Tele2 bids for Benelux expansion

Just three days afer acquiring Spain's Comunitel for 257 million euros, the Swedish telecom operator Tele2 has reached into its deep pockets again.

This time the target is Dutch Versatel Telecom International and Tele2 announced on Monday that it had bid 1.34 billion euros (1.62 billion dollars) in a bid to expand operations across the Benelux countries.

By combining its existing operations in The Netherlands and Belgium with Versatel’s business, Tele2 said it hoped to pull in pro forma revenues of 800 million euros and EBIDTA (earnings before interest, taxes, depreciation, and amortization) of 112 million euros in that region alone.

That dwarfs the pro forma revenues and EBIDTA of Comunitel which, in 2004, reached 174 million euros and 11 million euros respectively. Nevertheless, the Spanish broadband population penetration is forecast to more than triple over the next few years, from 8% currently to 25% in 2009.

Last week Tele2 pointed to how the Spanish deal would lower its costs in that market; according to a press statement, the same rationale is behind the bid for Versatel.

The Swedish firm said it was especially interested in migrating its own customers to Versatel’s fibre-optic network, which is expected to lead to cost savings, higher margins and a more profitable product offering.

“Tele2 is pursuing its strategy of backward integration into infrastructure in markets where it has a critical mass of consumers. Owning local access infrastructure is increasingly important,” the company said in a statement.

The Swedish operator said it planned to pay 2.20 euros per Versatel share, which represents a 14 percent premium over the stock’s closing price of 1.93 euros on Friday.

Tele2 added that it had agreed to sell on Versatel’s German operations to venture capital group Apax for 565 million euros after completing the bid for the Dutch company.

The German operations accounted for about 47 percent of Versatel’s EBITDA in the first quarter of this year.

“I am very excited by the opportunity this acquisition gives us. The combination of our existing business and that of Versatel in the Benelux region will enable us to continue to provide our customers with the best prices along with improved product offers,” Tele2 chief executive Lars-Johan Jarnheimer said in a statement.

Versatel’s supervisory and management boards have, according to Tele2, unanimously come out in support of the offer, and an Offer Memorandum is expected to be published next September.

“I have been a big believer that consolidation is an important element of the alternative carrier strategy in today’s telecommunication markets and we therefore believe the merger of our operations with Tele2 and the sale to Apax is a great opportunity for Versatel and is in the best interest of the shareholders,” Versatel chief executive Raj Raithatha said in a statement.

The takeover offer will go through if 85 percent of Versatel shareholders and 95 percent of the noteholders accept it. It will also depend on regulatory approvals.

If the bid is successful, Versatel shares will be delisted.

The Local/AFP


Tele2 and Comviq mobile blackout cuts off Swedish users abroad

If you've been having trouble getting your mobile to work outside Sweden since Friday, this may be the reason why.

Tele2 and Comviq mobile blackout cuts off Swedish users abroad
Photo: TT

Swedish prepaid mobile phone brand Comviq and its European holding company Tele2 are experiencing serious problems with their overseas networks. 

The unexpected glitch means Swedish customers abroad are experiencing difficulties when placing and receiving calls, texting and browsing the internet, a situation that’s gone on for more than 24 hours.

“It's deeply regrettable,” admits Tele2 media spokesperson Johan von Heijne.

“We urge those who need to get in touch with people to look for places with Wifi instead.”

Tele2 and Comviq’s networks continued to experience problems on Saturday with no apparent solution in sight.

“We have no new information yet,” von Heijne is quoted as saying by Swedish news agency TT.


To make matters worse, Tele2's website is down.

“This is an unfortunate coincidence. But we’re reaching out to our customers through our other channels, ” explained von Heijne.

Tele2 started as a telecommunications company in Sweden in 1993 and currently operates in Sweden, Croatia, Estonia, Kazakhstan, Latvia, Lithuania, the Netherlands, Russia and Germany.

Comviq merged with Tele2 in 1997, but the name Comviq was retained as a brand, together with Tele2's own brand Tele2 Mobile.