Telia ‘should be broken up’

Swedish-Finnish telecom operator Telia Sonera could be forced to separate, putting its Swedish fixed-line network in a separate unit, if a new proposal is incorporated into law. The proposal was put forward in a document from regulator PTS drawn up on a commission from the government.

Under the proposal Telia Sonera would be forced to split up the production and sale of certain wholesale services from its other activities. The two parts of the company would have to be separated by ‘watertight barriers’, PTS said.

The model put forward for Telia Sonera is very similar to the British model, in which former monopoly phone provider BT has a semi-detached unit to handle wholesale activities.

Marianne Treschow, head of PTS, criticized the current system whereby Telia Sonera negotiates with other operators to give them access to the network. She said that the system had led to repeated conflict between the companies, with a long line of court cases resulting.

“And still the relationship between Telia Sonera and the other operators is not working,” she said.

“And when the buyer-seller relationship is now working, it damages Sweden as an IT nation, and leads to us falling behind our neighbours.”

The proposal will now be handed to the government, and will be put out for consultation during the summer. PTS expects the measures to be passed by January 1st 2008, but for them to take some time to be fully implemented.


‘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.