The battle between the big telecom operators in the Nordic market is getting tougher, and it increasingly looks like it will be a race between the two big ones, Telia and Telenor. Telia has abandoned its Asian adventures and now focuses entirely on the Nordic region. The same applies to Telenor. In any case, almost. So far, the Norwegian operator still has companies in Pakistan, Burma, Thailand, Bangladesh and Malaysia, but the analysis company IDC believes that Thailand and Burma are next in line to be sold off.
On April 9, Telenor made the latest move in the battle for the Nordic region, when it was able to buy itself into the Finnish market by acquiring 54 percent of DNA for approximately SEK 16 billion. This means that they are now keying in on Telia in the crucial measure for the market, many subscribers.
– Telia and Telenor are now the largest in the Nordic region, and they are the only ones that cover all four countries. The price that Telia, Tele2 and Telenor pay for their acquisitions is high. Calculated per subscriber, the prices are between 10,000 and 25,000 kronor, says Martin Sundblad, head of analysis at IDC and the fact that it is a high price, but also that it is about long-term investments. If you look at the measure average income per user, ARPU, it is higher in the Nordic countries than in the rest of Europe.
-The price is motivated by the fact that we Nordic customers are loyal, and willing to pay well for broadband and TV services. Even though the revenue per customer is around SEK 2,000 per year, the margins are very high to justify the price.
The number of subscribers is the main weapon in the forthcoming operator war, and if you compare Telenor’s purchases with the other three major Nordic acquisitions that have been made, the Norwegians seem to have bargained on their Finnish shopping round, as the price per subscriber for DNA is less than half of what Telia paid in July 2018 when they bought GET and TDC Norway.
After Telenor’s purchase of DNA buttons, Telenor has made a significant contribution to Telia. Telia currently has just over 13.1 million mobile subscribers in the Nordic region. Telenor’s corresponding figure is just under 10.3 million. Finnish Elisa is third with almost 4 million mobile subscribers and is puffed in the neck by the fourth Tele2, which has just over 3.8 million.
It is clear that the battle is more about the Nordic countries than about the individual countries today. The four major Nordic countries certainly still have their respective national telecommunications companies, but there is an obvious effort by Telia, Tele2 and Telenor to cover the entire region. The question is what will be the next step in the consolidation of the Nordic telecom market. Danish TDC now has a stated strategy of primarily being a network operator at home, so it is not impossible that the next acquisition will also cut to the east.
– Elisa and TDC are the only remaining national operators, and it is perhaps natural to expect that Elisa will be the next major acquisition, Martin Sundblad guesses.
O other if more acquisitions are waiting around the corner or not, it is clear that it can be a certain size to be able to participate in the Nordic struggle that awaits.
– In the future, the operators have several heavy investments to make. The copper net will be replaced with fiber, and 5g will be rolled out to eventually supplement 4g. Growth in telecom is low, so investments need large-scale to be counted home, says Martin Sundblad.