France Telecom has
agreed to pay 3.74 billon euros ($3.6 billion) for a 28.5 per cent stake
in MobilCom, a German company with a large share of the market for
mobile and fixed telephony services.
Prior to France Telecom’s capital injection, MobilCom has been valued
at 9.47 billion euros ($9.12 billion).
The two companies say they will continue to pursue their common
strategy of offering fixed, mobile and Internet services in Germany to
consumers and businesses. One project at the planning stage is
a joint venture to bid for one of the UMTS 3G mobile licenses when
the German Telecoms Regulatory Authority auctions them later this year.
“Our investment in MobilCom, one of Germany’s most dynamic service
companies, perfectly matches our strategy of becoming Europe’s leading
fixed, mobile and Internet operator”, said Michel Bon, chairman and
chief executive officer of France Telecom.
Bon said France Telecom anticipated very strong growth in the German
market for mobile and multimedia services.
MobilCom has 2 million cellular subscribers and also owns freenet.de AG,
the fastest growing ISP in Germany with over 1 million active users.
Speaking for MobilCom, Chief Executive Officer Gerhard Schmid said
the alliance with France Telecom was a strategic quantum leap in
MobilCom’s development.
“It gives us the financial scope for the acquisition of a UMTS license
and for the construction of the requisite mobile network. In addition,
we will profit from France Telecom’s international activities,” said
Schmid.
Listed on the Neuer Markt since March 1997, MobilCom had revenues
of DM 2.4 billion ($1.22 billion) and profits of DM 244 million
($124 million) in 1999.
France Telecom had revenues of 27.2 billion euros ($26.2 billion) in
1999. In the same year it had 56 million customers, including 14 million
mobile subscribers in France, and operations in more than 75 countries.