Last week MobilCom became the first European telecommunications group to write off its total third generation mobile telephone assets.

It wrote off just under US0 billion of the value of its licence. This reflected the value of its network of base stations, antennae and other incomplete technology developments. It was one of a number of enterprises from which the German Government raised over US0 billion during its greedy auction processes of 3G licences in 2000; bidders' folly, Government greed.

It has followed in the footsteps of Spain's Telefonica, which has written down the value of its German joint venture mobile 3G licence with Finland's Sonera, to a nominal amount. This fairly demolishes any value on German 3G mobile phone licences.

MobilCom has effectively aborted its 3G mobile phone ambitions in Germany, following directional and strategy disputes with France Telecom, its former joint venture partner in 2001. France Telecom agreed to take over in excess of US billion of the debt incurred by MobilCom as a principle element in the settlement of the dispute. Conversely, the agreement did stipulate that France Telecom would receive 90% of the proceeds of any sale of the 3G assets by MobilCom.By way of understatement MobilCom did state that it was unlikely that they will get the value invested returned.

Theoretically, the licences return to the German State at the end of 2003, unless it raises the ban on secondary trading of these licences. This is very unlikely in the current economic environment, as any bid value would not be far off nominal value. There are now only four mobile operators competing in the German market. It is unlikely that others are going to rush in unless they can obtain licences at rock bottom prices.

As for MobilCom, well it's back to its core service reselling business, which it started just over ten years ago; another back to basics story !