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Fornebu (pte043/09.02.2005/15:30) - Norwegian telecom giant Telenor http://www.telenor.no has posted a loss of more than 3 billion Norwegian Kroner (358.7 million euros) for its operations in Denmark and Sweden. As the Financial Times (FT) http://www.ft.com reports, Telenor has benefited from strong growth in its international operations, which include mobile operators in Malaysia, Bangladesh, Russia and Hungary, but has struggled to assert itself in neighbouring Scandinavian markets.
To strengthen its position in the market, in 2003 theNorwegian company spent 3.68 billion Danish Kroner (495.6 million euros) to buy the 46 per cent it did not own in Sonofon, Denmark's second largest operator. However, profits at Sonofon have fallen in recent times due to strong competition. Furthermore, the group's position as number two operator has been challenged by Sweden's Telia after the Swedish company bought Orange's Danish operations last summer. On Tuesday, Telenor announced it would write down the value of Sonofon by 2.4 billion Norwegian Kroner (287 million euros).
In Sweden, Telenor has fought hard in the low-cost segment with its Djuice brand, a virtual operator that uses the network of Swedish rival Tele2. According to Telenor, its development has been "a bit disappointing." Furthermore, as its contract with Tele2 is partially fixed-price, this will lead to a loss on the contract of 562 million Norwegian Kroner (67.2 million euros) to be taken in the fourth quarter. "We need to get more customers and more traffic. We need to refresh our approach," said Telenor in a statement. As the FT reports, consolidation in the Nordic mobile markets was expected to have eased competition but the arrival of 3, the 3G operator, has again focused attention on prices.
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