Norwegian Competition Authority could block TeliaSonera's purchase of Tele2 Norway

2 Dec 2014

Norway’s competition watchdog could block TeliaSonera’s proposed acquisition of Tele2 Norway, Reuters reports, with concerns that the deal could lead to higher prices and lower quality of services (QoS) by leaving just two well-established mobile network operators in the market. Commenting on the matter, the Norwegian Competition Authority (NCA) noted: ‘TeliaSonera has proposed measures to the Competition Authority to remedy competition concerns … We have considered these measures and concluded that they are not sufficient’; neither TeliaSonera nor Tele2 have confirmed what remedies had been pledged to facilitate the deal. However, while the NCA’s initial examination of the planned purchase is less than favourable, it does not represent a final decision, and interested parties have until 22 December 2014 to submit comments to the watchdog ahead of a final ruling due by 15 January 2015.

Both TeliaSonera and Tele2 have, meanwhile, confirmed they plan to evaluate the situation and continue a dialogue with the authority, though Tele2 Group chief executive Mats Granryd was cited as saying his company was ‘concerned’ about the notice from the NCA, stating: ‘This will potentially jeopardise the creation of a dynamic mobile market in Norway with two strong competitors to the incumbent.’

As previously reported by CommsUpdate, in July 2014 Swedish telecoms group Tele2 revealed that it had agreed to sell its Norwegian unit to rival TeliaSonera for an enterprise value of SEK5.1 billion (USD728 million), equivalent to a cash value of SEK5.3 billion. In announcing the development, Tele2 claimed that the divestment ‘delivers an attractive value for [it] and will generate a capital gain of approximately SEK2 billion upon expected closing’, with Mr Granryd adding: ‘The competitive constraints we faced without resources on the multiband frequency required us to evaluate different options for our Norwegian businesses. Whilst we have not been able to complete our originally desired strategy, the proposed deal is good for our customers, shareholders and for Tele2 as a whole.’

Norway, Tele2, Tele2 Norge (part of Telia Norge), Telia Company, Telia Norge