TeliaSonera sells NextGenTel to Telio

TeliaSonera has agreed to sell its Norwegian subsidiary NextGenTel to Telio, a local VoIP provider, for NOK 601 million on a cash- and debt-free basis. TeliaSonera acquired NextGenTel in 2006. For the first nine months of 2012, the company reported revenues of NOK 693 million and an EBITDA excluding non-recurring items of NOK 118 million. Following a strategic review of the operations, TeliaSonera has concluded that NextGenTel does not constitute the appropriate platform to compete successfully in the Norwegian broadband market.

The agreement is subject to approval from regulatory authorities. TeliaSonera will receive NOK 531 million in cash upon closing, with the remaining consideration of NOK 70 million to be paid in Telio shares. TeliaSonera will recognise a loss of SEK 1.6 billion in the fourth quarter of 2012 from the write-down of goodwill.

Telio said that through the acquisition it will become the number three provider of fixed broadband in the Norwegian market and the number two provider of xDSL broadband.

Telio has held a leading position within VoIP services for a number of years in the Norwegian market and has recently expanded its product offering to include related services, including mobile and broadband services (through an agreement with NGT). The operator said the acquisition will not only secure its in-house capabilities and delivery of such broadband services, but also significantly expand its customer base. The combined entity will thus have substantial potential for cross-selling of services to the combined company’s customer portfolio, Telio said. Furthermore, the operator said that the combined entity will have significant potential for realising scale benefits and more cost effective operations.