Swedish carrier TeliaSonera and Telenor of Norway agreed Wednesday to combine their respective wireless operations in Denmark into a 50-50 joint venture that the companies hope will compete more effectively against national market leader TDC.
The transaction, which requires European Commission approval, represents the latest example of the consolidation wave that continues to wash over the European telecommunications sector. For TeliaSonera, Wednesday’s deal comes as the company continues to pursue its pending US$687 million acquisition of the Norwegian assets of Tele2 in the wake of opposition from Norwegian competition authorities. In yet another major deal that impacts the Scandinavian region, TDC agreed last month to acquire Norwegian cable firm Get AS for 13.8 billion kroner (US$2.28 billion).
Since 2012, Telenor and TeliaSonera have offered mobile service to Danish customers through a jointly-owned network, and observers indicate that the companies formed the joint venture in the interest of capturing synergies and creating greater value. Upon completion, the joint venture is expected to command 3.5 million wireless subscribers and a 40% share of the Danish market that would rival TDC. Emphasizing that “competition in Denmark is intense, and we face continued pressure on revenue growth and profitability,” Kjell-Morten Johnsen, the chief of Telenor’s European operations, described the merger of his company’s Danish operations with those of TeliaSonera as “inevitable.”