MobilCom turns a profit

August 9, 2001 Posted: 1027 GMT

LONDON (CNN) -- German telecom company MobilCom reported a second-quarter operating profit on Thursday as it reduced its spending on winning customers.

The company posted second-quarter earnings before interest, tax, depreciation and amortisation of 3.66 million ($3.2 million) after a first-quarter loss of 34.79 million. Analysts expected a loss of about 15 million.

"The reasons for this are an improved cost structure and a drop in subscriber acquisition costs," said MobilCom, which is 28.5 percent owned by France Telecom.

MobilCom, which is burdened with high debts like other telecom operators after spending on third-generation mobile licences and on winning cellphone customers, is now focusing on increasing revenue from its mobile phone users rather than boosting its subscriber base.

The company said sales in the second quarter fell to 669.5 million from 728.64 million in the first three months of 2001.

MobilCom said it had 8 million customers by the end of June, compared with 4.76 million at the end of last year's first half. The customer tally included 5 million were mobile phone users, up from 2.72 million on June 30 last year.

MobilCom also operates its own fibre-optic network and owns 78 percent of Freenet.de., Germany's third-largest Internet service provider.

The company teamed up with France Telecom last year to acquire a licence to offer third-generation wireless phone services, after the French company took a stake in MobilCom.

The French operator has an option to acquire more MobilCom shares from the German company's chief executive and founder Gerhard Schmidt, who owns about 40 percent of the company.

Shares in MobilCom (AMOB) are listed on Frankfurt's Neuer Markt, the market for growth stocks, and traded little changed at 15.30 after the results were announced. The stock reached a record high of 199 on March 22 last year.

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