Network sharing to trim SEK4 billion from TeliaSonera/Tele2 bill

19 Sep 2003

An agreement signed by TeliaSonera [Nasdaq: TLSN] and Tele2 [Nasdaq: TLTOB] in Sweden to jointly roll out advanced third-generation (3G) mobile services looks likely to cost the pair around SEK4 billion less than originally expected. The two are reported to have renegotiated terms with their banks to borrow SEK7 billion (USD877 million) instead of the SEK11 billion agreed in 2001. A spokesperson for TeliaSonera said that the cut in spending ‘has been achieved by a reduction in infrastructure costs through the utilisation of new technology’, and increased expertise in how to more efficiently plan the network. In addition, the company plans not to cover the whole of the population by the end of the year as required by the terms of its licence award. The country’s 3G licensees have all requested permission to delay rollout and a new telecoms law makes it possible for them to extend their deadlines by up to 18 months without incurring financial penalties. Although the cost saving is good news for the operators, it is less welcome to Ericsson which has been contracted to supply the network hardware.

Sweden,

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