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Publish Date : 05-Dec-2014

On 3 December 2014 Telenor and TeliaSonera entered into an agreement to merge their Danish operations into a new joint venture where the parties will own 50 percent each. The new joint venture will create a robust mobile operator which is able to increase investments in networks to the benefit of our customers. The new company will have a combined mobile subscriber base of around 3.5 million. With a combined mobile subscriber market share of approximately 40%, revenues of more than DKK 9 billion and a significant synergy potential, the transaction creates a robust operator. The need for consolidation in the Danish telecom market has been apparent for a while as operators face continued pressure on revenues and profitability, limiting the room for investments and innovation. Telenor and TeliaSonera have since 2012 cooperated in Denmark through their jointly owned mobile network. The parties now agree that an independent and full-function joint venture is the strategically preferred route to capture synergies and to create value.

Efficiency gains: The merger of the two operations aims at achieving annual efficiency gains of above DKK 800 million, with full effect from 2019. The largest areas of synergies are envisaged for distribution, sales & marketing and call centers, general & administrative cost, network and IT. Integration costs are expected at around DKK 0.8 billion during 2015-2017. Benefits for customers: The combination of TeliaSonera and Telenor will also bring substantial benefits to customers in Denmark. It will provide a larger distribution network as well as improved network connectivity and performance. In addition, the merger will put the joint venture into a better position to invest in attractive and user-friendly services. Combining the fixed networks and services of the two companies will create an even better broadband provider for Danish consumers and businesses.

“Competition in Denmark is intense and we face continued pressure on revenue growth and profitability, making consolidation inevitable. By combining the assets and customer bases of Telenor and TeliaSonera in Denmark, the joint venture will become a robust operator. We will be able to offer our customers a high-quality network with outstanding connectivity and the best customer experience in Denmark,” says Kjell Morten Johnsen, EVP and Head of Telenor Region Europe. “We are making a necessary and natural move by forming a joint venture with Telenor building on the network partnership we already have with them. By joining forces we can secure investments in Denmark, to the benefit not only of our customers but to the Danish society as a whole,” said Robert Andersson, EVP and Head of Region Europe in TeliaSonera.

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