Telia, Telenor to share phone network in Denmark

STOCKHOLM, DENMARK: TeliaSonera and rival Telenor will share their mobile phone networks in Denmark as they look to cut costs and gain a competitive edge in a tough market.

TeliaSonera gave no figures for how much it expected to save from the deal, which covers second, third and fourth-generation mobile infrastructure. It said on Tuesday that sharing networks would cut investment costs and have a significant effect on results.

Telenor also gave no financial details.

TeliaSonera, which pulled out of bidding for Poland's number two mobile operator Polkomtel last week, in a separate statement repeated its outlook for an improved core operating profit margin this year versus last year but only slight sales growth.

"Our fixed networks remain a key strategic asset, and in order to meet our customers' demand for triple play and capacity-hungry applications, we will invest more than SEK 8 billion in fiber until 2014," chief executive Lars Nyberg said.

"To maximize shareholder value, TeliaSonera will continue to have a disciplined approach to M&A, and we will selectively look for new opportunities within or neighboring our current footprint."

Giving its first-quarter results in April, Telia cut its revenue growth forecasts slightly due to a slowdown in its Nordic home markets and the weak economy in Spain, where it operates under the Yoigo brand.

Sharing

Network sharing has become a popular tool among telecoms operators as they look to cut costs and focus on value-added services rather than infrastructure. Some players, however, see the network as a key competitive asset.

Telenor already shares a 4G network in Sweden with Tele2, while Telia shares a 3G network with Tele2 in Sweden.

Telia, Denmark's third-biggest mobile firm, said its partnership with Telenor would cover antennas, towers and transmission equipment, but not involve core networks, enabling them to continue to offer different services to mobile users.

Telia, which also operates under the Call Me and DLG Tele brands in Denmark, said in the first quarter that the fragmented Danish market was challenging, with fierce competition from smaller players. Sales in Denmark in local currency fell 7 percent, partly due to regulators' cuts in interconnect fees.

Telenor, which has a 28 percent mobile market share in Denmark, said in the first quarter it was facing price pressure in both Denmark and Norway. Telia and Telenor said they would set up a common infrastructure company to operate their joint 2G, 3G and 4G networks