TeliaSonera restructures to improve customer focus, transparency

Scandinavian operator TeliaSonera has unveiled details of a restructuring aimed at improving its focus on customers and making it a more transparent organization from a corporate-governance perspective.

As a result of the new structure, TeliaSonera (Stockholm, Sweden) will split operations into three geographical divisions addressing needs in Europe, Eurasia and Sweden, its domestic market.

“The countries will be the leading dimension in this new operating model, which is where we interact with the customers,” said Johan Dennelind, TeliaSonera’s chief executive. “We remove the business area layer from the existing organization.”

“Instead we strengthen the local operations and the mandate for Group functions to drive strategic questions and improve governance,” he added. “We believe this model will enable us to offer our customers a better service at the same time as it clarifies accountability for our performance.”

TeliaSonera said it would provide financial reports according to the new structure from the second quarter of 2014, and that it would begin appointing heads of the new key functions between now and April 1 2014, as well as adapting processes and supporting systems.

The operator quickly followed up its restructuring announcement by indicating it would set up a new group executive management team comprising 12 members with a mix of “international experience and relevant industry background”.

A number of appointments have already been confirmed, with Malin Frenning – currently head of broadband services – set to become executive vice president with responsibility for Sweden, and Robert Andersson, currently head of Finland, taking charge of the Europe division.

Meanwhile, Erik Hallberg will quit his role as president of TeliaSonera International Carrier to lead the Sweden division.

News of the restructuring and appointments follows TeliaSonera’s announcement in late November that four of its senior employees would leave the company in connection with the scandal over its business conduct in Uzbekistan – where it owns 94% of Ucell, the country’s second-biggest operator – which prompted the resignation of former chief executive Lars Nyberg in February.

“Together with the Board I have come to the conclusion that the way some transactions in the past were managed does not live up to the high standards of business ethics and transparency that TeliaSonera wants to stand for,” said Dennelind in announcing the November departures.

Earlier this year, the operator had hired Swedish law firm Mannheimer Swartling to conduct a review of its business practices in Uzbekistan after facing allegations it had been involved in bribery and money laundering during its $315 million acquisition of a 3G license, frequencies and number blocks in 2007.

Although Mannheimer Swartling found no evidence of money laundering or bribery, it was highly critical of corporate governance procedures within TeliaSonera.

Clearly, the latest restructuring is aimed partly at addressing these shortcomings and restoring investor confidence in the business.