HELSINKI, Finland—Telia Mobile, the Nordic region’s biggest mobile operator, is moving to strengthen its position through acquisitions. The company is soon expected to bid for Sonera’s mobile telephone business in all Nordic and Baltic states, excluding Finland.
Telia Mobile has a strong presence in Sweden, Finland, Denmark, and to a lesser extent, in Norway. The company has targeted acquisitions, financed through debt and its own funds, as the most efficient way of growing its market position on a regional basis.
“There is no question but we are financially strong enough to make large-scale acquisitions happen in Scandinavia. The chief issue is finding suitable acquisitions at the right price,” said Kenneth Karlberg, Telia Mobile’s chief executive officer (CEO).
In 2001, Telia embarked on an ambitious quest to establish a major European telecom company through a strategic merger with Sonera and Danish telecom operator TDC. However, talks collapsed when the stock prices of all parties concerned showed significant dips in value. Telia Mobile’s revenues rose 33 percent in 2001 to US$2 billion.
Telia has now spotlighted the mobile telephone side of Sonera’s and TDC’s businesses. “An acquisition or strategic partnership would allow Telia Mobile to better compete on prices and services with global operators, and operators who offer services across borders,” said Karlberg.
“Our clients must be able to move around Europe and everywhere feel they are Telia clients,” Karlberg said.
Telia’s mobile operations in Finland and Denmark, which have a combined 400,000 subscribers, continued to lose money in 2001. Telia believes that it needs a subscriber base twice this level to generate profits.
Telia’s determination to grow its business is linked to competitive pressure in its home Swedish market from international telecom operators. This will intensify in 2003 when rivals Orange and Hutchison Whampoa start offering services on their Swedish third-generation (3G) networks.
