TeliaSonera has increased its shareholding in mothballed Spanish 3G operator Xfera to 80%, and plans to shake out the cobwebs from Spain’s sleeping “fourth” operator, and launch 3G services after carrying out a UMTS rollout.
The Scandinavian operator paid SEK657 million for the share increase, and plans to invest around a €1 billion in networks, IP-service platforms, start-up costs and spectrum fees (including accrued spectrum fees from 2002). It also said it expected to reach positive free cash flow during the same time frame.
Xfera was awarded a nation wide UMTS license in Spain in March 2000 and TeliaSonera is one of the founding members. During the past years the owners have significantly curtailed Xfera’s capital and operating expenditures as it waited for UMTS technology costs to reach a level at which it felt was realistic to enable the launch of commercial services. In June 2004, the original license conditions were amended by the Spanish Ministry of Industry, Tourism and Commerce.
“We believe that there now are opportunities to make use of Xfera’s UMTS license in combination with GSM national roaming. The market conditions in Spain give room for another player. This, together with decreasing vendor prices as well as availability of good quality and reasonably priced 3G terminals, provides us with an opportunity to establish ourselves in a new market.” Anders Igel, President and CEO of TeliaSonera , said.
The Spanish mobile market includes three established operators and a penetration of approximately 91%, corresponding to some 40 million mobile users of the total population of 44 million. 3G terminal penetration is accelerating and TeliaSonera estimates that the number of handsets in the market exceeds 1.2 million.
“We are committed and will employ all our knowledge and experience to introduce a new competitive player into the Spanish market”, continues Anders Igel.