Monthly Archives: May 2008

France Telecom getting serious about TeliaSonera; Wants to raise 10 billion EUR for the acquisition

France Telecom has reportedly approached a series of financial institutions to arrange a 10 billion EUR loan that will enable it to acquire TeliaSonera. The French telecom giant, which is also known as the owner of the Orange mobile group, has been negotiating with the Nordic operator for quite some time now. However, it seems that the Swedish government, which owns 37% of TeliaSonera, is opposing the deal. National security reasons were cites as reasons, and at the moment they’re waiting for a report from the Swedish military.

According to the Financial Times, one solution to the security issues would be to spin-off TeliaSonera’s backbone network into a separate company. Still, it’s more likely Swedish government is using the security card to allow time for rival bids to be made.

As for the France Telecom’s financing deal, Financial Times suggests the loan could be a combination of loan and capital markets financing.

www.go-mobiles.com

Swedish military frowns on F Telecom’s TeliaSonera takeover plans

Sweden’s armed forces have expressed concerns about France Telecom’s low-key preparations for a possible takeover of Finnish-Swedish peer TeliaSonera, the Financial Times reported Friday.

The paper added that the Swedish military would submit a report on potential security liabilities of a takeover of TeliaSonera by 13 June.

Other sources of reticence for Sweden’s centre-right government have been competition issues and an eagerness to see rival bidders enter the fray.

In the run-up to Sweden’s 2006 general election, the four-party alliance that went on to win the vote said it would sell the state’s stake in TeliaSonera.

The Swedish and Finnish states own 37 and 13.2 per cent of TeliaSonera, respectively.

newsroom.finland.fi

Is France Telecom backing away from TeliaSonera deal?

Following weeks of speculation the CEO of France Telecom (FT) has stated that it is not in merger talks with TeliaSonera. The French stock market responded positively to this news boosting the telco’s share price by nearly two per cent. This comment by the CEO at FT’s AGM came only days after the Finnish Prime Minister said that it would not oppose selling off its holdings in a number of companies, including possibly TeliaSonera.

Neighbouring Sweden has already stated its intention to sell its 37.2 per cent holdings in the company. If the Finnish assets were added to that, a buyer would have the chance to gain control over a majority of the shares in TeliaSonera easily, making it an even more attractive target. Besides FT, the Russian Alfa Group and Norwegian Telenor have repeatedly been mentioned as potential buyers.

www.fiercewireless.com

TeliaSonera sued over false ad claims

Telecom operator 3 has filed a suit against TeliaSonera for what it argues are deceptive claims about the latter’s mobile broadband coverage.

“We believe that TeliaSonera’s marketing campaign is misleading. It combines technologies which are not related to broadband with technologies which are not mobile to give the consumer a false impression,” 3 CEO Peder Ramel said in a statement.

At issue are competing claims as to which company’s mobile broadband service has the best coverage. In a marketing campaign to promote its mobile broadband service, TeliaSonera claims to have “Sweden’s best coverage”.

However, 3 contends that a number of independent tests have shown that 3’s mobile broadband service actually provides the best coverage and performance.

On Thursday, 3 filed a suit with Sweden’s Supreme Market Court (Marknadsdomstolen), a specialized court that handles cases related to the questions related to competition, marketing practices, and other consumer-related legislation.

3 is owned by the Wallenberg-family holding company Investor, together the Hong Kong-based conglomerate Hutchison Whampoa.

www.thelocal.se

DĖL AB “LIETUVOS TELEKOMAS” VEIKSMŲ ATITIKTIES REKLAMOS ĮSTATYMO 5 STRAIPSNIO REIKALAVIMAMS

“Lietuvos telekomo” informacija apie “nemokamą” paslaugą – klaidinanti

Dėl neetiškos ir klaidinančios “Lietuvos telekomo” informacijos “Tele2” kreipėsi į Konkurencijos tarybą

Neturintiems ką veikti ar ieškantiems problemų – užsisakykite GALA TV

„Lietuvos telekomui“ už klaidinančią reklamą – 16,5 tūkst. litų bauda

Finland may be willing to sell off TeliaSonera stake

The Finnish state does not oppose selling off its holdings in a number of companies, including possibly TeliaSonera, which is considered a popular acquisition target, Swedish daily Dagens Nyheter reported on the weekend.

‘We have nothing against changing ownership structures, quite the opposite,’ Pekka Timonen, the head of the Ownership Steering Unit at Finnish Prime Minister

Matti Vanhanen’s office, said in an interview with the paper.

The Finnish state owns holdings in a long line of companies, and, with the exception of three groups, the government is entitled to sell off its shares as it sees fit without requesting authorisation from parliament, he explained.

‘The companies we have identified as strategically important are Neste Oil, (airline) Finnair and (electric company) Fortum, meaning we wish to maintain majority ownership in them,’ Timonen said.

The same is not true of the Finnish state’s 13.7-percent stake in Swedish-Finnish telecom operator TeliaSonera, which could possibly end up on the

bidding block, according to the Dagens Nyheter report.

Neighbouring Sweden has already stated its intention to sell its 37.2-percent holdings in the company.

If the Finnish assets were added to that, a buyer would have the chance to easily gain control over a majority of the shares in TeliaSonera, making it an even more attractive target for acquisitions than it already is.

France Telecom voiced ‘interest’ in TeliaSonera last month, while Russian Alfa Group and Norwegian Telenor have repeatedly been mentioned as potential buyers.

www.hemscott.com

France Telecom up against Swedish Army over TeliaSonera sale

While France Telecom has admitted its interest in acquiring TeliaSonera–with formal talks speculated to start with weeks, an unusual hitch to a successful outcome has arisen in the shape of the Swedish Army.

The head of communications, control and command for the Swedish Armed Forces, Per Nilsson, has confirmed the Army’s concern with regard to its use of the TeliaSonera network and the involvement of a foreign owner. “Any owner, domestic or foreign, of TeliaSonera must be thoroughly investigated from a security point of view. An owner that is not trustworthy could use its knowledge to damage Sweden,” said Nilsson.

Bankers close to the TeliaSonera deal said France Telecom had already expressed interest and believe other possible bidders could include Deutsche Telekom, Chinese telecoms operators and Chinese or Middle Eastern sovereign wealth funds. These latter groups are certain to cause worries within the armed forces and other government departments.

However, according to insiders, suggestions have been made that these security concerns could be alleviated by a thorough investigation of the buyer or by breaking up TeliaSonera in such a way that infrastructure under military usage does not fall into the private owner’s hands. Another potential option is building new infrastructure exclusively for military use.

www.fiercewireless.com

Azercell Telecom Head Appointed Chief Operating Officer of Fintur Holdings B.V.

Halim Ates, Head of Azercell Telecom Mobile Operator, has been appointed the Chief Operating Officer of Fintur Holdings B.V., a joint venture of TeliaSonera and Turkcell.

In his new office located in Istanbul, Turkey, Ates will be responsible for the overall commercial activities of the Fintur managed companies, driving synergies within the group. He will report to Mr. Tero Kivisaari, President of TeliaSonera Eurasia Business Area, Chairman of Board of Fintur Holdings and CEO of Fintur Holdings. At the same time,. Ates will continue in his role as CEO of Azercell Telecom LLC, the position he has held since April 2006.

In 2004 – 2006, Mr. Ates acted as CEO of Moldcell SA, another company controlled by Fintur Holdings. Prior to that, he worked in HR departments of Fintur (2002) and Turkcell (1998 – 2002).

“We have been working together with Halim Ates for a long time. He has always managed to succeed in all assignments. During his presidency over Azercell, the company has maintained leadership and the market share of over 70%”, says Tero Kivisaari. “I am happy to welcome Halim back to Istanbul. His knowledge of the region and strong leadership skills will certainly help us achieve our vision of becoming the leading Communication Services Provider in Eurasia.”

Fintur Holdings B.V. is a consolidated subsidiary of TeliaSonera AB in a joint venture with Turkcell Iletisim Hizmetleri AS. Fintur Holdings offers communication services in the Eurasian emerging markets through its subsidiaries in Azerbaijan (Azercell), Georgia (Geocell), Kazakhstan (K’Cell) and Moldova (Moldcell). Fintur is also responsible for operational management of TeliaSonera’s subsidiaries in Tajikistan (Indigo, Somocom) and Uzbekistan (Coscom).

Fintur group companies employ over 3,500 people across the region. The company’s consolidated revenue exceeded US$ 1.5 bln in 2007.

capital.trendaz.com

Army frowns on TeliaSonera sale plan

The Swedish military has issued a warning that the government’s planned sale of a stake in incumbent telco TeliaSonera to a strategic foreign buyer could compromise national security, according to the UK’s Financial Times (FT).

‘Any owner, domestic or foreign, of TeliaSonera must be thoroughly investigated from a security point of view. An owner that is not trustworthy could use its knowledge to damage Sweden,’ said Per Nilsson, head of the country’s armed forces command, control and communications division.

According to the military, a company with management control of the operator could access secret locations of military hardware and access internal communications channels. The government is awaiting a report from the armed forces, due on 13 June, addressing possible security implications of a sale.

According to the FT, the report is expected to suggest that security concerns can be alleviated by a thorough investigation of the buyer or by breaking up TeliaSonera in such a way that infrastructure under military usage does not fall into the private owner’s hands. Another potential option is building new infrastructure exclusively for military use.

TeleGeography’s GlobalComms database says that the Swedish government is the largest shareholder in TeliaSonera with a holding of 37.3%, whilst the Finnish government has 13.7%; the remainder is distributed.

www.telegeography.com

Lattelecom privatization deal to be completed by end of 2008

The Lattelecom privatization deal is to be completed by the end of the year. Representatives from the government and the Scandinavian telecommunications concern TeliaSonera, after a meeting yesterday, told members of the press that it was agreed that the privatization deal will move forward.

The president of TeliaSonera Mobility, Kenneth Karlberg, emphasized that the privatization deal is planned to be completed by the end of the year. Transport Minister Ainars Slesers (Latvia’s First Party/Latvia’s Way) also confirmed that this is the goal.

As was reported to LETA , ‘TeliaSonera’ has confirmed readiness to continue discussions on the government’s offered Lattelecom privatization model.

The government has confirmed the official letter with the Lattelecom privatization offer that was sent to TeliaSonera.

The Lattelecom privatization option as proposed by the government, foresees exchanging state-owned Latvijas Mobilais telefons (LMT) shares for TeliaSonera’s interest in Lattelecom.

The Latvian Privatization Agency in cooperation with Latvijas Valsts radio un televizijas centrs (Latvian State Radio and Television Center, LVRTC) will be assigned to prepare the regulations for selling 49% of Lattelecom shares and choosing the possible candidates. It will not be permitted to sell the 49% of Lattelecom shares further for a smaller price than that paid by LVRTC.

In case LVRTC would need additional assets for the implementation of the deal, the government could decide on allocating additional credit funding.

The chosen privatization framework previously was not supported by Cabinet ministers from For Fatherland and Freedom/LNNK.

The option approved by the government is to exchange the shares between LVRTC and TeliaSonera. The U.S. investment company Blackstone would also have the opportunity to participate in the privatization.

The agreement stipulates that LVRTC buys TeliaSonera’s 49% interest in Lattelecom and immediately sells it to an investor, most likely, to Blackstone.

The government disagrees with the possible break up of Lattelecom into two enterprises, which is one of the conditions stipulated for the share exchange option by TeliaSonera. “A break up of Lattelecom into two enterprises is still one of TeliaSonera’s main conditions for successful implementation of the deal. However, if Latvia’s government has other proposition, we are ready to consider them,” TeliaSonera’s press secretary Niklas Henrikson previously said.

LVRTC would act as a go-between in the deal, the deal would also meet TeliaSonera’s requirement that it would only sell the shares to the state of Latvia. The Lattelecom privatization deal also envisages that LVRTC would sell the state-owned LMT shares to TeliaSonera, and that TeliaSonera would also acquire LMT shares held by Lattelecom.

TeliaSonera presently holds a 49% stake in Lattelecom, and the state of Latvia 51%.

TeliaSonera also owns 49% of LMT shares, another 28% interest in LMT belongs to the state of Latvia (with a 23% interest held by LVRTC and 5% the Latvian Privatization Agency), and the remaining 23% of LMT shares belong to Lattelecom.

Transport Minister Ainars Slesers (LPP/LC) believes that if the deal is successful and the state manages to sell the 49% interest in Lattelecom, the state will receive a total of about LVL 270 million. The state would be paid at least LVL 30 million for its 5% interest in LMT, and at least LVL 240 million for the 49% of Lattelecom shares. As a result, the state would receive about LVL 270 million, and still hold a 51% interest in Lattelecom.

www.baltic-course.com