An improved portable telephone and an improved inside rearview mirror assembly coacting with the portable telephone to provide an improved mobile telephone system. The portable telephone includes a housing of generally rectangular configuration defining a recess in one face of the housing, a microphone mounted in the housing, an arm pivotally mounted at one end thereof on the housing for movement between a stowed position in which it is positioned in the housing recess and an extended position in which the other end of the arm is positioned in spaced relation to the housing, and a speaker mounted on the other end of the arm. The rearview mirror assembly includes a bracket assembly mounted on top of the rearview mirror and including a holster defining a socket for receipt of the portable telephone. External contacts on the telephone coact with contacts in the socket to establish electrical communication between the telephone and the transceiver of the vehicle when the telephone is inserted into the holster. Alternatively, the mobile telephone may be built permanently into the rearview mirror assembly.