MobilCom slashes jobs, halts 3G network rollout

Struggling German telecoms operator MobilCom said today it would freeze the rollout of its new generation (3G) mobile network…

Struggling German telecoms operator MobilCom said today it would freeze the rollout of its new generation (3G) mobile network and cut over a third of its workforce in a bid to salvage parts of its core business.

MobilCom narrowly avoided insolvency earlier this month when the German government brokered a €400 million rescue deal after its heavily indebted partner France Telecom cut off vital funding to the group.

MobilCom, which posted a net loss of €172.8 million in the second quarter, said it would shed 1,850 full time jobs from its 5,000-strong workforce in a plan aimed at saving some €130 million a year.

"A short term operational aim is to return the service provider business to profitability in the first half of 2003," the group said in a statement.

MobilCom shares, which have collapsed in value as the group's troubles unfolded over recent months, were sharply higher, trading up 17.62 per cent in early morning trade.

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