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MobilCom plunges into the red in first nine months 

 
Buedelsdorf, Germany: The German telephony group MobilCom said on Thursday that it posted a loss in the first nine months of the current year as a result of the high cost of investment in third-generation mobile phone technology.

MobilCom, which is 28.5-per cent owned by France Telecom, said in its third-quarter earnings report that it sustained a net loss of 133.2 million euros (113 million dollars) in the period from January to September. In the corresponding period of 1999, the group posted a profit of 37.7 million euros. On the level of pre-tax before extraordinary items, the group swung to a loss of 135.7 million euros from a profit of 52.73 million euros a year earlier. The figures were calculated according to German HGB accounting rules.

MobilCom attributed the development to the high level of investment needed for the new generation of mobile phones, the Universal Mobile Telecommunications System (UMTS), as well as the high cost of acquisitions.

"Preparations for our entry into the future UMTS multimedia market required expenditure of 116.06 million euros in the first nine months - in interest, banking charges, staffing and material costs - none of which will be balanced by UMTS-related turnover until the network is launched in 2002," MobilCom explained.

AFP

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