Now Telenor eyes TeliaSonera acquisition

France Télécom is in for a fight if it wants to acquire Swedish-Finnish carrier Teliasonera. Norwegian incumbent Telenor is also interested, according to reports.

Telenor started looking at TeliaSonera a year ago, but the interest from France Télécom has forced Telenor to pick up the pace and it has now hired Nordea and JP Morgan to analyze a possible deal, according to the Swedish newspaper Svenska Dagbladet.

Reports about France Télécom's interest in Teliasonera surfaced about two weeks ago. France Télécom then confirmed it is looking at Teliasonera.

Telenor and Telia have already tried to merge once before, but back in 1999 failed spectacularly. The failure resulted in a merger between Telia and Sonera.

That plans have emerged again doesn't come as a surprise to John Strand, mobile analyst at Strand Consulting. "All carriers that have the resources to acquire Teliasonera, should look at it. First France Télécom announced its interest, now Telenor, and in the upcoming weeks Vodafone, Deutsche Telecom, Telefonica, and maybe a carrier from the Middle East as well, will join" he said.

A bidding war is likely, according to Strand.

A deal between Telenor and TeliaSonera would have many regulatory challenges in Denmark and Sweden, but it would also be easier for Swedish politicians to swallow, according to Strand. The Swedish government owns 37.3 percent of the stock in Teliasonera.

What was true when France Télécom announced its interest in the Swedish incumbent still remains true.

"Because of continued price pressure, scale of business is necessary for operators," Strand said.

The concept of consolidation is valid, but also incredibly complex, according to Mike Cansfield, telecom strategy practice leader at Ovum.

"Just look at the merger between Telia and Sonera, it has had all kinds of problems," said Cansfield.