Tele2 secures Norwegian future with Telenor roaming deal

Tele2 ended speculation over its future in Norway by signing a national roaming agreement with rival Telenor covering LTE, 3G and 2G technologies.

The roaming deal will come into effect on July 1, and offer customers of local Tele2 brands--Tele2 Norway, One Call, My Call, and Network Norway--access to 2G, 3G, and LTE services in the market. The agreement secures Tele2's business in Norway after the Sweden-based operator lost a bid to acquire an LTE licence and additional 3G spectrum during an auction in December.

Tele2 Norway CEO, Arild Hustad, said the agreement "will help to ensure that all our customers receive 4G and the best services, whether they are on our network or on Telenor's network."

Berit Svendsen, CEO of Telenor, noted the agreement will benefit all users in the country. "The development of a high-capacity nationwide mobile network in Norway requires huge financial resources. This agreement with Tele2 ensures efficient use of resources, particularly in low-density geographic regions," he said.

Speculation about Tele2's future plans for Norway has been rife since TeliaSonera, Telenor, and new entrant Telco Data bid a total of €212 million ($293 million) for 4G and additional 3G spectrum in the December auction.

A strategic partnership was one option that Tele2 CEO Mats Granryd said was on the table when he revealed in March that the company had hired investment bank ABG Sundal Collier Holding to advise on its future options for its Norwegian business.

The other options included attempting to maintain organic business growth on Tele2's existing 2G and 3G networks in Norway, or exiting the market. A Berenberg Bank analyst said in April the operator could net SEK3 billion (€332 million/$460 million) by selling the business to rival TeliaSonera.

Tele2 Norway added 14,000 subscribers in the opening quarter of 2014, and the operator said its One Call business became the country's third-largest mobile operator during the period, with a subscriber base of 423,000.

Granryd noted that Tele2's businesses in the Netherlands and Kazakhstan contributed "strongly to overall growth" during the first quarter, while its domestic unit "stands as the role model" when it comes to creating a profitable and data-centric business model.

Tele2 Group's earnings before interest, depreciation and amortisation (EBITDA) hit SEK1.3 billion in the opening quarter, compared to SEK1.4 billion in the same period of 2013.

For more:
- see Telenor's roaming agreement statement
- see Tele2's first quarter 2014 results
- compare Tele2's first quarter 2013 earnings

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