UPDATE 1-Sweden's Tele2 sells Danish unit to Telenor

Wed May 9, 2007 2:30am EDT

(Adds background, detail)

STOCKHOLM May 9 (Reuters) - Swedish telecom operator Tele2 (TEL2b.ST) said on Wednesday it had agreed to sell its Danish operations to Norway's Telenor (TEL.OL) for about 1.03 billion Swedish crowns ($151.4 million) in cash.

The firm said it had decided that in Denmark "...there is a need for a more infrastructure based approach both when it comes to broadband and mobile services."

"Hence, Tele2 has decided to exit Denmark and continue with the strategy to concentrate its operations to markets with expectations of higher returns."

Tele2 has been conducting a strategic review which had been expected to lead to the sale of some operations.

The sale of Tele2 Denmark includes fixed, broadband and mobile businesses and is expected to be completed by the end of June, pending approval from the Danish competition authorities, Tele2 said in a statement.

"The transaction will have a positive one-time effect on Tele2 of approximately 400-500 million crowns," it said.

Tele2 has its home base in Sweden, but also has operations in Russia, the Baltic States and Southern and Central Europe with controlling interests in mobile operations in 13 countries.

It completed a sale of its French fixed and broadband business in March.

With its home market crowded, Telenor has expanded vigorously abroad in the last few years. It has more than 115 million mobile subscribers worldwide.

Tele2 Denmark had at the end of 2006 75,000 broadband, 206,000 fixed and 227,000 mobile customers, the firm said.

It had revenues of 1.7 billion crowns and earnings before interest, depreciation and amortisation of 68 million crowns.

((Editing by Sue Thomas; Stockholm newsroom; Reuters messaging: anna.ringstrom.reuters.com@reuters.net; Phone: +46 8 700 1134))

($1=6.769 Swedish Crown) Keywords: TELE2 TELENOR/

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