[August 9, 2001] The Board of Directors of Sonera's Norwegian subsidiary Broadband Mobile ASA (Sonera 50%, Enitel ASA 50%) has decided to take immediate measures to liquidate the joint venture. The move is based on Enitel's material change of strategy to focus on its core business and to divest its shares in 3G business.
"Our decision to apply for a 3G license in Norway was based on our aim of gaining a 3G license in Finland, Norway and Sweden. However, we did not receive a license in Sweden, so the scaling and synergy benefits that we expected to achieve with geographically adjoining mobile communications markets did not realize. The decision is also supported by the small size of the Norwegian mobile communications market", says Senior Vice President Aimo Olkkonen, in charge of Sonera's international mobile business holdings and their development.
"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 Broad band Mobiles shares required Sonera to either to take possession of the whole company or place it into liquidation. Sonera's strategic choice has been not to run operator business outside Finland as a majority shareholder. Thus the only option in accordance with our strategy was to immediately take measures to place the company into liquidation," Olkkonen
continued.
Broadband Mobile ASA received a UMTS license on 29th October 2000. The NOK 200 million (EUR 25 million) license price has been settled and no penalties will be incurred in returning the license to the State of Norway.
Broadband Mobile's external liabilities total approximately EUR 28 million (NOK 220 million), for which the company's bankrupt estate will be liable in accordance with the laws of Norway. The company has not concluded any agreement on purchasing a UMTS network.
The decision on placing Broadband Mobile into liquidation and on discontinuing the company's operations is individual and based on our local partner's decision to withdraw from our joint venture. It has no impact on Sonera's other 3G mobile communications associated companies in Germany, Italy and Spain", stresses Olkkonen.
Sonera's total investment in Broadband Mobile ASA is approx. EUR 18 million (NOK 145 million, including license fee). Sonera will enter a loss of approximately EUR 14 million in its third quarter financial results due to the discontinuation of Broadband Mobile ASA's business operations and will not incur any future capital or operating expenses related to the venture.
