Jobs to be cut to rid the company of "duplicate functions” in wake of €8.6bn acquisition of E-Plus.
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The carrier formed from the two companies will serve some 47 million mobile customers in Germany.
20 professors and some 500 scientists already hard at work on LTE's successor.
Telefonica is to sell up to 30 percent of its the new combined network to Drillisch.
A local court in the country has found that some Moto handsets infringe a manufacturing process.
Approval is contingent upon Telefonica selling up to 30 percent of its network capacity.
The merged mobile network would have to give up some of its spectrum, the country's telecoms regulator says.
Most customers will be able to upgrade to faster speeds for no extra cost, but those with Apple devices are in limbo.
Patent-licensing firm IPCom claims Apple is infringing on its mobile technology patents.
Nokia alleged that HTC devices violated a patent that covered over-the-air updates.