NPT turns down Tele2/Network Norway request for higher MTRs

28 Jun 2012

The Norwegian Post & Telecoms Regulatory Authority (NPT) has revealed that it has rejected a request made by Tele2 and Network Norway, the latter of which is now majority owned by Tele2, to maintain higher mobile termination rates (MTRs). The regulator had been tasked with reaching a decision on the matter by the Ministry of Transport & Communications (MoTC) after the two operators lodged a request in May 2011 calling for a longer period for asymmetric rates. The duo at that date claimed that the extended timeframe for the retention of the higher rate was ultimately justified by the fact that Network Norway is now seeking to roll out a network covering 98% of the Norwegian population, instead of the 75% originally planned. As such, it was argued that the ministry’s assumptions which formed the basis of its decision on termination rates in 2011 were outdated. In making their case, Tele2 and Network Norway had argued that the construction of a nationwide network is a necessary step to ensure that the new infrastructure is competitive with those controlled by the country’s two other network operators, Telenor and NetCom.

In revealing its decision, the NPT noted, however, that it had identified factors which suggested Tele 2 and Network Norway would have other incentives to expand their networks beyond the 75% coverage level other than additional financing via an extension period for higher MTRs. As such, the regulator said, there was no reason to grant the duo’s request; the two companies now have three weeks to decide whether they will appeal the decision.

As noted in TeleGeography’s GlobalComms Database, in July 2011 Sweden’s Tele2 announced that it had reached an agreement to acquire the stakes of Network Norway’s three largest shareholders – Orkla ASA, Hafslund Venture II and Katalysator Telekom. Following suggestions that it would look to make an offer to all remaining shareholders of Network Norway, on 3 October 2011 the Swedish company confirmed that it had acquired a 99.85% stake in Network Norway for a total of SEK 1.724 million (USD243 million).