LONDON -- Shares in Europe finished in positive territory on Friday, helped by the favorable response in U.S. markets to the latest set of employment figures and a broad rally in telecom stocks on diminishing fears about the cost of the third-generation mobile phone licenses.

The

FTSE 100

closed 77.9 points, or 1.2%, higher at 6,497.5 and the

Techmark

rose 1.2%, gaining 41.6 points to 3,446.6.

Vodafone AirTouch

(VOD) - Get Report

gave the Footsie a huge lift by rising 7p, or 2.6%, to 319 ($4.82) on volume of 168 million shares and

British Telecom

(BTY)

reversed an earlier fall to stand 17p higher, or 2.1%, at 915.

Cable & Wireless

(CWP)

remained well bid in the wake of recent takeover speculation involving

Deutsche Telekom

(DT) - Get Report

. C&W ended up 40p, or 3.4%, to

12.30, while Deutsche Telekom was also helped by news it would invest up to $1 billion with

Singapore Telecom

and

Globe Telecom

in a mobile phone venture in The Philippines. DT was up 1.80 euros, or 3.1%, at 60.40.

BSkyB

(BSY)

, however, fell sharply following reports in the French press that

Vivendi

(VVDIY)

could back track on earlier announcements and sell its 20% stake in the pay-television company. BSkyB ended down 38p, or 2.9%, to

12.55

The hopes that telcos might not have to pay so much for 3G licenses helped European markets as well. The

CAC 40

in Paris closed up 108.6, or 1.7%, at 6,562.6. Late in the German trading session, the

Xetra Dax

in Frankfurt was up 81.4, or 1.2%, at 7,032.5 and the Neuer Markt's tech-heavy

Nemax 50

index was down 62.9, or 1.2%, at 5,325.2.

Both phone equipment makers and operators did well.

Alcatel

(ALA)

was 1.80 euros, or 2.5%, higher at 73.80 ($70.11) and

Nokia

(NOK) - Get Report

climbed 1.41 euros, or 2.6%, to 55.87.

France Telecom

(FTE)

rose 3.00 euros, or 2.1%, to 148.00 and

Telefonica

(TEF) - Get Report

ended up 0.60 euro, or 2.5%, at 24.40.