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COMPANY PROFILE
North Star
The ninth largest international cellular operator in the world, Telenor’s expansionist
ambition is undimmed. But the firm has not always had an easy time with M&A activities.
�orway is a country steeped in
the history of mobile communications;
it was a Norwegian
university solution that won the
CEPT competition in Paris in 1987
to determine which standard would
go on to become GSM. It was also
the first European country to get
an automatically switched mobile
telephony service when NMT debuted
in 1981.
At each stage of the country’s
communications development, Telenor—which
began life as a stateowned
PTT called Telegrafverket in
1855—has played an instrumental
role. Today the carrier, now partially
privatised—the Norwegian Government
still holds a little over 50 per
cent of the company—ranks as the
ninth largest mobile carrier by proportionate
subscribers, according to
the Informa Telecoms & Media World
Cellular Investors service.
The firm has shareholdings in
mobile operations in 12 markets
(see table) and had a proportionate
subscriber base of 86.7 million at the
end of June this year. Ninth largest
in the world is clearly not enough for
the Norwegian incumbent, though,
and expansionist ambitions remain
at play in the boardroom. At the firm’s
capital markets day in June 2008, CEO
Jon Fredrik Baksaas said Telenor was
considering a number of opportunities,
including, “expansion within
existing regional clusters”.
Indeed, at the time of writing,
Telenor is believed to be close to
securing a 43 per cent stake in Indian
carrier Unitech, which holds
licences to operate in a number of
Indian telecoms circles but has yet
to begin service. Big ticket purchases
are likely to be the order of the day
for Telenor, given that climbing the
rankings once inside the top ten is a
substantial undertaking.
However, Telenor’s emerging markets
have not been offering the kind of
return that might be traditionally as-
Telenor company history
1855: The Norwegian Telegraph Administration’s first telegraph line,
between Drammen and Christiania, is officially opened.
1878: The first inter-city telephone connection opens between
Arendal and Tvedestrand
1920: The first automatic exchanges are installed in Norway.
1966: The first manually switched mobile telephony system is
introduced.
1969: Nowegian Telegraph Administration changes its name to
Norwegian Telecommunications (Televerket).
1981: Mobile telephony is automated and NMT is launched in
Norway.
1993: GSM service launched after Televerket’s wholly owned Tele-
mobil wins one of two GSM licences in 1991.
1995 – 97: Newly named Telenor wins licences in Montenegro,
Ukraine and Bangladesh after Northwest GSM, in which Telenor holds
13 per cent, starts service in St. Petersburg, Russia.
1999: Attempted merger with Telia fails.
2000 onwards: Telenor privatised in largest ever Norwegian
listing. Takes stake in Thai operator TAC, increases stakes in Malaysia
and Hungary. WCDMA operations begin in 2001. Pakistan, Denmark,
Serbia added to portfolio. Hits 86.7 million proportionate subscribers
in 2008.
sociated with high growth operations
during 2008. Like other international
carriers, Telenor looked to the emerging
markets to compensate for slowing
growth in its saturated domestic and
local markets. But in July this year
it warned of weaknesses in its Asian
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mike.hibberd@informa.com
territories, caused by a reduction in
consumer spend brought about by
inflation rate increases. In contrast,
the firm’s Q2 performances in Europe
were stronger than expected.
The carrier has not always had an
easy time of acquisition and investment.
In 1999 a proposed merger
between Telenor and Swedish incumbent
Telia foundered as a result
of political differences; top of a list
of disagreements was the issue of
where to site the firm’s headquarters
with each firm (both were entirely
state-owned at the time) coveting
the national kudos. It may have
galled Telenor that, subsequent to
the collapse of this proposed marriage,
Telia found happiness with its
opposite number in Finland, creating
TeliaSonera.
More recently Telenor was an
object of desire for another big
international ex-PTT; France Telecom’s
Orange. The French carrier
expressed an interest in both
Telenor and TeliaSonera and the
Norwegian’s response was to voice
its own enthusiasm for a takeover
of the Swedo-Finnish JV. None of
the proposals came to fruition, with
the substantial overlap in operations
between Telenor and Telia—
primarily in Sweden, Denmark and
Norway—seen as the most decisive
obstruction.
And when deals have succeeded,
Telenor has not always been blessed
with calm waters. It has suffered
from long-running disputes with
Russian investment group Altimo.
The two firms are co-shareholders
in Russian carrier Vimpelcom and
Ukrainian player Kyivstar and have
long jostled for control of the two
ventures.
In October reports began to circulate
of a possible solution that
would see each cede control of one
of the operations to the other. It was
suggested that Altimo would gain
control of VimpelCom, with Telenor
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