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Orange to exit from Sweden

December 23, 2002

Orange SA announced its intention to withdraw from the Swedish market in direct response to the pressures placed upon it by the UMTS licence requirements and current market conditions.

In line with this, Orange will significantly reduce the size of its operation with a redundancy programme affecting its remaining 243 staff.

The FT reported Orange may have to face a heavy penalty of €100 million from the Swedish government for the withdraw.

The announcement has good and bad implications for the other operators in Sweden. Orange, Vodafone and Hi3G are partners in the 3G Infrastructure Services AB venture, which deals with building a countrywide 3G infrastructure. The exit of Orange means the other two needs to increase more investment in the joint venture.

On the other hand, if no other group step-in to take over Orange's 3G operation, the 3 remaining operators will get a bigger share of the Swedish market.

Last month, the Swedish National Post and Telecom Agency (PTS) rejected Orange's application to delay a nationwide 3G rollout until 2006 instead of 2003. Orange blamed the slowness of granting building permits for radio masks and lack of suitable 3G handsets but the PTS considered these were insufficient reasons to change the terms of conditions.

Orange said it will continue to explore all options to secure the future of its Swedish operation.

 


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