Norway may block TeliaSonera's Tele2 Norway acquisition
OSLO/STOCKHOLM (Reuters) - Norway's competition watchdog may block TeliaSonera's acquisition of Tele2 Norway over fears the deal would lead to higher prices and lower quality by leaving Norway with only two established mobile network operators.
The threat to the 5.1 billion Swedish crown (437.78 million pounds) deal pushed shares in Tele2 almost three percent lower.
It is a particular worry for Tele2 as it could be forced to use other operators' networks, less profitable than running its own network, after it lost a key spectrum auction last year.
"TeliaSonera has proposed measures to the Competition Authority to remedy competition concerns," the watchdog said in a notice. "We have considered these measures and concluded that they are not sufficient."
The Competition's Authority's notice is not a final decision and parties have until Dec. 22 to comment before a final ruling by Jan. 15.
Both operators said they would evaluate the situation and carry on a dialogue with the authority, but Tele2 Chief Executive Mats Granryd said his company was "concerned" about the notice.
"This will potentially jeopardise the creation of a dynamic mobile market in Norway with two strong competitors to the incumbent," he said.
Spokespersons for TeliaSonera and Tele2 both declined to say what remedies had been pledged to facilitate the deal. Tele2 has earlier announced its plan to sell parts of its Norwegian network to competitor Ice which would only take place if the deal was backed by Norwegian authorities.
Tele2 agreed to sell its Norwegian mobile telecoms business to rival TeliaSonera in July.
If the deal went through it would leave Norway with two established mobile network operators -- TeliaSonera and market leader Telenor -- plus new entrant Access Industries, which trumped Tele2 in last year's spectrum auction.
Tele2 shares were down 2.9 percent by 1254 GMT and TeliaSonera shares had fallen 1.1 percent.
(Reporting by Olof Swahnberg and Terje Solsvik; editing by Keith Weir)
