TeliaSonera snaps up Danish MVNO

Scandinavian giant TeliaSonera, on Thursday announced it is to buy the Danish MVNO, Debitel Denmark in a deal that could be worth up to Eur140m (£92m).

In a statement, Teliasonera said it had signed a a share purchase agreement to acquire 100 percent of debitel which has around 300,000 mobile subscriptions. The acquisition includes debitel’s 50 percent share in DLG-debitel I/S, operating under the brand DLG Tele.

TeliaSonera is focused on tightening its grip on domestic markets and has already grown to be the largest operator in Sweden and Finland. “This transaction strengthens our position on the Danish mobile market and emphasises our ability to progress successfully with our strategy to enhance growth in our home markets” said Anders Igel, president and CEO of TeliaSonera.

Ovum analyst Raymond Yu, says the acquisition, coupled with its recent distribution deal with Merlin – a Danish electronics chain – “shows that TeliaSonera continues to be committed to the Danish mobile market despite the difficult market conditions”. Yu adds: “Teliasonera is working hard to increase profitability: in Q3 2006 its year-on year revenues grew by 5 per cent and its EBITDA margin increased by 6 percentage points. New initiatives like its HomeFree FMC solution will help it to differentiate from the competition.

“This acquisition will further strengthen its market position in Denmark and will move it ever closer to its rival Sonofon – owned by Telenor. However, both still remain a long distance behind the incumbent TDC in terms of subscribers.”

Currently TeliaSonera is the second largest player in the Danish market, behind TDC. Following the deal, Debitel will continue to operate as a service provider under a separate brand on the Danish market and there will be no major changes in the operations of the company, TeliaSonera said in its statement.