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| Thursday, 17 April 2008 | |
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Would a French takeover of TeliaSonera mark the end of Nordic telecom innovation?
After a quiet spell, with the likes of Deutsche Telekom and Telefónica building sub-regional empires, France Telecom is dropping heavy hints that it too is in an acquisitive mood. Squeezed at home, it is seeking to expand growth by venturing abroad. Nothing new there. But its choice of target for such expansion is unusual: the Nordic region. For three decades, the carriers of Denmark, Finland, Norway and Sweden have alternately played footsie with each other or used their boots to inflict painful blows on their near-neighbours and closest rivals. Note that the region’s former state-owned PTTs are class acts: TDC, Sonera, Telenor and Telia are regularly found at the top of telco performance tables and have dragged their countries to the upper echelons of the global penetration league in sectors ranging from POTS to mobile to broadband. To date, however, regional tele-politics in Scandinavia have largely been an internal affair. Over years characterised by attempts at cooperation followed by invasions of each other’s backyards, the main tangible outcome has been the 2002 merger of Sweden’s Telia and Finland’s Sonera. The creation of TeliaSonera came after enough attempted permutations at Nordic consolidation to provide a tele-political ‘karma sutra’. It is post-coital TeliaSonera that seems to have aroused the French, although reports suggest that Norway’s Telenor and even PE-owned TDC is also attracting FT’s roving eye. The attractions of TeliaSonera are obvious: a great big pair of dominant market positions in two flourishing markets and a perky presence in the juicy nether regions of European and Asian markets. Luscious. France Telecom, it has to be said, is an unlikely bedfellow. Hamstrung by franco-centric industrial policy, one must doubt its ability to stimulate the Finnish-Swedish combine. Years ago, the head of one FT subsidiary in the Nordic region, in charge of an operation established to take advantage of early liberalisation even while France remained a ‘closed shop’, made matters clear. Surveying a highly streamlined business and data communications operation, and asked whether such a business model would be conceivable for France Telecom in his native land, he laughed. “I would be fired by either my company or my political bosses even before I had finished my presentation. I would then be fed to the trades unions. Alive.” Even 20 years on from that conversation, not all that much has changed in French telecom policy. In that respect, the prospect of an injection of Nordic savvy and efficiency into FT would be something to welcome. But, of course, tail rarely wags dog where megabuck M&A is concerned. The more likely outcome is that the good would be smothered by the flabby and the flatulent. For fans of serial innovation stretching back a century (in France as well as in Scandinavia, it should be noted), that would be a shame. Which is not the same as saying it won’t happen: France Telecom is clearly intent on waving its prodigious (if a bit debt-heavy) wad around in public. Pass the umbrella, please. Jim Chalmers |
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