Telia, Telenor to share phone network in Denmark

STOCKHOLM: TeliaSonera and rival Telenor will share their networks in Denmark as they look to cut costs and gain a competitive edge in a tough market, the two companies said on Tuesday.

TeliaSonera gave no figures for how much it expected to save from the deal, which covers second, third and fourth generation mobile infrastructure, but said sharing networks would reduce investment costs and have a significant effect on financial results.

Telenor gave no financial details, either.

Network sharing has become a popular tool among telecoms operators as they look to cut costs and focus on value-added services rather than infrastructure. Some players, however, see the network as a key competitive asset.

Telenor already shares a 4G network in Sweden with Tele2 while Telia shares a 3G network with Tele2 in Sweden.

Telia, Denmark's third biggest mobile firm, said its partnership with Telenor would cover antennas, towers and transmission equipment, but not involve the two companies' core networks, enabling the firms to continue to offer different services to mobile users.

Telia, which also operates under the Call Me and DLG Tele brands in Denmark, said in the first quarter that the fragmented Danish market was challenging, with fierce competition from smaller players. Sales in Denmark in local currency fell 7 percent, partly due to regulators' cuts in interconnect fees.

Telenor, which has a 28 percent mobile market share in Denmark, said in the first quarter it was facing price pressure in both Denmark and Norway.

Telia and Telenor said they would set up a common infrastructure company to operate their joint 2G, 3G and 4G networks.

Copyright Reuters, 2011