HELSINKI, Finland-There is an old saying in Norway that declares “true arrogance is a city inhabited by Swedes.” However generalized and over the top that expression may be in the 21st century, it still retains general currency status as to how Sweden’s Nordic neighbors, the Norwegians, Danes and Finns, view the region’s prosperous and influential “big brother.”
Sweden’s respected reputation and role in Scandinavia’s business and political life is well deserved and earned. As the Nordic region’s biggest and most export-orientated economy, Swedish capital is usually at the heart of large-scale investment activity in the region, as it was in August 2000, when Telia paid TeleDanmark (TDC) and minority owners US$2.5 billion for NetCom, Norway’s second-largest mobile and fixed-line operator.
It was hardly surprising, therefore, when Telia emerged from the closet to announce a major acquisition-led investment drive in June, encouraging rather than dissuading rumors that its immediate target was to merge Nordic telecom companies Sonera and TDC into a pan-Nordic carrier controlled by the Swedish operator.
“While their neighbors may consider them arrogant, to Swedes this is mistaken as simply being direct and self confident, and what moaning does resound in Norway or Finland is seen as the indignation of once former colonies,” said Erik Nylund, a telecom analyst with Finnish investment bank LP-Invest.
Indignation notwithstanding, Sonera, TDC and Telenor are the first to concede cross-border mergers are essential to protect their home and regional markets from international competition, not to mention the unappetizing prospect of “external-led” hostile takeovers.
In reality, Nordic telecom firms, including Telia, will not survive in an industry where revenue is increasingly generated from worldwide business communications services. “We are aware of our minnow size in a global telecoms marketplace. We know we will not survive alone in this business. We have a strong, technology-driven business. That is real bargaining power when the time comes to deal,” said Sonera Chairman Tapio Hintikka.
That said, these are exciting times for operators in the Nordic region. Companies are expanding their business service offerings, while engaging in selective overseas investments and strengthening their presence on the home fronts.
The Swedish telecom group has made no secret of its mission. “Telia is the biggest of the Nordic telecoms. We are not only the most influential, but we are also the most international. It is only logical that we are eager to consolidate our Nordic position and grow regionally,” said Telia’s Chief Executive Officer (CEO) Marianne Nivert.
Telia’s principal goal is to grow to a size capable of matching Europe’s biggest telecom players-Deutsche Telekom, France Telecom, Spain’s Telef
