MobileCom, the struggling German operator, has announced plans to reduce its workforce by 40% and to freeze plans to roll out a 3G network. The start of 3G services in Europe has been hit by a number of set backs – particularly in Germany, where Sonera and Telefonica have already decided to abandon their 3G joint venture.
Approximately 1,850 jobs are to go at MobilCom, which has a total workforce of 5,000. The move will save the operator about E130 million with the hope of returning the company to profit in H1 2003.
MobilCom’s problems stem from the cost it incurred in obtaining a 3G license and the investment needed to develop a 3G network, combined with a long-running battle between the company’s two biggest shareholders. It has just 4.9 million subscribers, and was saved from collapse by the promise of a E400 million government loan.