Swedes hunger for Orange?

23 Dec 2003

According to Swedish newspaper Dagens Industri, TeliaSonera is in negotiation with Orange to acquire its Swedish 3G licence. The broadsheet quoted unnamed sources as saying negotiations were currently taking place, though neither telco has confirmed this. The acquisition would give TeliaSonera access to frequencies previously denied it, as a result of its failure to win a concession in the beauty contest of December 2000. At that date the Swedish telecoms regulator, the PTS, awarded four licences, having judged applications according to specific criteria that included network coverage plans and speed of rollout. The SEK100,000 (USD9,660) licences went to TeliaSonera’s 2G rivals Tele2 and Vodafone as well as to newcomers Hi3G Access and the Orange Sverige consortium, made up of Orange, Skanska, NTL and Schibsted.

While TeliaSonera was left with the stigma of being the only European incumbent not to have secured a 3G licence in its domestic market, all was not well with one of the winners. In summer 2002 Orange announced it would have difficulties in meeting the rollout requirements laid down by the licence and applied to the PTS for an extra three years (until December 2006) to meet them. It also requested that it be allowed to provide a reduced coverage of 8.3 million inhabitants, instead of the 8.86 million specified, a 6% cut but one which would have meant not having to provide coverage to great swathes of rural Sweden. In September 2002, however, the PTS concluded that there was no justification for granting less stringent licence conditions and denied the request. The matter came to a head in December 2002 when Orange announced that it was withdrawing from the Swedish market altogether, claiming that the coverage requirements were too onerous. The decision to opt out landed Orange with a bill for EUR109 million, its portion of the cost of building a shared 3G network – known as Svenska Natet – with Hutchison and Vodafone.

PriMetrica’s GlobalComms

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