Confirming the rumours (see EI of 20 & 21 March), FRANCE TELECOM is to take a 28.5% stake in the German telephone services company MOBILCOM (1.25 bn euro turnover in 1999 with a workforce of 2,900) for 3.74 bn euro. This operation will be achieved through a reserved capital increase concerning 18.6 million new shares at a unit price of 201 euro, valuing MOBILCOM at 9.47 bn euro. According to the agreement, TELECOM FRANCE will have the possibility, from 2003, of buying the shares belonging to Gerhard Schmid, MOBILCOM's founder who remains the main shareholder with 40% of the capital. The French operator will then apply for a third generation UMTS mobile telephony licence with its new partner in Germany. The two partners will create a joint-venture for that purpose.