Finnish Telecom Sonera Denies It Seeks a Buyer
HELSINKI -- Finnish telecom operator Sonera on Friday rebuffed reports that it would put itself up for auction at a price of at least $35 billion.
"This is exceptionally groundless, it is total rubbish," said Sonera spokesman Jari Jaakkola. "This story should not be taken seriously."
The Financial Times on Friday reported that Sonera would put itself up for sale at a price of at least $35 billion. It said Sonera and advisers at Goldman Sachs and Lehman Brothers would collect expressions of interest next week from potential buyers. Goldman was the lead international adviser for the 18 percent tranche of Sonera sold last autumn.
Dutch KPN Telecom also denied the report that it had expressed an interest in buying Sonera and said it could not say whether it might bid if the Finnish telecoms operator came up for sale.
Sonera is also active on the local market. A subsidiary of Sonera and Central Telegraph, Sonic Duo, received Moscow's third GSM license in May.
Sonera's chief executive-in-waiting Kaj-Erik Relander said last month he expected the company to have begun serious merger talks by the end of the year, but management has stressed there is no "for sale" sign on the company's roof.
Doubts over the future independence of Europe's smaller telecoms groups have mounted since diminutive Dutch group KPN Telecom forged a closer alliance with two of Asia's most powerful companies f Hong Kong's Hutchison Whampoa and Japan's NTT DoCoMo f earlier this month.
Analysts said Finland's Sonera, Sweden's Telia, TeleDanmark, Swisscom and even Spain's Telefonica and Italy's Telecom Italia Mobile are under growing pressure to seek strength in numbers.
"This is no longer a game for a single country operator. They have to be part of a bigger grouping," said one telecoms analyst. "But if some of these smaller companies feel they need to get into an alliance, there will suddenly be no premium to take them over f which is a bit worrying."
The Finnish group has won market respect for its technology and has already held exploratory talks with Orange, the British mobile phone company now owned by France Telecom.
But consolidation in the telecoms industry has long appeared inevitable as companies seek scale, scope and pooled resources ahead of costly, high-speed, next-generation Universal Mobile Telecommunications System services.
Only a handful of UMTS licenses, which bring with them hopes of fat new revenue streams from speedy Internet and video services over mobile devices, are up for grabs across Europe. Sonera also has licenses in Finland and Spain, is bidding in Germany and has expressed interest in Italy and Switzerland.
And the high cost of rolling out broadband UMTS mobile services, on which analysts say the future success of Europe's telecoms groups hinges, means only the big can survive.
Analysts believe only Vodafone, Deutsche Telekom, France Telecom/Orange, Hutch/KPN DoCoMo and possibly British Telecommunications PLC will have the financial muscle to build a pan-European UMTS network.