Merger shakes up Swiss telecom sector

Henning Dyremose, Tele Danmark chief, revealing the merger plans between Sunrise and diAx Keystone

In a series of deals worth more than SFr3.5 billion ($2 billion), the Danish operator, Tele Danmark, is set to become the second biggest player in Switzerland's telecommunications sector.

The deals agreed by Tele Danmark, which is 42 per cent owned by the US giant, SBC Communications, led to the postponement of the auction of Switzerland’s third generation mobile phone licences.

Tele Danmark is to raise its stake in Sunrise Communications to 89 per cent by buying British Telecom’s entire share in the company as well as part of the holdings owned by the Swiss Federal Railways and UBS.

It is also acquiring 70 per cent of Swiss mobile and fixed line operator, diAx , by buying SBC’s 40 per cent stake in the company and up to half the shares currently owned by diAx Holding. DiAx will then be merged with Sunrise.

The deals value the equity capital of the new company at SFr5.4 billion. Tele Danmark will own 78.8 per cent of the enterprise.

In a statement, Tele Danmark said the Swiss Telecoms market was “one of the most attractive and developed in Europe”. It said fixed line penetration was 69 per cent, household Internet penetration 23 per cent and mobile phone penetration 61 per cent.

It said the merger of Sunrise and diAx would create an operator with an estimated 22 per cent market share in the fixed line market, 15 per cent in the mobile phone sector and 36 per cent in Internet subscriptions.

swissinfo with agencies