TeliaSonera stocks up on fibre following company revamp

TeliaSonera has been on a roll this week, first announcing a new executive management team and introducing a new operating model following a recent ethics review, and then adding to its fibre assets by buying a group of open fibre network companies in Sweden.

As part of its plan to invest €555 million ($764 million) annually on the expansion of its mobile and fixed infrastructure throughout Sweden by 2015, TeliaSonera said it has spent €52.5 million on buying three companies currently owned by MTG Broadcasting AB and Quadracom AB, with net sales of around €36.6 million pro forma in 2012. The companies are Zitius, which has 160,000 connected households, the network operator Quadracom Networks and the service provider Riksnet.

"We are very happy to be able to acquire a group of companies that have a history of being pioneers in open networks, and we aim to use this knowledge and expertise when we continue to invest in open, competition-neutral networks in the future," Malin Frenning, president of broadband services at TeliaSonera, said in a statement. "We welcome our new customers and look forward to serving them with Telia's entire portfolio."

The acquisition comes as TeliaSonera starts the process of introducing a new operating model for the company under the leadership of a new executive management. In late November, the company terminated the employment contracts of four senior employees, including CFO Per-Arne Blomquist, following a wider review conducted by law firm Norton Rose Fulbright into business practices at TeliaSonera's Eurasian operations.

Earlier this week, the company said a new group executive management team comprising 12 members would be responsible for implementing a new operating model that seeks to increase customer focus and improve local accountability through clearer governance. The team is made up of both existing and new members, and will see Erik Hallberg, currently head of TeliaSonera International Carrier, replace Veysel Aral as the president of the troubled Eurasian business.

"The countries will be the leading dimension in this new operating model, which is where we interact with the customers," TeliaSonera CEO Johan Dennelind said in a statement. "We remove the business area layer from the existing organisation. Instead we strengthen the local operations and the mandate for group functions to drive strategic questions and improve governance. We believe this model will enable us to offer our customers a better service at the same time as it clarifies accountability for our performance."

The Swedish-based company appointed Norton Rose in April to carry out a review of the transactions and agreements made over the past few years by TeliaSonera and partners in Eurasia. While the review is still ongoing, the company said information and conclusions to date indicate that the processes for conducting some transactions have not been in line with sound business practices.

Former TeliaSonera CEO Lars Nyberg stepped down in February after a review by lawyers censured the company over corruption allegations related to the operator's purchase of a phone licence in Uzbekistan. Swedish prosecutors last year started an investigation into the licence purchase after bribery allegations.

For more:
- see this TeliaSonera release
- see this second TeliaSonera release
- see this third TeliaSonera release
- see this Reuters article

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