France Telecom and Mobilcom - tension intensifies

NEWS The spat between France Telecom and its partner for the German mobile market, MobilCom, has continued with the German unit now threatening to sue the French carrier. FT owns 28.5 per cent of the third-largest German mobile network operator but the details of the companies' shareholder agreement are still secret. There has been pressure on FT - not least from the French government, which still maintains a 55 per cent FT stake - to pull out of the German market and sever its MobilCom ties. However, now MobilCom is alleging that noises by FT to do just that have damaged its share price. Indeed, there is a chance that FT may yet be called to takeover MobilCom completely, in line with an earlier financial arrangement. The tussle is significant because it relates directly to FT's ability to have a wide 3G footprint across Europe in the next few years and also its financial viability, given its current debt mountain.