Two-week deadline for MobilCom decision

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The Independent Online

France Telecom yesterday said it would decide the fate of its stricken German affiliate MobilCom in two weeks, heralding the end of a bitter and prolonged dispute.

France Telecom yesterday said it would decide the fate of its stricken German affiliate MobilCom in two weeks, heralding the end of a bitter and prolonged dispute.

France Telecom and its mobile phone subsidiary Orange, which owns 28.5 per cent of MobilCom, said they were postponing their board meetings until 12 September and their half-year results until 13 September ­ one week later than scheduled.

"This additional period is necessary to finalise the analysis which will allow the board to take a decision on MobilCom," France Telecom said in a statement released after the stock market closed.

The news came as MobilCom warned it was considering writing off some of the value of the third-generation (3G) mobile phone licence that cost it ¤8bn (£5bn). The company said it was reviewing its 3G business plans "in the light of changed market conditions" and would take "concrete action" in the current quarter.

MobilCom also unveiled a ¤150m write-off in its second-quarter figures, largely to cover the fall in value of D Plus ­ a phone company it bought in 1999. The charge swelled MobilCom's losses in the first half of the year to ¤289.3m from a loss of ¤71.4m in the same six-month period a year before. Sales were ¤1.034bn down from ¤1.398bn.

MobilCom warned it did not see "any improvement" in the operating environment for the rest of the current year. "Material improvement in the results is only expected during the course of 2003," it warned.

Industry sources said France Telecom, which is expected to bid for the cash-strapped MobilCom to appease its creditor banks and keep its foothold in Germany, had started due diligence. MobilCom faces insolvency without its continued backing. But sources close to the talks warned a prolonged dispute with MobilCom's former chief executive, Gerhard Schmid, and talks with MobilCom's 17 banks about rolling over a ¤4.7bn loanremained unresolved.

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