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German Gov may have to re-auction Mobilcom's license
September 16, 2002
The German mobile operator, Mobilcom, is about to file for bankruptcy
as early as next week if no backers are willing to save the struggling
3G license holders.
If Mobilcom files for bankruptcy and is liquidated, the 3G license
would go back to the government with no refund and the radio frequencies
would be auctioned.
Mobilcom was among six companies that paid about $8.2 billion apiece
in 2000 for the 3G licenses to offer advanced phone service in Germany.
But the new 3G service remains unproven and has yet to generate
revenue, and companies face the extra burden of building expensive
networks in Germany and elsewhere amid sluggish European economies.
In July, Spain's Telefonica and Finland's Sonera halted operations
by their German venture Quam, and had to write off the license costs,
cutting the number of active 3G companies in Germany to five. Most
experts think the market won't support that many.
Remaining 3G license holders are Deutsche Telekom's T-Mobile, Vodafone,
mm02, and Dutch telecommunication firm KPN's E-Plus.
The costs of building a 3G network were at the heart of the clash
between France Telecom, which is 55 percent owned by the French
government, and Mobilcom's founder and former chief executive, Gerhard
Schmid.
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3G Motorola A920
