Tele2 gains scale with Network Norway purchase

An increasingly tough Norwegian telecoms market has prompted Tele2 to look for greater scale by acquiring the mobile operator Network Norway.

Swedish-based Tele2, which formed a 50:50 joint venture with Network Norway in 2007 to deploy Norway's third GSM network, said it will pay around $140 million  (€97.7 million) in cash and will then launch an offer for Network Norway's remaining sharees. The deal values Network Norway at $265 million (€186.7 million) on a cash and debt-free basis.

Thomas Ekman, market area director Nordic at Tele2, told Reuters: "The acquisition of Network Norway will make Tele2 the clear No. 3 mobile operator in the Norwegian telecom market with more than one million customers and gives us the operational leverage that we need to complete Norway's third mobile network."

Tele2, which has been struggling to compete in Norway, claims that the country's telecoms regulator has been aggressively pushing down mobile tariffs. The impact of these cuts have seen Tele2's sales fall 8 per cent in the second quarter, while core profits, at $3.75 million, fell by 66 per cent.

The acquisition of Network Norway, which has nearly 500,000 customers, will still leave Tele2 trailing behind Telenor, which is Norway's largest mobile operator, and Netcom, owned by Sweden's TeliaSonera.

For more:
- see this Reuters article
- see this Telegeography article

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