HELSINKI, Finland-Telia has set US$100 million as the minimum bid price that the Swedish operator will accept for subsidiary Telia Mobile’s assets and mobile business operations in Finland.
The Swedish telecom company’s price-setting exercise is regarded as a direct response to a bid being prepared by U.K. mobile virtual network (MVNO) operator Virgin, which had valued Telia’s Finnish mobile business at US$98 million.
London-based Virgin is the United Kingdom’s fifth-largest wireless company and is part of entrepreneur Richard Branson’s airline-to-retail conglomerate. The company is engaged in moves to expand its business outside the United Kingdom to larger European markets, including France and Germany. Virgin has 2 million U.K. mobile subscribers.
With a 250,000 subscriber base, some Scandinavian analysts, including Nordea Bank, have valued Telia’s Finnish business at between US$100 million and US$150 million.
Virgin recently launched a joint venture with Sprint PCS in the United States. Similar deals have been struck in Singapore and Australia with SingTel, although the Singapore business has since folded. In the United Kingdom, Virgin operates a joint venture with Deutsche Telekom’s T-Mobile.
Virgin is one of a growing number of European telecom companies interested in acquiring Telia Mobile’s Finnish business. Others include Hong Kong-based Hutchison Whampoa, the Finnish Internet services group Jippii, Deutsche Telekom and Elisa Communications. Jippii’s bid is backed by the European venture capital company 3i. Elisa is Finland’s second-largest telecom operator.
The divestment by Telia forms a mandatory part of its US$7.3 billion takeover of Sonera, and falls under the terms of agreement for the clearance of the transactions by the European Commission.
The business earmarked for sale has never registered a profit since Telia entered the Finnish market in 1999. Based on subscribers, the business represents 5 percent of the total Finnish mobile market dominated by Sonera, which holds a 60-percent share.
