STOCKHOLM, March 14 (Reuters) - Swedish telecoms group TeliaSonera is interested in making acquisitions, its chief executive said on Wednesday, just days after the company was linked by media with a possible buyout of rival ‘3’s operations in Denmark.
Operators in Denmark have been coping with fierce price pressure in recent years and earlier this week daily Dagens Industri said ‘3’, Denmark’s fourth largest operator, was ready to sell its business in the country.
Asked whether he might be a buyer, Telia CEO Lars Nyberg told reporters at a conference; “I always buy if it is the right price.”
Dagens Industri said ‘3’s owners, Hong-Kong based Hutchison Whampoa and Sweden’s Investor, had probably invested around 8 billion Swedish crowns ($1.2 billion) in the Danish operation and would want to recoup that money.
Analysts said Telia would not pay such a high price.
“That is way too expensive,” said Sven Skold, an analyst at Swedbank, who put the value at “only a few billion (crowns)”.
Telia has itself been struggling in Denmark in recent quarters and said at the end of the fourth quarter it would cut around 20 percent of its workforce in the country.
Core profit was down 37 percent in 2011 to 744 million Swedish crowns ($109 million).
“We are not going to leave Denmark,” Nyberg said. “But we have concerns in Denmark. It is a very difficult market, that much is certain. No-one is making real money in Denmark.”
TDC is the biggest operator in Denmark followed by Telenor, Telia and ‘3’.
European operators in general are under pressure from regulators wanting to push down prices, bruising competition and network upgrade spending.
“I think that it would be good for Europe if we had more in-market consolidation,” Nyberg said.
“The rule of thumb is that you have the same EBITDA-margin as you have market share,” he said. “If you look at all the third-biggest and fourth-biggest operators, they are not making any money.”
But Nyberg said regulators were making consolidation difficult.
“The regulators were given the task many years ago to make sure there was sufficient competition and they have interpreted that as meaning that the more operators there are, the better. I am not sure that is the whole answer.” ($1 = 6.7640 Swedish crowns) (Reporting by Niklas Pollard; Editing by Andrew Callus)