19 May 2003 Mobile phone operator mm02 is set to write-off up to £6 billion from its balance sheet as a result of overpaying for third generation (3G) mobile licences.
Its former parent company BT sank more than £9 billion into licences to operate 3G networks in the UK and Germany at the height of the technology boom in 2000. Now, the company believes that it is unlikely to deliver a return big enough to justify the expenditure.
In addition, the write-down figure will also include the £1.4 billion loss made on the sale of its Dutch unit. It was sold to Greenfield Capital Partners in April for just ?25m. Its German subsidiary is also struggling.
The move by mm02 will put pressure on Vodafone, the world’s biggest mobile phone operator, to follow suit. It has resolutely refused to write-down the value of its 3G investments, arguing that it is in a much stronger position than rivals.
The write-down will coincide with the announcement of mm02’s annual results on 21 May. The company is expected to unveil a halving of pre-tax losses from £731 million to about £380 million, with revenues rising from £4.3 billion to £4.9 billion.
