MobilCom, Namedropper

What's an operator to do when it's up to its neck in financial woes but owns a 3G license in Europe? Why, it tosses around the name of Hutchison Whampoa Ltd. (Hong Kong: 0013) as an "interested party," in order to keep people watching.

Having announced its intentions to cut its workforce by a third (1,850 jobs) and mothball its current 3G activities, which should generate savings of about €130 million a year, MobilCom AG is now looking to secure its future. With the majority of the job cuts expected to come from its 3G-focused workforce, its options are limited.

Currently being kept afloat by the German government's purse strings (see State Elects to Save MobilCom), MobilCom needs either to turn its existing UMTS infrastructure plus license into cash or to find a partner. In both respects, one of the few firms that might have the remotest interest in such undertakings would be Hutchison. In addition to its existing seven 3G licenses around the world, it is looking at the fire sale of Telia AB's 3G assets in Finland (see Europe's 3G Fire Sale) and is so far unrepresented in Germany.

So it's not such an unwise move by current MobilCom große Käse Thorsten Grenz, naming the Hong Kong conglomerate as just one party keeping a close eye on the proceedings as MobilCom restructures and seeks financial clemency from its lenders. Whether Hutchison would be wise to get involved in a market dominated by T-Mobile International AG and D2 Vodafone is a matter for its own strategists.

— Ray Le Maistre, European Editor, Unstrung
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