Mobilcom AG has folded its systems-integration unit for corporate customers ahead of a likely acquisition by France Telecom SA (FT).
The German fixed and wireless service provider, deep in debt after forking out over 8 billion (US$7.4 billion) for a 3G (third-generation) license, confirmed on Tuesday that it has closed Mobilcom Systems GmbH, a Düsseldorf-based unit focused on delivering fixed and wireless services to corporate users. The company plans to integrate some of its systems integration activities into two other subsidiaries: Mobilcom Kommuikationstechnik GmbH, which focuses on wireless voice services; and Mobilcom CityLine GmbH, which specializes in fixed-network services, including Internet access, telephony and WLAN (wireless LAN). Both units are located at Mobilcom headquarters in Rendsburg-Büdelsdorf near Hamburg.
"The reason for shutting down the Mobilcom Systems is simply money; we want to cut costs wherever we can," said Torsten Kollande, a spokesman for Mobilcom. "We will still target the important market for corporate users but will do so through two units instead of one."
In the first quarter of 2002, Mobilcom's loss before interest, tax, depreciation and amortization, including the costs of starting up its 3G mobile-phone network, totaled 120.7 million, compared with 34.8 million a year earlier. Revenue dropped 29 percent to 514.3 million from 728.7 million.
Mobilcom and FT, which owns 28.5 percent of the German company, have been butting heads over strategy for months. The former French monopoly telephone company, which has been reluctant to contribute money to Mobilcom's 3G infrastructure build-out, is now believed to be in the final round of talks with banks to acquire the German company.