Thursday, 2 October 2008

TeliaSonera buys majority stake in two Asian mobile operators

Telecommunications Online

by Ek Heng (Telecommunications' Asia-Pac Correspondent)
Wed. October 1, 2008

Nordic telecommunications group TeliaSonera is taking controlling stakes in two Asian mobile operators in Nepal and Cambodia. The Stockholm-based telco group is investing US$488 million altogether in Spice Nepal Private Limited in Nepal and Applifone Co in Cambodia.

Through the purchase of 51 percent stake in TeliaSonera Asia Holding from Kazakhstan’s Visor Group, the Nordic telco group gets 80 percent stake in the Nepalese operator with 100 percent ownership of Cambodia’s Applifone. Visor Group retains ownership of 49 percent in TeliaSonera Asia Holding and the transaction is expected to be completed on October 1.

As Nepal’s second largest mobile operator, Spice Nepal serves 1.6 million subscribers or about 41 percent of the market share. Applifone is a start-up mobile operator in Cambodia with more than 97,000 subscribers or about 3 percent market share.

The multi-million dollar investment is in line with earlier announcement by TeliaSonera that it was looking to emerging markets in Asia for growth. The group has set its sights on markets of between 10 and 20 million population with less than 20 percent cellular penetration. Nepal and Cambodia have a combined population of 43 million, low mobile penetration and are growing economies.

Following disclosure of second quarter financial results in July this year, the group declared it was seeking job cuts of 2,900 in Sweden and Finland over an 18-month period aimed at achieving savings of US$830 million. The release of that quarter’s results showed that growth was due to foreign businesses including mobile operations in Russia, Turkey and the Eurasia division. More than half of its operating income is derived from Asia and Eastern Europe. The telco group was formed from the merger of Sweden’s Telia and Finland’s Sonera in 2002.

In an earlier development in September, a wholly-owned subsidiary of the group, TeliaSonera International Carrier announced it built a second point of presence in Singapore in an expansion of its global backbone into Asia. It chose Singapore because of its status as the Internet hub of Southeast Asia. The carrier owns and manages over 43,000 kilometers of fiber optic cable and has more than 100 points of presence across Europe, the U.S. and Asia.

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