Telenor of Norway has agreed to buy the Swedish mobile operations of UK-based Vodafone Group for EUR1.04 billion (USD1.24 billion) to increase its foothold in the Nordic region. Telenor will pay Vodafone around EUR970 million in cash, with the remainder covered by assumed debt. Vodafone will record a charge of around GBP500 million (USD885 million) from the sale and has negotiated a partner agreement with Telenor to allow it continued use of the Vodafone brand and services in Sweden for an unspecified time.
Vodafone Sweden is the country’s third largest cellco by subscribers with 1.52 million users at mid-2005 and a market share of 15.63%. It operates GSM and W-CDMA networks, the latter shared with rival Hi3G. Vodafone launched a datacard-only 3G service at the end of February 2004 and 3G handsets five months later. It has W-CDMA coverage of between 80% and 85% of the population, including the entire Stockholm underground system, but last month it was leaked that Vodafone was planning to stop its 3G rollout as a result of the high costs involved. The cellco’s profit margin is expected to fall to 14% in its current fiscal year ending March 2006, from 43% in 2003.