Telecoms watchdog to propose TeliaSonera’s network separation

Fitch Ratings said it expects Swedish telecoms regulator, PTS, to propose a functional separation of TeliaSonera's fixed-line network, adding such measures will promote open access and fair competition within the European telecoms market.

“Although we expect this development to increase competition and drag down TeliaSonera’s marketshare and revenues, the extent of the impact will be largely determined by the cost of capital set for its products by the regulator,” a statement from the ratings firm said.

The Swedish telecoms watchdog is expected to propose a functional separation of TeliaSonera’s wholesale activities from its retail operations later this week, so that access to TeliaSonera’s network will be provided on a non-discriminatory basis to all service providers, including the company’s own retail arm.

The proposal comes in response to the government’s request that PTS look at ways to improve broadband penetration in the country, which currently stands at 51 percent of homes, to match that of its neighbours Denmark at 60 percent

and Finland at 56 percent.

Fitch noted that considering Sweden’s infrastructure, the introduction of the regulated bit-stream access product combined with DSL, has significant potential to impact TeliaSonera’s operating performance.


‘Rotten’ business claims at Nordic TeliaSonera

Swedish-Finnish telecom operator TeliaSonera has been accused of “rotten” business dealings in Azerbaijan, following a separate bribery scandal in Uzbekistan.

'Rotten’ business claims at Nordic TeliaSonera
A TeliaSonera conference in Stockholm last year. Photo: TT

Folksam, which is one of the largest insurance companies in Sweden, has accused the firm of “systematic cheating”, after it emerged that TeliaSonera’s subsidiary in Azerbaijan had ties with the family of Ilham Aliyev, the Arab nation’s leader.

It has been claimed that the dictator’s daughters were shareholders of TeliaSonera's subsidiary Azertel, via a connected company based in Panama.

“It is distressing that in a large Swedish company…people thought that cheating would pay off in the long run,” Carina Lundberg Markow, one of Folksam’s managers told the TT news agency on Wednesday.

She criticized TeliaSonera for failing to act “in an honest and open way” when entering new markets.

“Instead, they choose to pay for success,” she added.

TeliaSonera is one of the biggest telecom operators in the Nordic and Baltic countries and also operates in several emerging markets in Eurasia including Russia and Turkey, as well as Spain. The Swedish state owns 37.3 percent of the company.

Swedish prosecutor Gunnar Stetler is already investigating claims of unethical business practices in Uzbekistan and told TT he had also been given new information concerning potential bribery in Azerbaijan.

The company has voluntarily cooperated with the investigation, handing over what Stetler describes as “extensive information” about “the terms and conditions in Eurasian countries”.

Stetler said he was unable to discuss how he had responded to the information. But calls are growing for TeliaSonera to release a public report about its business dealings.

“Now it is extremely important to create transparency,” said Lundberg Markow.

“This shows the importance of having a set of values when doing business in complex markets or countries,” she added.

TeliaSonera and Norwegian rival Telenor recently merged their operations in Denmark, while the telecoms giant last year purchased rival Tele2's Norwegian division for 5.1 kronor.