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    Tele2 flexes its MVNO muscles in Norway


    TeliaSonera’s subsidiary, NetCom, has signed an agreement with Tele2 Norge AS to use Netcom’s mobile network as a mobile virtual network operator (MVNO).

    The agreement means transferring all Tele2 Norge’s traffic from Telenor’s network to NetCom’s network before April 1, 2008. Tele2 has been active in the Norway since 2000 and has over 400,000 subscribers, giving it about 8% market share.
    Tele2 Norge will start operating as an MVNO in NetCom’s mobile network as from summer 2007 and the agreement will include access to future services – for example turbo 3G.
    The initial term of the agreement is four years after the transfer is fulfilled. NetCom estimates that the agreement, after fulfilment of the transfer, will have an annual impact on sales of approximately SEK 500 million.
    Carrie Pawsey, Senior Analyst at Ovum said, “Tele2 previously had a reciprocal MVNO deal with Telenor. This meant that Telenor was an MVNO on Tele2’s network in Sweden (Comviq) and Tele2 was an MVNO on Telenor’s Norwegian network. That arrangement looked set to change when Tele2 bid for, and won, a 3G licence. However, the economics as a Greenfield player didn’t stack up and Tele2 returned the licence and extended its MVNO agreement with Telenor to include 3G services.
    “The announcement today means that from mid 2007 Tele2 will connect all new customers onto the NetCom network. In addition the previous Telenor contract will expire at the end of March 2008 by which point all customers will have been moved onto the NetCom network.
    Pawsey said although the terms of the deal were not public it is likely that Tele2 used its market power ot negotiate a competitive bid for TeliaSonera, which can also offer the benefits of its Turbo 3G’ HSDPA network.
    “This serves as a reminder to host providers of the power of a successful MVNO. With an 8% market share, Tele2 has become a formidable player in the Norwegian market, which in turn has meant it is able to renegotiate its wholesale contract with more favourable conditions,” Pawsey added.