The European Commission (EC) has approved TeliaSonera’s planned sale of Com Hem and Telia Mobile Finland to EQT and Suomen 2G respectively. The sale of the two businesses was a pre-requisite to the EU’s approval of the merger between Telia and Sonera last year. The disposals were aimed at protecting competition in the Swedish and Finnish markets. The sale of Com Hem, TeliaSonera’s Swedish cable TV arm, to EQT Partners will, the EU hopes, create the conditions needed for increased competition in the fixed line telephony and internet access markets. As it stood at the end of June 2002, the PSTN accounted for 77% of all internet access accounts in Sweden while cable TV was responsible for just 5%. Meanwhile the sale of Telia Mobile Finland – including its valuable 3G licence – to Suomen 2G will ensure that the number of 3G licensees in Finland will remain at four.
Telia and Sonera agreed to merge their businesses in March 2002 to form a Nordic powerhouse worth around USD16 billion. The proposed merger was filed with the European Commission in May 2002 and the share swap commenced the following September. Under the terms of the all-share agreement, Sonera investors received 1.5144 Telia shares for every Sonera share they held. Telia and Sonera opted to merge on the basis that the move would provide enhanced growth potential for both companies. As part of the merger, Telia and Sonera’s holdings in Lietuvos Telekomas and UAB Omnitel in Lithuania and Latvijas Mobilais Telefons in Latvia were also consolidated; TeliaSonera hopes to gain a significant footing in the Baltic markets, where the fixed and mobile penetration rates are considerably lower than in western Europe. TeliaSonera and its subsidiaries serve a potential market of 31 million in the Nordic and Baltic countries.