third generation mobile phone licence and increasing its share of the domestic market had resulted in full-year net losses of DM174.5m ($82.7m) in 2000, compared with profits of DM170.8m in 1999.

The company, which paid E8.4bn ($7.8bn) for a German 3G licence last August, reported losses per share of DM3.4, which were lower than the DM4.15 per share expected by analysts.

It attributed the losses, the first since it floated on Frankfurt's Neuer Markt in 1997, to the cost of building its 3G business, investing in customer growth and restructuring measures.

Mobilcom shares were down more than 4 per cent in early trading at E28.60, they are well down from their 52-week high of E210. The shares lost more than a quarter of their value in December when it emerged that Mobilcom was struggling to finalise E5bn of bank loans needed to build its 3G networks.

Mobilcom has also been under growing pressure to increase its mobile phone subscribers, so that it can earn sufficient revenues from 3G services to repay the huge debts it has taken on over the past year to cover the investments.

The company, in which France Telecom owns a 28.5 per cent stake, said the number of subscribers for its mobile service had more than doubled to 3.98m at the end of 2000. It gained 660,000 new customers in the fourth quarter.

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