Telenor to buy out BellSouth and take full control of Sonofon

11 Dec 2003

Pan-Nordic telecoms group Telenor has agreed a DKK3.68 billion (USD600 million) deal to take full control of Sonofon, Denmark’s second-largest mobile operator, by buying out the stake held by US telco BellSouth. The two shareholders have repeatedly clashed over Sonofon’s 3G strategy and BellSouth has been reportedly looking to exit the cellco for some time. Telenor will pay BellSouth DKK3.05 billion in cash for the 46.5% stake and a further DKK630 million to repay a shareholder loan. The deal is subject to approval by the Danish telecoms regulator and the EU, and is scheduled to be completed in the first half of 2004.

Sonofon has been Denmark’s second largest mobile operator since its launch in 1992. At the end of September 2003 its total customer base stood at 1.3 million, up from 1.26 million at the start of the year, but still some 1.1 million subscribers behind market leader TDC. It has launched a number of new services over the past few years in a bid to make up for the slowing subscriber growth in the country. GPRS was introduced at the beginning of 2001 and in January 2003 it launched MMS over infrastructure provided by End2End and Openwave Systems. The differences in its shareholder’s opinions meant that the cellco did not enter a bid in the 3G auction of 2001, leaving it as the only main player without a UMTS licence. It has, however, announced plans to purchase capacity from 3G operators on terms which it hopes will enable it to offer attractive and competitive products.

Denmark is home to four main mobile network operators – TDC Mobil, Sonofon, Orange and Telia Danmark – although with the award of an UMTS licence to the Hutchison Whampoa-backed Hi3G in 2001, a fifth looks set to enter the sector in the very near future. There were 4.8 million mobile subscribers in the country at the end of September 2003, equating to a cellular penetration rate of 89.1%.

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