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Tele2 to Weigh Sale of Dutch Fixed-Line Assets

Tele2 Sim Card
Tele2 AB had sales of 1.38 billion kronor ($210 million) in the Netherlands last quarter, or 18 percent of its total. Photographer: Andrey Rudakov/Bloomberg

Nov. 21 (Bloomberg) -- Tele2 AB, the wireless carrier building a fourth-generation network in the Netherlands, may consider selling older fixed-line assets in the country after customer declines accelerated.

The company could sell the consumer part of its fixed-line business in the country, or upgrade the infrastructure to offer faster Internet access or so-called fiber-to-the-home services, Chief Executive Officer Mats Granryd said yesterday in an interview at an investor conference in Barcelona.

“We are weighing our options,” Granryd said. “What we have seen in the third quarter is an acceleration of the fixed line being less attractive.”

Tele2, based in Stockholm, ultimately sees itself becoming primarily a wireless company, Granryd said. It is building a faster, fourth-generation mobile network in the Netherlands where Granryd says prices are unusually high and mobile-data use low. Still, the company may face competition from the likes of John Malone’s Liberty Global Plc and Carlos Slim. Both billionaires have attempted to take control of assets in the country, where Royal KPN NV is the biggest carrier.

“Liberty I think is gearing up tremendously,” Granryd said. “The battle right now is in the fixed domain, not the mobile domain.”

Shares of Tele2 declined 0.2 percent to 80 kronor at 9:36 a.m. in Stockholm.

Owner’s Prerogative

Tele2 had sales of 1.38 billion kronor ($208 million) in the Netherlands last quarter, or 18 percent of its total. Sweden, its biggest market, accounted for 41 percent.

Phone-industry executives, as well as analysts including Bjorn Gustafsson of Kepler Cheuvreux, have predicted takeovers in the Nordic region’s saturated telecommunications market where sales are dropping as prices shrink. Granryd said he isn’t aware of Sweden’s Stenbeck family, which controls Tele2 through Investment AB Kinnevik, being interested in selling.

“They might change their mind but that’s their prerogative,” he said.

The company also operates in Norway, the Baltic region, Kazakhstan and Croatia, for a total of 13.2 million mobile-phone subscribers.

“We’re not religiously holding on to any of our properties except maybe Sweden,” Granryd said.

To contact the reporter on this story: Amy Thomson in Barcelona via athomson6@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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