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MobilCom sinks into red
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November 9, 2000: 8:27 a.m. ET
High cost of 3G telecom license forces first loss; stock plunges
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LONDON (CNNfn) - German cellular service provider MobilCom AG announced its first ever loss Thursday and saw its shares plunge as it warned it would struggle to make a profit in the fourth quarter because of the high cost of grabbing next-generation mobile phone licenses in Europe.
MobilCom reported a nine-month deficit of 265.4 million marks ($116 million), and expects to remain in loss in the fourth quarter, said Chief Executive Gerhard Schmid, citing the 16.37 billion marks MobilCom agreed to pay for a license to operate Universal Mobile Telecommunications Standard services in Germany. It will make the payments to buy the the license in stages over the coming years.
MobilCom didn't publish an earnings figure for the comparable period a year ago.
The fourth-quarter warning was the latest evidence that telecom service providers have been suffering as they pay for third-generation mobile-phone licenses in Europe. The new permits will give them rights to exploit advanced technology that offers features as high-speed Internet access and video through handsets.
The company tried to put a brighter face on the dismal earnings by pointing out that it would have recorded a profit of 160 million marks if the cost of building up its business and the UMTS license purchase were excluded. Schmid repeated recent comments that the firm expected to make a net profit sooner than its previously-stated target of 2007, although he did not say when the company now expects to become profitable.
Shares of MobilCom (AMOB), which are traded on the Neuer Markt in Frankfurt, plunged 13 percent to  61.35 Thursday. The stock has fallen approximately 70 percent from its record high of 199, set on March 22. MobilCom is 28.5 percent-owned by France Telecom (PFTE), which suffered a 1.5 percent drop in its stock in Paris.
By the end of September MobilCom said it had added 2.27 million new customers, an increase of 69 percent, increasing its market penetration from 6.6 percent to 10.2 percent. Of the new customers, some 1.5 million of were for its cellular service, a growth rate of 79 percent. The firm now has 3.3 million cellular customers.
-- from staff and wire reports 
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MobilCom
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