Icelandic newspaper Morgunbladid is reporting that the Icelandic government is considering selling its indirect 57.2% stake in Vodafone Iceland following enquiries from interested parties. The broadsheet claims Foroya Tele (Faroe Telecom) is the most likely bidder for the stake. Although the company carries the Vodafone brand, the British company owns no equity in the firm, but rather franchises the brand to Teymi, the company’s ultimate owner. The Icelandic government owns the stake in the telco after it nationalised the collapsed banking group, Landsbanki which had held the stake in the telco.
According to TeleGeography’s GlobalComms database, Vodafone Iceland was established in April 2003 after the leading private mobile operator Islandssimi forged a partner network agreement with the UK’s Vodafone Group. The previous year Islandssimi had merged with two of Iceland’s smaller service providers, TAL and Hallo, in a bid to provide a stiffer challenge to the country’s largest telco by subscribers Siminn. In October 2006 Vodafone Group announced it would license its brand name to Og-Vodafone to allow it to operate under the name Vodafone Iceland. The move was the first time Vodafone had allowed a partner to operate under its name as a licensed brand franchise, reinforcing the UK group’s strategy to expand its brand footprint to countries where it does not hold an equity interest. The re-brand covered not only Og-Vodafone’s mobile operations but also its fixed line and internet services.