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Sunday, 25 November, 2001, 13:40 GMT
MMO2 mulls German exit
O2 logo
MMO2 is now a separate company from BT
MMO2 - the mobile phone business spun off from British Telecom - is mulling whether to pull out of Germany and the Netherlands.

MMO2 brands
BT Cellnet (UK)
Viag Interkom (Germany)
Telfort (Holland)
Esat Digifone (Ireland)
Manx Telecom (Isle of Man)
Genie mobile internet business (Europe)
The revelation comes just one week after the new company started life as an independent entity from BT.

"We are not going to stick in there, come what may," MMO2's chief executive Peter Erskine said in an interview with The Observer newspaper.

"If we are not able to meet our targets, and the businesses fail to perform, we will not hesitate to sell or take other remedial action."

If MMO2 does decide to abandon its operations in Germany and the Netherlands, it will mean almost every overseas asset BT acquired since 1994 has been sold.

Losing millions

Analysts suspect the medium size of MMO2 may lead it to become a takeover target.

Its operations outside of the UK are small and are still thought to be losing the firm millions of pounds as it struggles to build on a relatively small customer base in these markets.

We are in control of our destiny in a way that was impossible in the past

Peter Erskine

MMO2 - which previously marketed its mobile phones under the BT Cellnet brand - has also lost market share to its rivals Orange and Vodafone in its home marketplace.

The birth of MMO2 from its parent company was always expected to cause a shake-up in strategy.

And one of the key advantages of the demerger was that the mobile arm would be free to act in its own interests without being forced to take into account the strategies of the rump of BT that has been left behind.

Stock market star

"We have cut the umbilical cord and that is a great feeling," Mr Erskine said.

"We are in control or our destiny in a way that was impossible in the past.

"There are no sacred cows... Of course we want Germany to work, but if it doesn't, we don't have to hang in there."

MMO2 began life as a separate company on 19 November and was a star of the London Stock Exchange during its first week.

The stock rose 5% on its first day from a starting point of 80p, and climbed 16% during the first week to finish at 93p.

See also:

19 Nov 01 | Business
Strong start for BT's MMO2
08 Nov 01 | Business
BT unveils massive loss
23 Oct 01 | Business
BT approves mobiles spin-off
23 Oct 01 | Business
MMO2: A risky investment?
24 Sep 01 | Business
BT chiefs mull total split-up
05 Sep 01 | Business
Mall disputes BT name change
03 Sep 01 | Business
BT unveils new mobile brand
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