TeliaSonera to pull out of Eurasia region

Swedish telco TeliaSonera has announced an orderly retreat from all its operations in the Eurasian region in order to refocus on Europe.

TeliaSonera has been trying to make a success of its Eurasian (Nepal, Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova and Tajikistan) interests for a couple of years, but it looks like doing business in that region is far from straight forward. Uzbekistan has been especially troublesome for the company, with corruption allegations leading to the resignation of the CEO and a bunch of other senior execs.

Last week TeliaSonera was forced to abandon the proposed merger of its Danish operations with those of Telenor due to unresolvable objections from the European Commission, which will have led to a rethink about its strategy in Denmark and perhaps the rest of Europe too.

“Thanks to two years of hard work to improve the Eurasian operations, not least from a corporate governance and sustainability perspective, we now have better and more well-managed companies which we believe others can successfully develop further,” said TeliaSonera’s President and CEO Johan Dennelind.

“We realise that this will be a complex task that will take time. We are conducting this process market by market as each country and operation has its unique situation, but the ambition is to eventually leave the entire region.”

“The board of directors has thoroughly examined what is best for our shareholders, operations, employees and customers,” said TeliaSonera Chair of the Board, Marie Ehrling. “We have initiated a process to reduce TeliaSonera’s presence in Region Eurasia in order to effectively execute on our strategy. It is very positive that TeliaSonera’s focused work to improve sustainability has enabled the next step in the reshaping of TeliaSonera,”

So TeliaSonera is saying that it expects to dispose of each country operation individually and is in no great hurry to do so. Regardless whether this is in fact the case, it’s sensible to send out this message as any indication of a fire sale would devalue the assets in question, reducing the funds available for reinvestment in its European operations.