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Telenor

Telenor is the incumbent telecommunications company in Norway, with headquarters located at Fornebu, close to Oslo. Today, Telenor is mostly an international wireless carrier with operations in Scandinavia, Eastern Europe and Asia. It is currently ranked as the seventh largest carrier in the world, with 143 million subscribers. In addition, it has extensive broadband and TV distribution operations in four Nordic Countries.

History

Telegrafverket

Telenor started off in 1855 as a state-operated monopoly, named Telegrafverket as a provider of telegraph services. The first ideas for a telegraph were launched within the Royal Norwegian Navy in 1848, but by 1852 the plans were public and in 1852 the Parliament of Norway decided on a plan for constructing the telegraph throughout the country. Televerket started by building from Christiania (now Oslo) to Sweden (Norway was at that time in a union with Sweden) as well as between Christiania and Drammen. By 1857 the telegraph had reached Bergen via Sørlandet and by 1871 it had reached Kirkenes. Cable connections were opened to Denmark in 1867 and to Great Britain in 1869. The telegraph was most important for the merchant marine who now could use the electric telegraph to instantly communicate between different locations, and get a whole new advantage within logistics.

Technology

The first telephone service in Norway was offered in 1878 between Arendal and Tvedestrand, while the first international telephone service between Christiania and Stockholm is offered in 1893. The first automation of a telephone system in introduced in 1920, finished in 1985. In 1946 the first Telex service is offered, in 1976 satellite telephone connections to oil platforms in the North Sea were installed and in 1980 the first steps to digitalise the telephone network starts.

Televerket opened its first manual mobile telephone system in 1966, being replaced with the automatic NMT system in 1981 and the enhanced NMT-900 in 1986. Norway was the first country in Europe to get an automatic mobile telephone system. The digital GSM system was taken into use in 1993; the GSM standard developed in Norway by the Norwegian University of Science and Technology (NTNU), but no mobile phone manufacturers emerged in the country. The third generation of mobile technology with UMTS system began full operation 2004. The Opera web browser was created in 1994 by Jon Stephenson von Tetzchner and Geir Ivarsøy during their tenure at Telenor. Opera Software was established in 1995 after the pair went on to continue development of their browser.

Deregulation and internationalisation

The corporation changed its name to Televerket in 1969. In 1994, the then Norwegian Telecom was established as a public corporation. The authorities wanted to deregulate the telecom sector in Norway, and sector by sector was deregulated between 1994 to 1998. An attempt to merge Telenor with its counterpart in Sweden, Telia, failed in 1999, while both still were owned by their respective governments. On December 4 2000 the company was partially privatised and listed on Oslo Stock Exchange and NASDAQ. The privatisation gave the company NOK 15,6 billion in new capital, the Government of Norway owning 77.7% of the company after the privatisation. By 2006 the governments ownership has been reduced to 53%.

In the second half of the 1990s, Telenor became involved in mobile operations in a number of countries: Russia (1994), Bangladesh, Greece, Ireland, Germany and Austria (1997), Ukraine (1998), Malaysia (1999), Denmark and Thailand (2000), Hungary (2002), Montenegro (2004), Pakistan (2004), Slovakia, Czech Republic, Serbia (2006). Operations in Greece, Ireland and Germany were sold in 1999/2000 and profits were re-invested in the emerging markets. In October 2005 Telenor acquired Vodafone Sweden, changing the name to Telenor in April 2006. On 31 July 2006, Telenor acquired 100 per cent share of mobile operator Mobi 63, one of two mobile operations existing in that moment in Serbia for Euro 1.513 billion.

Operations

Telenor offers a full range of telecommunication services in Norway, including mobile and fixed telephony as well as Internet access and content. Telenor still dominates the market place in Norway. However, competition has at times been intense in the mobile market and ADSL market, but Telenor remains the largest company in both sectors.

Telenor holds a prominent position in the Scandinavian Broadband and TV market, both with regard to the number of subscribers and to the extent of coverage. The TV distribution is branded Canal Digital.

Telenor used to provide a range of services related to satellite communication, including voice, television and data before its Telenor Satellite Services devision was purchased by Vizada in 2007.

Telenor Maritime Radio is responsible for the infrastructure for maritime radio communication in Norway, and also includes five manned coast radio stations whose primary purpose is to monitor the maritime radio traffic (over e.g. VHF and MF bands) and to assist marine vessels in distress.

Telenor Cinclus develops and sells products related to Automatic Meter Reading and other technologies related to machine to machine communication.

Telenor Research and Innovation (Telenor R&I, prior to September 1st 2006 known as Telenor R&D) is Norway's largest research establishment within Information and Communications Technology (ICT). Telenor R&I has research facilities in Fornebu, Trondheim and Tromsø.

Telenor also owns 51,8% of EDB Business Partner that offers a wide range of IT-services. The company is listed on Oslo Stock Exchange.

Telenor has sold a number of divisions after its privatisation, including Bravida, the former installation division and Findexa, now part of Eniro that is responsible for telephone directorys.

Mobile

At year-end 2005, Telenor held controlling interests in mobile operations in Norway, Denmark, Sweden, Ukraine, Hungary, Montenegro, Thailand, Malaysia, Bangladesh and Pakistan. Telenor also holds minority interests in mobile operations in Russia, having recently sold a minority share in Austria.

In accordance with Telenor's strategy of consolidating its position in international mobile by obtaining control of selected international mobile operations, and in order to maximize the benefit of cross-border synergies and increase overall profitability, Telenor also made new acquisitions in 2005.

In October 2006, Telenor entered into an agreement with Vodafone Group for the acquisition of subsidiary Vodafone Sweden for a consideration of NOK 8,170 million, including assumption of debt.

Effective from 26 October 2005, Telenor increased its economic stake in Total Access Communication (DTAC) in Thailand to 56.9 per cent. Following further transactions based on mandatory tender offers, Telenor's economic stake was raised to 69.3 per cent by year-end 2005.

Telenor's mobile commitments in Asia and Eastern and Central Europe are becoming increasingly important and to ensure optimal follow-up, Telenor has appointed dedicated Executive Vice Presidents for these regions. Telenor has also strengthened the co-ordination of operational and human resources across all the countries in which the group has operations through the appointment of two new Executive Vice Presidents to the Group Executive Management.

During 2005, Telenor successfully extracted a number of cross-border synergies across the group. Common technologies for optimal spectrum and network utilisation have been successfully implemented at each of the group's operations, and Telenor maintains its focus on adopting new technologies to improve service quality and reduce costs.

In order to harmonise the group's customer orientation across all markets, Telenor has developed a common segmentation model that enables more effective targeting, while also providing greater insight into the global markets. Telenor has developed a framework that provides affiliates with a proven concept of developing target segmented offerings and optimised go-to-market strategies.

Revenues from voice services include traffic charges, interconnection fees, and roaming charges. All of Telenor's mobile operations derive the greatest share of their total revenues from voice services, and Telenor continues to focus on developing new products, services and initiatives to increase Telenor's customer base and encourage higher usage.

Fixed-line

In Norway, Telenor provides communications solutions on a retail basis to both residential and business customers. Offers include analogue (PSTN) and digital (ISDN) fixed-line telephony, as well as broadband voice services over Internet Protocol (VoIP), Internet access via PSTN/ISDN and digital subscriber lines (xDSL), value-added services and leased lines. Norway now has one of the highest numbers of DSL lines per capita, currently at over 80% of households and steadily growing.

Through the acquisitions of Bredbandsbolaget and Cybercity, made in July 2005 for NOK 4.5 billion and NOK 1.3 billion, respectively, Telenor has gained a strong position in the fast-growing broadband markets in Sweden and Denmark. Bredbandsbolaget is Sweden's second largest provider of broadband services, offering full triple-play with high-speed Internet, VoIP and Internet Protocol (IP) television services on an all-IP fibre and xDSL network. Cybercity is Denmark's third largest broadband supplier, providing xDSL-based Internet access and voice services to both residential and business customers.

On 8 February 2006, Telenor increased its shareholding in the Swedish residential voice and broadband provider Glocalnet AB by 13.5 per cent, for a consideration of SEK 136 million (NOK 118 million), to secure a 50.1 per cent ownership interest. The acquisition triggered a mandatory offer for all outstanding shares in Glocalnet AB. This offer is valid until 21 April 2006. As at 28 March 2006, Telenor holds a 96.6 per cent ownership interest in Glocalnet.

In the fourth quarter of 2005, Telenor disposed of its operations in the Czech Republic and Slovakia with a loss of NOK 63 million.

Telenor holds a 20.3 per cent ownership interest in the listed Russian fixed-line operator Golden Telecom.

Broadcast

Telenor also operates the national terrestrial broadcast network in Norway, Norkring. It is also part owner of the company that will build the new digital terrestrial network, Norges Televisjon and the content provider RiksTV. Telenor is also the leading provider of satellite broadcasting services in the Nordic region, utilising three geostationary satellites. Telenor's key objective is to further strengthen Broadcast's position in the Nordic region.

On 2008-02-11 the THOR 5 satellite was launched into geostationary orbit by a Proton rocket. The launch was provided by International Launch Services using a launch vehicle built by Khrunichev Space Center. Cato Halsaa, CEO of Telenor Satellite Broadcasting, said the launch, "Demonstrates our commitment to the satellite industry and our firm belief that satellites will continue to play an important role as a distribution platform for TV entertainment." Telenor operates three satellites from its satellite control center at Fornebu (Thor2, Thor3 & Thor5), with Thor6 being launched in 2009.

Telenor Broadcast provides TV distribution services to more than three million households and businesses in the Nordic region, offering basic tier, "minipay" and premium pay-TV services to subscribers with Direct To Home (DTH) satellite dishes. In Norway and Sweden, Telenor also offers basic tier TV services, pay-TV and Internet services to cable TV subscribers, and in Denmark, the same services are marketed through a cable network; OE Kabel TV, acquired in November 2005. In Finland, Telenor offers premium pay-TV services to subscribers with access to digital terrestrial television (DTT). Telenor also offers TV services through privately owned satellite master antenna TV networks (SMATV), which serve multiple dwellings such as housing associations and antenna unions.

Telenor's wholly owned subsidiary Canal Digital is the leading TV content distributor in the Nordic region, offering a wide range of national and international TV channels to households that rely on DTH, cable, DTT or SMATV for their reception of television services.

International activities and markets

Approximately half of Telenor's employees work outside Norway.

Bangladesh

Telenor owns 62% of GrameenPhone, Bangladesh's largest mobile telephone company followed by Banglalink. As of January 2008, GrameenPhone has 18 million subscribers.

Denmark

In Denmark Telenor owns the following companies: Sonofon which is Denmark's second largest provider of mobile telephony with 1.8 million subscribers. Cybercity which provides IP telephony and broadband and has 280.000 customers. Tele2 which provides telephony and internet. CBB Mobil which provides low cost prepaid mobile telephony.

In 2009 Sonofon, Cybercity and Tele2 will be unified under one international brand - Telenor.

Furthermore the digital distributor of TV-channels Canal Digital owned by Telenor is also present in Denmark.

Finland

Telenor's operations in Finland are fixed datacom and Canal Digital.

Hungary

Pannon is Telenor's fully owned subsidiary in Hungary. The company offers mobile telephony, has 3 million subscribers and a marked share of 33%.

Malaysia

DiGi is Malaysia's third largest mobile telephony company, and Telenor owns 49% of the company.

Montenegro

ProMonte is Telenor's subsidiary in Montenegro and offers mobile telephony.

Pakistan

Telenor Pakistan is a wholly owned subsidiary that started operations on the 15th of March 2005 and holds one of six mobile licences in Pakistan. It's also the fastest growing cellular network of Pakistan - this may be attributed to the utterly insane marketing and advertising campaign hatched by the top brass at Telenor to ensure their logo is plastered on almost every single wall in every city, village and backwater shanty town in the country. Currently, Telenor holds the second largest GSM and the largest GPRS and EDGE coverage in Pakistan with the recent launch of its nationwide EDGE-enabled network. It has achieved the second largest retailer network in Pakistan within the 2 years span of its operations and has started operations in northern areas of Pakistan and in Pakistan Occupied Kashmir. Telenor had reached its breakeven in the first quarter of 2007. Telenor proactively participated in the earthquake disaster relief, and carried out a campaign for the welfare of flood victims in Balochistan. The current CEO of Telenor Pakistan is Jon Eddy Abdullah.

Russia and CIS

Russia's second largest mobile telephone company is VimpelCom, which Telenor owns about a third of. VimpelCom also operates in Kazakhstan, Tajikistan, Ukraine, Uzbekistan and Georgia. The company is listed on New York Stock Exchange.

Serbia

Telenor owns 100% of Telenor Serbia, one of the three mobile vendors in Serbia and has a customer base of around 2.99 million. It is second mobile operator in the Serbian market.

Sweden

Telenor owns a number of different companies in Sweden. Telenor Sverige AB is the result of Telenor's purchase of Vodafone Sweden in 2005, offering mobile telephone services with a market share of approximately 15%. Telenor also owns Bredbandsbolaget, Sweden's second largest provider of broadband and the largest provider of IP telephony. Canal Digital offers TV distribution as well.

Thailand

Telenor holds an indirect position in DTAC, a mobile telephony company in Thailand. DTAC currently has about 14 million users which put DTAC as the second-largest mobile operator in the Thai market.

Probable strategy

The company started commercial operations in Pakistan on 14 March 2005. It will continue its focus on mobile operations in Scandinavia, Eastern Europe and Asia, become the largest provider of TV and Broadband to customers in Scandinavia, and sell non-core assets outside this scope.

Generally, the company's strong growth has derived from focusing on mobile communication in low-income, but fast-growing markets. These potentials being fulfilled, new incomes could come from either new market entries, or increased revenues from more services in existing emerging markets, from both mobile and broadband services.

Telenor is currently taking part in a race to acquire a sixth mobile operator in Vietnam, in competition with other global telco's, among them Vimpelcom. Telenor announced to the business newsparer Dagens Naeringsliv last winter that they are looking at possible prospects for mobile operations in Africa.

Criticism

Norwegian Internet Exchange

In June 2007 Telenor announced that it would withdraw from the Norwegian Internet Exchange (NIX). It would allow other internet service providers to connect to Telenor's own exchange point, but wants to be able to charge content providers, like NRK or Schibsted, for prioritised access to their network. The Norwegian Post and Telecommunications Authority stated they would look at the legality of this move, but concluded that the withdrawal from NIX would not negatively affect the Norwegian Internet infrastructure. This raised demands that the network division be demerged from Telenor and made a separate company. Critics feel that this move compromises the network neutrality of Norway, especially since Telenor has a 57% market share domestically. Telenor chose not to fulfill their threats, and continue to connect to NIX through a ten gigabit ethernet connection.

Grameen Bank gentlemen's agreement

After Muhammad Yunus was awarded the Nobel Peace Prize in 2006, he claimed during his visit in Norway to receive the prize that Grameen Bank had a gentlemen's agreement with Telenor where Telenor was to sell part of GrameenPhone to the bank. Telenor was not interested in fulfilling this agreement, arguing it was not juridically binding.

Illegal VoIP Operations

Telenor's subsidiary Grameenphone was fined multiple times and later sued because they participated in illegal VOIP operations. VOIP operations went against the BTRC's (Bangladesh Telecommunication Regulatory Commission ) rules and as a result Grameenphone's offices were also raided in the process. BTRC claimed that the regulator and government was denied large revenue which Telenor/Grameenphone earned through these activities. Shortly after, Grameenphone's profits fell 32% when BTRC forced Grameenphone to cease VOIP operations.

Telenor has advertised itself as being the largest tax payer in Bangladesh. Now it is known that they evaded taxes through these clandestine operations.

Use of child labor and hazardous working conditions

A Danish TV documentary has revealed miserable working conditions and environmental violations at companies in Bangladesh that act as suppliers to GrameenPhone. Employees were shown working with hazardous chemicals and heavy metals virtually without protection. Workers were as young as 13 years, a clear violation of child labour laws. The firms were caught allowing polluted waste water to spill into nearby rice fields. And in one case, a worker was killed when he fell into an unsecured pool of acid.

Telenor, believing that the best defense is a good offense, opted to reveal some of the findings of the documentary even before it was aired.

Addressing unacceptable working conditions in Bangladesh: http://www.telenor.com/working-conditions-in-Bangladesh/

Muhammad Yunus is considering taking legal action against Telenor

Nobel Peace Prize recipient and co-owner of Grameenphone, Muhammad Yunus, is currently considering taking legal action against Telenor, for the company's failure to stamp out the use of child labour by its subcontractors in Bangladesh.In a press release published on September 4th, 2008, Yunus wrote that:

-Neither I nor Grameenphone can accept this conduct. Twice the authorities in Bangladesh have found the company not to be in compliance with the current legislation of the country.

Telenor's CEO, Jon Fredrik Baksaas, has promised to look into the matter.

See also

References

External links

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