Telenor and TeliaSonera to merge in Denmark

Norwegian telecom operator Telenor and Swedish-Finnish rival TeliaSonera on Wednesday said they would merge their operations in Denmark, which last week was deemed the world's most connected country.

Telenor and TeliaSonera to merge in Denmark
Photo: Håkon Mosvold Larsen / NTB scanpix

Each group would hold 50 percent in a joint venture that would have a 40 percent market share and annual revenue of over nine billion kroner ($1.5 billion), the two companies said.

"The need for consolidation in the Danish telecom market has been apparent for a while as operators face continued pressure on revenues and profitability, limiting the room for investments and innovation," Telenor said in a statement.

The Nordic countries have some of the world's most mature telecom markets, and Denmark last week overtook South Korea as the world's most connected country in the International Telecommunications Union's ICT development index.

The survey takes into account Internet and mobile phone access and use, and the population's competence with the technology.

The merger would create Denmark's biggest mobile carrier by number of customers, just ahead of incumbent TDC, which holds a 39 percent market share.

Denmark has long been a weak spot for the otherwise profitable Telenor, racking up an operating loss of 86 million Norwegian kroner ($12.2 million) in the first nine months of the year.

TeliaSonera said the deal would create "significant synergy potential".

The transaction required approval from the EU Commission and was expected to close in 2015, the companies said.

In Norway, another mature market, TeliaSonera continues to compete with Telenor and has sought to buy the assets of Sweden's Tele2, but the country's competition watchdog has said it may block the deal, which would give the new group a 40 percent market share.

Telenor and Sweden's Telia aborted a merger in 1999 after disagreement over, among other issues, where to base the group's head office for mobile telephony, prompting the Swedish communications minister to accuse Norway of being "the last Soviet state".

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Norway’s Telenor sells out of India as tycoon weighs in

Indian telecom giant Bharti Airtel will buy the local operations of Norway's Telenor, it said Thursday, as the ultra-competitive mobile market is shaken up by the country's richest man.

Norway's Telenor sells out of India as tycoon weighs in
Former Telenor CEO launching the company's ill-fated India business in 2009. Photo: peerdahl/Wikimedia Commons
Tycoon Mukesh Ambani launched Reliance Jio's 4G network in September with an audacious free service for the rest of 2016, followed by vastly cheaper data plans and free voice calls for life.
The move forced rivals to slash their tariffs and scramble to match the deep pockets of Jio, which is backed by Ambani's vast energy-to-chemicals conglomerate Reliance Industries and picked up 100 million subscribers in its first six months
Bharti's acquisition is the latest movement towards consolidation in India's telecoms sector as major players try to position themselves to best face the tough new environment.
The move, which still needs to be approved by regulators, will enhance its coverage, the company said in a statement to the Bombay Stock Exchange (BSE), and see Telenor exit India.
“The proposed acquisition will include transfer of all of Telenor India's assets and customers, further augmenting Airtel's overall base and network,” the Indian firm said in the statement.
Last month British mobile phone behemoth Vodafone announced that it was in talks to merge its Indian unit with Mumbai-based Idea Cellular in its own move to counter Jio's rise.
That deal would create India's largest telecoms company. Global brokerage firm CLSA estimated that the pair would command a combined 43 percent share of market revenue, ahead of Airtel, which is currently the market leader, on 33 percent.
Reliance Communications — owned by Ambani's brother Anil Ambani — and Tata Teleservices, part of the sprawling salt-to-steel Tata conglomerate, are also reportedly in talks to join forces.
Reliance merged with telecom operator Aircel in September last year. Bharti Airtel's shares surged more than five percent in Mumbai morning trade following the Telenor deal announcement.
“The decision to exit India has not been taken lightly,” Sigve Brekke, Telenor Group CEO, said in the statement.
“After thorough consideration, it is our view that the significant investments needed to secure Telenor India's future business on a standalone basis will not give an acceptable level of return,” he added.
Telecoms analyst Baburajan Kizhakedath said Telenor was quitting India because the intense competition meant there was no scope for growth. “The Airtel-Telenor deal is probably the best exit route for Telenor,” he told AFP.