Norway's Telenor buys Bredbandsbolaget
The Local · 23 May 2005, 12:58
Published: 23 May 2005 12:58 GMT+02:00
"This is damned good - Telenor has strong financial muscles and great knowledge within telecoms," said Bredbandbolaget's managing director Peder Ramel to Svenska Dagbladet.
"This suits us - we want to be a challenger to Telia and take market share in the broadband market."
Bredbandsbolaget is currently the second largest provider of broadband services in Sweden with 335,000 customers, representing a 24% market share. The company was born at the end of the 1990s and founder Jonas Birgersson stands to pick up 30 million kronor from the deal.
Cybercity has 90,000 customers and 8% market share. It covers 70% of Denmark with its own DSL infrastructure.
The Swedish deal will give the Telenor board special satisfaction, after the company's attempt to merge with Sweden's Telia failed amidst name-calling and bitterness six years ago.
The plan was to join the two comapnies and then privatise them, to raise the cash to capitalise on the exploding telecoms industry. But fierce nationalism on both sides scuppered the deal, with the governments unable to agree on whether a Swede or a Norwegian would run the new business.
Sweden's industry minister at the time, Björn Rosengren, made an off-the-cuff remark in which he called Norway "the last of the Soviet states". The comment was broadcast throughout Norway and Rosengren was forced to apologise.
The final nail in the coffin for the deal was the disagreement over where the would-be $50 billion company should be based, with the Norwegians refusing to move east to Stockholm.
Telenor is betting that the number of broadband customers across the Nordic region will double to 9 million over the next five years and said it sees sees combined cost savings totalling 2.5 billion Norwegian kronor from the two acquisitions.
Both Bredbandsbolaget and Cybercity will continue to operate under their current brands.
The acquisitions are expected to be completed during June and are subject to approvals from the respective competition authorities, Telenor said.