Swedish regulator calls for fixed-line sell-off

By Robert Anderson in Stockholm

FROM THE FINANCIAL TIMES

TeliaSonera, the largest Nordic telecommunications group, should be forced to hive off its fixed-line network to allow greater competition in the broadband internet market, the Swedish telecoms regulator recommended Thursday.

The proposal of local loop unbundling – which now goes out for consultation before the government makes a final decision – could affect the cabinet’s plan to sell the state’s remaining 37 per cent stake by 2010.

The news comes just a few days after the company announced that Anders Igel, chief executive, would resign by the end of July and a successor would be appointed within a year with the task of accelerating growth and restructuring.

TeliaSonera shares rose 1.6 per cent to €5.57 on relief that the PTS watchdog had not recommended that the company break off its copper wire and fibre-optic networks into an entirely separate company, but instead merely make a functional internal separation on the lines of the BT model in the UK.

The regulator recommended that TeliaSonera set up an independent subsidiary with its own financial targets, which would ensure equal treatment for TeliaSonera’s retail operations and alternative operators.

“A functioning buy-sell relationship between TeliaSonera and rivals concerning the access network is missing today,” Marianne Treschow, PTS director general, said. “And when the buyer-seller relationship is not working, it damages Sweden as an IT nation.”

TeliaSonera reacted with disappointment to the regulator’s advice, particularly the proposal to entrench the separation through new legislation.

“We do not like legislation and regulation,” said Anders Bruse, president of the broadband division. “We proposed commercial agreements between market players,” he added, pointing out that this could take effect much earlier than 2009, the earliest date likely with legislation.

SOURCE: THE FINANCIAL TIMES