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Cell firms ink Swiss deals
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November 8, 2000: 7:15 a.m. ET
Vodafone in pact with Swisscom, France Tel buys cell stake from E.On
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LONDON (CNNfn) - Vodafone Group PLC and France Telecom SA, two of Europe's largest mobile-phone operators, raised the stakes in Switzerland's market Wednesday through separate investments in Swiss cell-phone companies, worth a total of nearly $4 billion.
The purchases put rivals Vodafone and Orange, France Telecom's mobile-phone unit, in pole position for the auction of four next-generation cell-phone licenses in Switzerland that is set to begin on Monday. There are currently nine bidders set to bid for licenses, which analysts have estimated could raise up to 4 billion Swiss francs ($2.3 billion).
U.K.-based Vodafone (VOD) agreed to pay £1.8 billion ($2.6 billion) in cash and stock to Swisscom AG for 25 percent of the mobile unit of Switzerland's largest phone company. Swisscom plans to use the proceeds to finance growth and develop its Universal Mobile Telecommunications Standard services - the next-generation cell-phone system.
Separately, German utility E.ON AG (FEOA) agreed to sell its 42.5 percent stake in Swiss mobile operator Orange Communications to France Telecom (PFTE) for at least  1.6 billion ($1.39 billion) - three quarters in stock, the rest in cash. The purchase doubles France Telecom's stake in the Swiss company.
In the Swisscom-Vodafone deal, the companies said they would pool their resources to provide enhanced UMTS services through Vodafone's German mobile-phone subsidiary, Mannesmann D2 Mobilfunk, and Swisscom's German unit debitel. Swisscom Mobile will be split from Swisscom before the deal is completed.
Vodafone will pay in either cash or stock or a combination of the two, in two phases. The purchase, which requires regulatory approval and the consent of Swisscom shareholders, is expected to be completed by the end of March 2001.
The investment links Switzerland's former monopoly telecom operator and the world's largest mobile-phone company, offering global reach in a fast-growing sector that Swisscom isn't likely to attack on an international scale by itself.
Vodafone shares fell 0.5 penny to 257.5 pence in early trading in London. France Telecom added 1 to reach 120.8 in Paris.
According to Switzerland's Federal Office of Communications, the nine bidders for third-generation mobile licenses are Cablecom Management AG, dSpeed AG, Hutchison 3G Europe S.à.r.l., Orange Communications, Sunrise Communications AG, Swisscom, Team 3G (Telefonica, Sonera, One.Tel), Telenor Mobile Communications AS and T-Mobile International AG. 
--from staff and wire reports
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