| STOCKHOLM, March 7
STOCKHOLM, March 7 A price war is set to
cast a pall over Sweden's mobile market, a recent bright spot in
a gloomy European telecoms firmament, clipping revenues for
leading operators Tele2, Telia and Telenor
This week "3", 60 percent-owned by Hong Kong-based Hutchison
Whampoa and the rest held by Sweden's Investor
, launched an all-you-can-eat deal offering voice
calls, SMS and internet surfing for 349 Swedish crowns ($51.4) a
month, undercutting rivals' prices.
"I think there is a very, very high risk that Sweden embarks
on a full-blown price war," Thomas Heath, analyst at
Handelsbanken, said on Wednesday.
European telecoms firms such as Vivendi SA, France
Telecom, Telefonica and Telecom Italia
are under strong pressure from a cocktail of
regulatory pressure, bruising competition and network upgrade
But Swedish operators have been enjoying robust growth in
their home market as tech-savvy customers have snapped up
smartphones over the last couple of years, boosting data traffic
Overall revenues for market leader TeliaSonera
rose 2.1 percent in local currencies in 2011, but its Swedish
revenues were up more than 9 percent.
Sales at Tele2, the second biggest mobile
operator, rose 4 percent last year. It said in the fourth
quarter that all the phones it now sells are smartphones.
Swedish mobile revenues at third-ranking Telenor were up
around 10 percent.
"We have had reasonable price stability for nearly three
years, and all the operators have done pretty well over that
period," said a second analyst, who declined to be named.
"This (a price war) will destroy the market."
Heath said the biggest loser would be Tele2, which derives
nearly a third of its core profit from Sweden. Handelsbanken
this week cut its recommendation on the firm to reduce from
"A subscriber who has chosen Tele2 will be willing to go to
'3'. They are competing very much head on for the same
subscribers," he said.
The second analyst said Telia stood to lose more.
"A similar subscription at Telia costs around 600 crowns, so
it is really there that you can ask what they are going to have
to do," he said.
Tele2's shares were up 1 percent at 129.20 crowns at 1332
GMT on Wednesday. Year-to-date, the company has seen its shares
dip around 3.9 percent.
Telia shares, up 0.3 percent on Wednesday, have risen around
1 percent so far in 2012.
The European telecoms index was up 0.2 percent on
Wednesday, but has dropped 3.7 percent since the start of the
Neither Telia nor Tele 2 could immediately be reached for