HELSINKI, Finland-Danish, Swedish and German telecom companies TDC, Telia and Deutsche Telekom are showing an interest in acquiring the Stockholm, Sweden-based communications and financial services group Kinnevik’s 33.5-percent shareholding in mobile operator Millicom International Cellular (MIC), headquartered in Luxembourg.
Kinnevik, whose future remains the subject of much market deliberation following the death of its founder and chief executive officer (CEO), Jan Stenbeck, in August, has been reviewing its telecom-connected holdings since July 2001. These holdings include cable network operator Viking Telecom.
The death of Stenbeck has set in motion a groupwide review of all business areas, which include worldwide television, publishing and financial services. Telecommunications is the one business area that Kinnevik has consistently downsized since 1995 and remains the most vulnerable and debt-burdened of all its business interests.
Were Kinnevik to divest its stake in MIC, this action could trigger a takeover bid for the company. Interest in MIC is heightened by the company’s 11.8-percent holding in Tele2, a pan-European provider of fixed and mobile telephony, data network and Internet services. The company has 15 million customers in 21 countries.
MIC’s core business area is centered on providing telephony services, primarily in emerging markets where the basic telephone services are often inadequate and where economic development and political change create new demand for communications services. The company’s primary strategy is to apply for cellular licenses via joint ventures with prominent local business partners.
Listed on Nasdaq, MIC reported an operating loss of US$38.2 million on revenues of US$148.7 million for the second quarter. Debts, 85 percent of which are loans under service, amounted to US$1.3 billion. MIC posted an after-tax loss of US$66.1 million on revenues of US$334.3 million in 2001.
MIC’s portfolio of assets currently comprises 19 cellular operations in 18 countries in Latin America, Asia and Africa, in total, covering a population under license of more than 496 million people.
In addition, MIC holds four high-speed wireless data businesses in Latin America, Africa, Asia and the United Kingdom. MIC also operates Multinational Automated Clearing House, one of the world’s largest GSM clearinghouses.
In July, MIC reported a 28-percent annual growth in total subscribers to 3.7 million worldwide. The annualized growth recorded in Asia was 49 percent, increasing the number of subscribers to 1 million. Around 2.2 million are prepaid customers.
On Thursday, MIC said it sold its GSM license in the Democratic Republic of Congo to Orton Investment Holdings.
