TeliaSonera buys Asian operators for $488m

HELSINKI (Reuters) - Top Nordic telecom operator TeliaSonera AB aims to tap growth in Asian markets by buying controlling stakes in operators in Nepal and Cambodia for around 3.2 billion Swedish crowns ($488 million), it said on Friday.

TeliaSonera said it would buy a 51 percent stake in TeliaSonera Asia Holding BV from Kazakhstan’s Visor Group, which has an 80 percent stake in Nepalese operator Spice Nepal and 100 percent of Cambodia’s Applifone.

TeliaSonera said it expected to close the deal on Oct. 1.

Chief Executive Lars Nyberg said the purchases were an indication of where the company’s growth would increasingly come from in the future.

He said Eurasia offered rapid growth possibilities as economies are growing fast and mobile penetration levels low.

“You should see this as a sign of what our priority is when we look beyond the CIS markets,” Nyberg told a conference call.

One analyst who declined to be identified said Nepal was the more interesting acquisition of the two.

“There is a big population ... low mobile penetration and quite limited competition,” he said.

In Cambodia, competition is fiercer, he added.

Lena Osterberg, analyst at SEB said the price TeliaSonera was paying for the assets was too high, but Nyberg said the price was fair, given the good growth opportunities.

TeliaSonera shares were down 3 percent at 0950 GMT, against a 2 percent fall in the wider Stockholm market.

TeliaSonera has expanded rapidly in countries in the former Soviet Union in recent years as it diversifies away from its mature home markets in Scandinavia.

It has operations in Kazakhstan, Azerbaijan, Uzbekistan, Tajikistan, Georgia and Moldova as well as the Baltic states.

However, expansion has not come without headaches and TeliaSonera has been in a long-running dispute over control of Turkish operator Turkcell TCELL.IS and Russia's Megafon.

Nyberg said Eurasia was an increasingly important profit driver. He said the region had EBITDA margins over 50 percent against around 32 percent for the group as a whole.

“That’s why we should invest in this region,” Nyberg said.

TeliaSonera said Spice Nepal is the second-largest mobile operator in Nepal with around 1.6 million subscribers and an estimated market share of about 41 percent. It had sales of $41.1 million in 2007 and $34 million in the first half of 2008.

EBITDA, excluding non-recurring items, was $19 million in 2007 and $18.2 million in the first half of 2008. Nepal has a mobile penetration of around 13 percent, TeliaSonera said.

Applifone is the fourth-largest mobile operator in Cambodia, with some 97,500 subscribers and an estimated market share of 3 percent. Mobile penetration in the country is around 21 percent.

Tero Kivisaari, TeliaSonera’s Eurasia head, said he expected ARPUs (average revenues per user) in both countries to be stable or to decline slightly.