HELSINKI, Finland—Finnish mobile giant Sonera announced it is retreating from two major wireless data areas—data transaction security and wireless Internet portals.
Sonera said it will close down or sell its Sonera Zed mobile Internet portal business in Turkey, the Netherlands and the United States by the end of this year, cutting about 130 jobs. Sonera cut 70 Zed jobs in May. The company said it will maintain its wireless portal operations in Finland, the United Kingdom, Germany, Italy, the Philippines and Singapore. Sonera said the Zed division will reach earnings positive by 2003, thanks to the cost-cutting measures.
Sonera Zed’s revenues in the third quarter amounted to about US$6.3 million, and it employed about 400 people in the United States and Europe in May.
The Zed portal launched in the United States in March, and offers a variety of services, including ringing tones and icons, games, horoscopes, movie times, restaurant guides and up-to-the-minute stock prices, as well as lottery numbers, quizzes and news. The company said its service is the “best bet” for operators that want to appeal to the youth audience.
The move to withdraw from the U.S. mobile Internet portal market comes after Sonera Zed made several significant content deals, most notably with AT&T Wireless Services. Another deal, announced just over a month ago, was to incorporate FreeRein’s M/Gen Group product. FreeRein just last week ceased business operations.
A Sonera Zed spokeswoman said the U.S. division is currently engaged in positive discussions with strategic investors and continues to be optimistic about the U.S. wireless data services market.
Sonera also said it would cut up to 160 jobs in its SmartTrust division, which provides data security services. The reorganized division will focus on service platforms sold to mobile operators and smart card- and Subscriber Identity Module (SIM) card-based Internet security solutions. Sonera cited the deteriorating financial situation of many of its carrier customers as the reason behind the moves.
In 2000, Sonera’s revenues were about US$1.8 billion. The company employs more than 11,000 people.
