TeliaSonera takes $61 million hit on Nepal Satellite disposal

Scandinavia’s TeliaSonera has taken a SEK0.4 billion ($61 million) hit on the sale of its 57% stake in Nepal Satellite to Zhodar Investment, blaming legal and regulatory challenges for its exit.

The operator had built up its stake in the Nepalese operator through a series of acquisitions in 2011 and 2012, hoping to strengthen its operations with a “complementary brand”.

TeliaSonera (Stockholm, Sweden) already owned a Nepalese mobile operator called Ncell, which it bought in 2008, and says it will be free to concentrate on that business following the Nepal Satellite sale.

Scandinavia’s TeliaSonera has taken a SEK0.4 billion ($61 million) hit on the sale of its 57% stake in Nepal Satellite to Zhodar Investment, blaming legal and regulatory challenges for its exit.

The operator had built up its stake in the Nepalese operator through a series of acquisitions in 2011 and 2012, hoping to strengthen its operations with a “complementary brand”.

TeliaSonera (Stockholm, Sweden) already owned a Nepalese mobile operator called Ncell, which it bought in 2008, and says it will be free to concentrate on that business following the Nepal Satellite sale.

Elaborating on the difficulties it has faced regarding Nepal Satellite, TeliaSonera said that over the past 12 months “uncertainty regarding the regulatory and legal environment for consolidation and granting of licenses in Nepal has increased”.

“Pursuing an acquisition of Nepal Satellite is therefore not considered possible for regulatory reasons,” the operator added in a statement.

Despite the SEK0.4 billion loss, the divestment seems unlikely to have much impact on TeliaSonera’s consolidated financial statements following deconsolidation because Nepal Satellite’s operations remain very limited.

In contrast, Ncell is Nepal’s largest mobile operator, serving about 10 million customers and reporting revenues of SEK2.7 billion last year.

TeliaSonera reported net income of SEK5.1 billion for the three months ending June, 13.5% less than in the same period of 2012, and flagged a 3.9% drop in revenues over the same period, to SEK26.3 billion.

Although operations in developed markets continued to wrestle with competition and regulation, Ncell grew its sales by 25.1% in the quarter, to SEK809 million.

Per-Arne Blomquist, TeliaSonera’s chief executive, attributed organic growth in the Eurasia region to the demand for data services as well as addition of new mobile customers.

TeliaSonera expects to close the Nepal Satellite transaction within the next month.