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mmO2 to Make Massive 3G Write-Down

May 19, 2003 - source: BWCS

The UK-based mobile operator mmO2 is set to announce a massive write-down of its 3G licences later this week, leaving the company with a multi billion pound loss. According to the Financial Times, mmO2 will write down the value of its UMTS licences by more than £4 billion. The company, which was spun off from the UK telco BT in late 2001, has already written down £1.4 billion from the sale of its loss-making Dutch subsidiary last month. The division was sold for just €25 million (£17.8 million), after mmO2 had invested more than £1 billion in licences and infrastructure over the past few years.

mmO2 is keen to reduce losses by scaling back its operations. Following the sale of the Dutch subsidiary, it is left with wholly owned operations in the UK, Ireland and Germany. The German division, which is the smallest of four operators in that market, has been at the centre of a great deal of takeover speculation in recent months. It is thought that the Dutch operator KPN may be interested in acquiring O2 Germany so that it can merge it with its existing German unit E-Plus to create a sizeable rival for the country’s two dominant players, T-Mobile and Vodafone.

 


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