UPDATE 2-TeliaSonera eyes fresh start with Vodacom exec as new CEO

Sun Jun 16, 2013 3:52pm EDT

* Swede Johan Dennelind to become new Telia CEO

* Has strong emerging markets experience

* CEO needs to restore image, bolster growth (Adds Telia confirmation, quotes)

By Simon Johnson and Olof Swahnberg

STOCKHOLM, June 16 (Reuters) - Nordic telecom operator TeliaSonera said on Sunday it had picked Johan Dennelind, the current chief executive of South Africa's Vodacom International, as its new CEO.

TeliaSonera's confirmation of the appointment came hours after Reuters reported Dennelind, who was not among those most widely tipped as new CEO, had got the job, citing a source with knowledge of the recruitment process.

With the selection of Dennelind the group is going for a boss with solid experience in emerging markets, regions that have been the main source of growth for Telia in recent years but where its business practices have also come under fire.

Telia, 37 percent owned by the Swedish government and Europe's sixth-biggest operator by market value, has been headed by its CFO since former CEO Lars Nyberg resigned in February.

His move followed an internal probe criticising the company for failing in due diligence when it bought a 3G license in Uzbekistan in 2007.

Swedish prosecutors have launched a preliminary investigation into allegations of corruption associated with the deal and have served two Telia executives with notice they are suspects. Telia has denied any wrongdoing.

Dennelind is relatively unknown in Sweden and was not among the names widely tipped as in line for the top job at Telia, but he does offer extensive international telecoms experience as well as a strong Nordic background.

He is currently chief executive of Vodacom's international business and prior to that was CEO of Malaysia's No. 3 mobile operator, Digi Telecommunications, 49 percent owned by Norway's Telenor.

A Swede, Dennelind was CFO and deputy CEO at Telenor Sweden but started his management career in the early 1990s with Telia.

At the end of last year, he was appointed CEO of Malaysia's top mobile company, Maxis and was due to start the job in July, but the company said only weeks ago he would not be taking up that position.

FRESH START

TeliaSonera Chairman Marie Ehrling said in a statement Dennelind, who starts his new job in September, represented a "fresh start" for the group and pointed to his ability to lead organisations through "significant change processes."

Known as an innovator and a consensus builder, he will need to restore TeliaSonera's image after its dealings in Uzbekistan as well as facing a long list if other challenges.

Bengt Nordstrom, head of telecom consultancy Northstream, noted it was the first time since Telia's merger with Finland's Sonera in 2002 that the group had picked as CEO someone with past experience from operators, adding Dennelind brought along "a good reputation".

Relations between unions and top management broke down under Nyberg and the company has seen revenue stagnate since 2008. It is currently in the middle of a 2 billion Swedish crown ($300 million) cost cutting program.

"I am very proud to have been given this vote of confidence from the Board of Directors and I am excited about and humble towards this new challenge," Dennelind said.

Dennelind will need to find ways to restore growth amid a decline in traditional voice-based telephony and surging Internet-based data services for smartphones and tablets, something it and rivals in Europe have struggled with.

One option is to renew an acquisition program that has taken Telia to countries such as Azerbaijan and Nepal in recent years. With 26 billion crowns in cash it has the muscle, but the question is if the trouble in Uzbekistan has given it cold feet. (Editing by Niklas Pollard, Jason Neely and Vicki Allen)

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