Finland’s Sonera said it will “take immediate steps to liquidate” Broadband Mobile ASA in Norway, partly because Enitel ASA, its equal partner in the third-generation wireless joint venture, already has decided to withdraw from the fledgling enterprise.
Broadband Mobile ASA received a UMTS license in late October for $23.3 million. In its Aug. 9 announcement, Sonera said it had invested $17 million in the venture to date and would enter a loss of about $12.5 million in its third-quarter financial results.
The incumbent carrier, whose majority ownership is held by the Finnish government, said it had not concluded any UMTS network equipment purchase for Broadband Mobile and will not incur any future capital or operating expenses related to the venture. The Norwegian government will not assess any penalties against the joint venture for return of the 3G license.
Sonera’s plan had been to capitalize on economies of scale and geographic proximity by deploying third-generation wireless services across Finland, Norway and Sweden, but it failed to obtain a 3G license in Sweden, said Aimo Olkkonen, senior vice president in charge of international mobile business holdings. As a matter of general strategic choice, Sonera will not be a majority shareholder in any operator business it runs outside its home country, he added.
“Enitel’s change of strategy to focus on its core business and to divest its shares in 3G business, and the lack of a buyer for Broadband Mobile shares, required Sonera either to take possession of the whole company or place it in liquidation,” Olkkonen said. “The decision … is individual and … has no impact on Sonera’s other 3G mobile communications-associated companies in Germany, Italy and Spain.”
