A joint project by Nokia (NYSE:NOK)

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with Israeli engineering group Baran to build cellular infrastructure for Germany's Mobilcom has been put on ice, TheMarker has learned.

At the end of the second quarter, Baran stated that the amount of work it was getting had slowed down.

Mobilcom is nearing backruptcy after France Telecom, which holds 28.5% of its equity, decided to withhold further financing, leaving the German government holding the baby. In mid-September Berlin agreed to provide Mobilcom with an immediate infusion of $48.5 million, and to provide $388 million by year-end.

Baran and Nokia were to build infrastructure for 2.5-generation and 3G technology for Mobilcom. But the entire issue of 3G technology in Germany in general is tottering. A few months back Spain's Telefonica and Finland's Sonera announced their withdrawal from the market of 3G cellular networks in Germany.

Baran manager Meir Dor commented that the project in Germany is not advancing at this time, and that the companies are finishing up segments already begun. The main momentum of the project has ground to a halt, Dor continued, saying he does not know when it might resume, and to what extent.

The project, involving the construction of relay stations and towers in the Leipzig area and eastern Germany, was supposed to extend three years. Baran has so far booked revenues of $35 million for one year of work, Dor said. Altogether the project was supposed to have generated up to $80 million for the contractors.