Telenor of Norway has completed its acquisition of Vodafone Sweden after agreeing to buy the Swedish mobile operations of Vodafone Group for EUR1.04 billion (USD1.24 billion) on 31 October 2005. Telenor paid Vodafone around EUR970 million in cash, with the remainder covered by assumed debt. Vodafone will record a charge of around GBP500 million (USD885 million) from the sale and has negotiated a partner agreement with Telenor to allow it continued use of the Vodafone brand and services in Sweden for an unspecified time.
Vodafone Sweden is the country’s third largest cellco by subscribers with 1.545 million users at the end of September 2005 and a market share of close to 16%. It operates GSM and W-CDMA networks, the latter shared with rival Hi3G. Vodafone launched a datacard-only 3G service at the end of February 2004 and 3G handsets five months later. It has W-CDMA coverage of between 80% and 85% of the population, including the entire Stockholm underground system, but in November it was leaked that Vodafone was planning to stop its 3G rollout as a result of the high costs involved. The cellco’s profit margin is expected to fall to 14% in its current fiscal year ending March 2006, from 43% in 2003. It is not yet known whether Telenor intends to restart the cellco’s 3G network investment.