France Telecom up against Swedish Army over TeliaSonera sale

While France Telecom has admitted its interest in acquiring TeliaSonera--with formal talks speculated to start with weeks, an unusual hitch to a successful outcome has arisen in the shape of the Swedish Army.

The head of communications, control and command for the Swedish Armed Forces, Per Nilsson, has confirmed the Army's concern with regard to its use of the TeliaSonera network and the involvement of a foreign owner. "Any owner, domestic or foreign, of TeliaSonera must be thoroughly investigated from a security point of view. An owner that is not trustworthy could use its knowledge to damage Sweden," said Nilsson.

Bankers close to the TeliaSonera deal said France Telecom had already expressed interest and believe other possible bidders could include Deutsche Telekom, Chinese telecoms operators and Chinese or Middle Eastern sovereign wealth funds. These latter groups are certain to cause worries within the armed forces and other government departments.

However, according to insiders, suggestions have been made that these security concerns could be alleviated by a thorough investigation of the buyer or by breaking up TeliaSonera in such a way that infrastructure under military usage does not fall into the private owner's hands. Another potential option is building new infrastructure exclusively for military use.

For more on this story:
- read The FT.com

Related stories:
What's behind FT's interest in TeliaSonera and Telenor? FT story 
France Telecom not talking to TeliaSonera. FT story