Debitel pulls out of German race for mobile phone licence
The Swisscom affiliate and mobile telephone service provider, Debitel, has pulled out of the German auctions for a licence to operate one of a new generation of mobile phone networks - known as UMTS.
Debitel's withdrawal on Friday came after two weeks and 127 rounds of bidding. It leaves another six contenders in the field who are competing for four to six licences.
Peter Wagner, Debitel's chief executive, said: "If the cost of obtaining a licence exceeds its economic value, quick market access becomes the decisive criterion."
In order to obtain market access, Debitel will now try to join forces with one of the successful bidders after the end of the auction. According to Jens Alder, chief executive of Swisscom, such a move would make Debitel a so-called mobile virtual network operator.
He estimated it would cost between SFr775 million and SFr1.9 billion to set up this operation.
Swisscom explained it could fund future investments, either through a capital increase or by merging its own mobile arm with Debitel.
However, it would first need the approval by the Swiss government, which is a majority shareholder in the group.
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