Second largest mobile operator in Denmark formed - TeliaSonera closes deal and acquires Orange Denmark

Press Release October 11, 2004 Second largest mobile operator in Denmark formed - TeliaSonera closes deal and acquires Orange Denmark TeliaSonera, the leading telecommunications group in the Nordic-Baltic region, today announced that it had closed the deal with France Telecom to acquire Orange Denmark. The combined Telia Mobile and Orange, to be called Telia Mobile, is a powerful alternative for Danish telecom customers. With approximately 1.1 million subscribers, Telia Mobile is now the leading contender for the No 1 position on the Danish market. It already has half of total SMS traffic and more than one-third of the all MMS traffic. "The transaction confirms TeliaSonera's long-term commitment to the Danish market and it strengthens our Nordic footprint in a way that will increase our overall competitiveness in pan-Nordic offerings", says Anders Igel, President and CEO of TeliaSonera. "Profiting from the resources of TeliaSonera, we can develop unmatched new attractive and innovative services for our growing residential and business market in Denmark," says Kenneth Karlberg, President, TeliaSonera Norway, Denmark and the Baltic countries. The acquisition was announced 8 July 2004 and following approval by the European Commission on 24 September, the parties have finalized the deal. Upon closing, TeliaSonera has paid EUR 605.8 million to acquire Orange A/S. Jesper Brøckner has been appointed President of the new Telia Mobile. He will head the process of integrating operations and building a common organizational structure. A new management team for the combined company has also been appointed. Roar Seeger has been appointed as Head of Sales & Marketing, Clint Goad as Head of Technology, Svend Thomsen as Director of Finance and Allan Groth as Director of Human Resources. The company will establish headquarters in Copenhagen at Holmbladsgade 139, where Orange now is located. "With experience from the recent successful integration of TeliaSonera's Swedish and Finnish operations, we expect swift progress in forming one stronger force on the Danish telecommunications market," Kenneth Karlberg states. "The new Telia Mobile offers customers attractive services, combining the best skills and resources of two major companies." Initially no changes will be made in the existing customer relationships. Over the coming months, Telia Mobile gradually implement plans on common branding, customer migration and the new services portfolio. The new Telia Mobile will utilize the present network resources, including infrastructure, of both companies in establishing its radio access network. An upgraded network is needed to provide both capacity and coverage for joint operations and to provide customers with the best network services in Denmark. Ericsson has been selected as technical supplier. Telia Mobile will also fulfil the UMTS license requirements. As decided by the Danish regulatory authority, IT- og Telestyrelsen, Telia Mobile may retain its double set of GSM 900/1800 licenses until the end of 2005, when one set is to be returned. IT- og Telestyrelsen has also decided that one of the two UMTS licences shall be sold or returned not later than 31 January 2005. As previously published in connection with the announcement of the deal, TeliaSonera expects the acquisition to generate synergies with a total pre-tax cash flow effect of SEK 490 million from 2006, of which SEK 20 million is capex synergies. Cost savings are related to closing down one of the overlapping GSM networks, managing one single brand and integrating functions and premises. Before implementation costs synergies are estimated to have a net present value of SEK 4,100 million.. Implementation costs are expected to amount to approximately SEK 540 million and relate mainly to the costs for transferring traffic to the retained GSM network, initial marketing and subscriber migration costs and a maximum payment of the guaranteed UMTS license costs of SEK 260 million. Capital expenditure related to the integration is estimated to approximately SEK 250 million. TeliaSonera has earlier communicated that it expects significant write-downs in relation to the transaction, mainly related to closing down one of the networks. However, initially there will be no write-downs. The excess of the purchase price over the book value of Orange's net assets will be assigned partly to the customer base and other identifiable intangible and tangible assets, and mostly to goodwill. The initial valuation will not have an impact on TeliaSonera's results of operations. Goodwill and other assets of the combined entity will be tested for impairment annually. Any such impairment test could have a negative impact on TeliaSonera's future results of operations, in case the recoverable value arrived at would be lower than the carrying value of the assets. Press conference Kenneth Karlberg, President, TeliaSonera Norway, Denmark, Baltic countries, and the newly appointed President of Telia Mobile, Jesper Brøckner, will hold a press conference today at 14.00 hours at Admiral Hotel, Toldbodgade 24-28, Copenhagen. Forward-Looking Statements Statements made in the press release relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of TeliaSonera. For further information journalists can contact: TeliaSonera´s Press Office, +46-(0)8-713 58 30 TeliaSonera is the leading telecommunications company in the Nordic and Baltic regions. At the end of December 2003 TeliaSonera had 11,957,000 mobile customers (37,610,000 incl associated companies) and 8,061,000 fixed customers (9,160,000 incl associated companies) and 1,631,000 internet customers (1,691,000 incl associated companies). Outside the home markets TeliaSonera has extensive interests in the growth markets in Russia, Turkey and Eurasia. TeliaSonera is listed on the Stockholm Exchange and the Helsinki Exchanges. Pro forma net sales January-December 2003 amounted to SEK 81.7 billion (EUR 9.01 billion). The number of employees was 26,694. ------------------------------------------------------------ This information was brought to you by Waymaker The following files are available for download:

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