"The acquisition is in line with Telenor's strategy. We have said that we will take control wherever possible and financially desirable, and exit operations where we are not able to take control, or do not wish to do so," said Chief Executive Officer of Telenor Mobile, Arve Johansen. "The mobile markets in Scandinavia are increasingly becoming one market, and SONOFON is an important strategic asset for Telenor in this region. The benefits resulting from economies of scale within our home market will be improved with SONOFON as a fully owned subsidiary of Telenor. A strong position in the home market is an important prerequisite for our international operations."
SONOFON is the second largest mobile operator in Denmark with a market share of 24% in terms of subscribers and 27% in terms of revenue. SONOFON holds a particularly strong position in the business segment, and has the highest usage per subscriber. ARPU increased during 2003 despite significant price erosion in the Danish market.
"SONOFON has defended its market position in a highly competitive environment. The company has a dedicated and competent organisation," said President and CEO of Telenor, Jon Fredrik Baksaas. "Telenor believes that there are opportunities for further operational improvements, and we estimate the synergies between Telenor's mobile operations in Scandinavia to be in excess of NOK 1 billion calculated on an NPV basis."
Telenor's credit rating is expected to be unaffected by the acquisition.
The deal is subject to approval by the Danish National IT and Telecom Agency and the European Union, and the transaction is expected to be completed in the first half of 2004.
For further information:
Dag Vangsnes, Executive Vice President, Telenor Mobile, tel: (+47) 917 89 427
Dag Melgaard, Chief Press Spokesman, Telenor ASA, tel: (+47) 901 92 000
Press conferences will be held in Norway at 10:00 am at Telenor Expo, Fornebu. The conference will be broadcast live over the Internet at www.telenor.com. In Denmark a press conference will be held at 12:00 in SONOFON'S offices in Copenhagen.
International conference call
On the same day at 2:00 pm local Norwegian time, an international telephone conference will take place, intended for investors and analysts. Participants should call tel: +47-80080119 or +47-23000400
Headquartered in Oslo, Norway, Telenor is an international provider of high quality telecommunications, data and media communication services. Telenor is one of Norway's largest companies with revenues in 2002 of approx. NOK 48.8 billion and a work-force of 22,100 domestically and abroad. Telenor is listed at the Oslo Stock Exchange (TEL) and Nasdaq in New York (TELN).
The business area Telenor Mobile constitutes Telenor's main axis for internationalisation and further growth. Telenor Mobile is a leading provider of mobile voice and value added services in the Scandinavian region, Central Eastern Europe and South-East Asia. As one of the world's most advanced mobile companies the company embraces operations in 12 countries. The total number of subscribers as of September 30th, 2003 was 14.2 million, based on proportionate Telenor Mobile ownership share in the companies. Based on 100 per cent figures the total subscriber base stood at 31.4 million.
SONOFON was incorporated in 1991 and has enjoyed continuous growth over the past years. Today SONOFON is the second largest telco in Denmark with more than a million mobile subscribers and turnover of more than DKK 3bn, first nine months 2003. Revenues in Q3 2003 were up 3% on Q3 2002 to DKK 1,080 million. EBITDA amounted to DKK 317 million DKK, up 4% on the same period last year. The operating profit margin for Q3 was 29%. In the first nine months of the year, SONOFON achieved net revenues of DKK 3,207 million, up 8% on the same period last year. At the end of the period, SONOFON's own mobile customer base amounted to 1,086,000, which is 53,000 more subscribers than at the end of the same period last year.
Total EBITDA (that is earnings before financials, tax, depreciation and amortization) in Q1-3 amounted to DKK 893 million, up DKK 35 million (4%) on the same period last year.