TeliaSonera establishes new infrastructure company

TeliaSonera is establishing a new fully-owned telecom infrastructure subsidiary in Sweden. The company will cover copper and fibre networks and trenches, and sell its products on equal terms to TeliaSonera’s wholesaler customers and the company’s own operations.

TeliaSonera’s goal is to retain its position as the leading broadband provider in Sweden by means of a well-functioning market based on commercial and business terms. Plans include developing both end customer and wholesaler targeted products.

Market size, geographical conditions and vast investment needs make it hard for many operators to build and maintain a fixed nationwide telecom infrastructure. TeliaSonera is prepared to continue taking responsibility for that role. Several operators sharing the same infrastructure saves customers money, as infrastructure is the single most expensive part of electronic communications.

This is why TeliaSonera opened its copper network to other operators already back in 2000, before being legally obligated to do so. The new infrastructure company will clarify equal treatment of operators and increase the possibilities for control.

A well-functioning Swedish broadband market is important to TeliaSonera. We want Sweden to be number one not only in infrastructure but also in broadband usage. Therefore we are now also investing in wholesale, for example by offering a variety of new products and services that meet operators’ needs. We hope that this results in a wider offering for all customers and an increased use of electronic services.

TeliaSonera establishes the new infrastructure company in order to ensure that the market’s requirement for transparency and full control is met. This means that all operators and our own operations are treated equally. We also believe that with a separate company, we will be able to run our infrastructure operations more efficiently. We understand that the company will be responsible for a major part of the Swedish infrastructure and that therefore there is general interest in how the operations are conducted.

TeliaSonera wants to continue to invest in the Swedish telecommunications infrastructure, but TeliaSonera must also be able to manage these investments within the scope of the requirement for equal treatment. TeliaSonera relies on the market forces and opposes the proposal of the Swedish National Post and Telecom Agency PTS for an act on so-called functional separation. The problems of the broadband market are not the kind that require such far-reaching legislative action. PTS suggests amendments that among other things weaken the right of ownership and may be contradictory to the respect for right of ownership protected by the Swedish Constitution.

“The proposal regulates in detail the operations of a listed company in a manner which is unacceptable to us”, says Anders Bruse, Head of the Broadband Services business area at TeliaSonera. “With our market-based plan, we are able to solve the problems of the broadband market on voluntary basis and much faster than by legislative means.”

Electronic communication legislation should create equal and common rules in Sweden as compared with the whole EU telecommunications market. We would like Sweden to follow the EU’s process and schedule as regards telecommunications legislation. The present EU directives are currently being reviewed, and during the autumn the Commission is expected to present a proposal that will regulate the prerequisites for the implementation of functional separation. If Sweden does not wait for the new EU directives, the legislation may have to be reconsidered.

The market is increasingly cross-border and the Swedish telecommunications companies are increasingly often in direct or indirect competition with other European companies. Equal treatment of the industry in Sweden and other European countries is becoming more and more important.

The new infrastructure company is estimated to launch operations in Q4 2007.