Telia + Sonera=TeliaSonera

Telia and Sonera complemented each other in several ways when the companies merged in 2002. They were both listed on the stock market and both had international ambitions. But they had invested in different markets.

During the 1990s, the world's telecom markets were changed to their very foundations. Competition had begun in Sweden as early as the 1980s, long before most other countries. In the rest of Europe, the fall of the Berlin Wall in 1989 and development of the EU's telecom policy in the years thereafter led to an entirely new situation that both placed many new demands but also created just as many opportunities. The winds of change were also blowing in the Nordic countries due to the previous state-owned telecom administrations in Norway, Denmark and Sweden having been converted to commercial enterprises and being exposed to growing competition. The Internet also began to make an impact in the mid-1990s, entailing even more technical and market challenges.

Televerket had been converted into a joint-stock company in 1993 under the name Telia AB. The new situation with many new technologies, more and more private competitors and a rapidly increasing number of new markets to compete in demanded further changes. After having made an unsuccessful attempt to merge Telia with Telenor during the period 1997–1999, Telia was listed on the Stockholm Stock Exchange in June of 2000. After the listing and in the wake of the IT bubble bursting, new opportunities opened for a larger future-oriented change in the form of a merger with the Finnish telecom company Sonera.

Natural step for merger

Merging Telia and Sonera proved to be easier in many ways and a more natural step. The two companies, which were both now listed on the stock exchange, had collaborated previously and Sonera at the beginning of the 2000s was also facing difficult financial problems. In the preceding years, Sonera's management had namely dramatically expanded, consequently incurring very substantial costs through for example, investments in a new mobile network and the purchase of two very expensive 3G licenses in Germany and Italy. Telia on the other hand – which had refrained from similar investments in 3G licenses – generally had more stable finances.

Because Telia and Sonera both had international ambitions and had not only invested in different markets but also found themselves in entirely different financial situations, they complemented one another in many ways. Plans for a merger were consequently made public in March of 2002. The subsequent negotiations went smoothly and progressed so quickly that the two companies could be merged as early as December.

The merger was formalized by Telia buying Sonera. After the merger, the Swedish state owned 46 percent of the new TeliaSonera and the Finnish state over 19 percent. The company immediately became a large international concern and obtained a strong market position, primarily in Sweden, Finland and the other Nordic countries, but also in the three Baltic countries of Estonia, Latvia and Lithuania and the more distant Eurasia.

Since 2002, both the Swedish and the Finnish state have reduced their ownership in TeliaSonera.

Written by
Anders Edwardsson