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Press Release


Sonera, Telefónica and Industri Kapital jointly apply for UMTS licence

Press Releases

Sonera, Telefónica and Industri Kapital have made an application today for one of the four Swedish licences for third generation mobile telephony, UMTS. The application was made through the company, Reach Out Mobile AB, in which Sonera owns 45%, Industri Kapital 35% and Telefónica 20%. In addition to the UMTS licence, Reach Out Mobile is also applying for a GSM licence.

“Our objective is to make Reach Out Mobile the leading UMTS operator in Sweden. Our consortium is a combination of the experience and expertise of world-leading mobile operators with a unique network of partnerships. Through our application, the entire Swedish population will already have access to UMTS services by 2003”, commented Pirjo Kekäläinen-Torvinen, Head of Sonera’s international UMTS operations.

Full coverage – First in Europe: Reach Out Mobile can guarantee full coverage for Sweden’s 8.86 million inhabitants by 31 December 2003, at the latest, which gives the maximum amount of points according to the PTS system of calculation. The service will be rolled out equally rapidly in rural and urban areas, with the aid of more than 60 partnership arrangements with, for example, energy companies and small local municipalities. In July next year, Reach Out Mobile intends to launch Europe’s first UMTS network in Västerås (pending granting of permission). Sonera and Reach Out Mobile further intend to establish a development centre for 3G in Stockholm.

Rapid and low environmental impact roll-out: Reach Out Mobile co-operates with, for example, Sydkraft, a large number of local energy companies, Banverket, Svenska Kraftnät and more than 50 local municipalities. This means that Reach Out Mobile already has access to 60,000 possible locations for UMTS base stations. These include radio masts, electricity pylons and high buildings. The co-operation arrangements will also provide immediate access to a nationwide network of installation personnel and a comprehensive fibre-optic network.

“Our unique network of partnerships means that vital infrastructural elements are already in place. This means that we can quickly and cost-efficiently roll out our network with the least possible environmental impact. This provides the consumers with lower prices. Reach Out Mobile will invest more than SEK 15 billion in total in infrastructure and marketing,” said Harald Mix from Industri Kapital.

Open network for all: Reach Out Mobile will build an open, flexible and advanced environment for our partners. As an example, the consortium has already chosen to avoid exclusive agreements with content providers in order to secure the largest possible variety of actors. The infrastructure and common platforms (customer handling systems, invoicing systems, security etc.) will give everyone, both customers and service providers, an opportunity to come onto the network quickly. In this connection, price structures will vary according to customer requirements – a flat rate for those who wish as well as low price solutions for the consumer market.

If Reach Out Mobile is allocated a licence, the consortium also intends to invite other interested actors to participate in various ways in the network.

“Sonera is well-known for its partnership, transparency and competitive prices”, commented Pirjo Kekäläinen-Torvinen. “Our ambition is therefore to offer unique customer value to all Swedish households and companies”.

Reach Out Mobile has already set up co-operation with 11 marketing partners, which have a total of 8.5 million consumer customers and 500,000 corporate customers. These partners include KF and Sydkraft, who, together with Reach Out Mobile, will be able offer new services to their customers.

“This new technology provides solutions that will make it possible for KF to develop our relations with our 3.2 million card customers and members. Through our co-operation with Reach Out Mobile, we can offer exciting new services and improve communications with our customers,” said Erik Olsson, deputy CEO for KF.

Bengt Ekenstierna, CEO for Sydkraft Bredband, said, “We have an infrastructure throughout southern Sweden that makes rapid roll-out of base stations possible. UMTS fits in very well with our broadband operations. In addition, we have an operations and maintenance organisation with good coverage throughout the country.”

Neither KF nor Sydkraft have any financial commitments in this project.

Through its partnership with more than 50 small local municipalities, many of them in rural areas, Reach Out Mobile has established a model for rapid roll-out both in sparsely populated and urban areas.

“Anders Agnemar, Chairman of SmåKom, commented, “We feel that it is very positive that Reach Out Mobile can give people and companies in sparsely populated areas the same access to broadband as those in cities. This has great significance for small local municipalities and creates opportunities for development of local commerce. This unique co-operation and rapid roll-out will lead to increased economic growth in small rural areas. SmåKom is a network for more than one hundred of the smallest local municipalities in Sweden.”

World-leading operators – Financial strength: Telefónica and Sonera constitute together a strong competence base for Reach Out Mobile, with world-class experience. They are technological leaders in many areas, are established on many markets with differentiated services, and have already obtained several other UMTS licences. Telefónica and Sonera are the largest and second largest companies in Spain and Finland respectively, in terms of market value.

In addition to this application, Telefónica and Sonera also intend to apply together for UMTS licences in Italy and Switzerland.

For further information:

Pirjo Kekäläinen-Torvinen, Senior Vice President, Sonera International Mobile, +358 204 063 613
Javier Garcia, Press Relations, Telefónica, + 34 630 004 607
Harald Mix, Deputy CEO, Industri Kapital, +46 8 678 9503
Erik Olsson, Deputy CEO, KF, mobile + 46 706 43 2240
Bengt Ekenstierna, CEO Sydkraft Bredband, mobile + 46 705 356150
Anders Agnemar, Chairman of SmåKom, Opposition councillor, Vadstena,
mobile + 46 70 5477333

About Industri Kapital

Industri Kapital is the leading Nordic investment fund, with majority holdings in companies with an aggregate turnover of SEK 70 billion and a combined 50,000 employees. Approximately half of all its investments are made in companies in the trading and services sectors. Industri Kapital’s latest acquisition was Alfa Laval. Examples of other acquisitions are Intrum Justitia, Oriflame, Ellos and Lindex. Industri Kapital manages more than SEK 20 billion, of which a large proportion comes from pension foundations and funds. Among the largest investors in Industri Kapital are Länförsäkringar, Orkla, Merita Nordbanken, Robur and SEB Fonder.

About Sonera

Sonera is a leading international mobile operator. Based in Finland, it has more than 10 million subscribers in 11 countries. Sonera has a strong focus on research and development and is recognised as one of the most innovative mobile operators in the world. The company has invested SEK 10 billion in Sweden this year in two cutting edge mobile applications companies, Across Wireless and iD2. Sonera’s innovation can be seen in its mobile portals, Sonera Zed and Sonera Smart Trust (mobile payment solutions). Sonera has obtained UMTS licences in Finland, in Spain through the Xfera consortium and in Germany with Telefónica.

About Telefónica

Telefónica is the leading mobile operator in the Spanish and Portugese speaking areas of the world, with 21 million subscribers, of whom 10.2 million are in Spain. The company’s subsidiary, Terra, is one of Europe’s leading Internet service providers. Telefónica has a UMTS licence in Spain, and has a joint licence with Sonera in Germany. Through massive investment since 1997, Telefónica has focussed heavily on multimedia and content, including through acquisitions of Lycos, Endemol and Iobox.

About Reach Out Mobile

Reach Out Mobile will co-operate with Sydkraft, Göteborg Energi, Mälarenergi, Tekniska Verken in Linköping, Lunds Energi, Borås Energi, Umeå Energi, Borlänge Energi, Svenska Kraftnät, Banverket and more than 50 local municipalities. This co-operation provides access to 60,000 possible sites for UMTS base stations at radio masts, electricity pylons and high buildings, as well as fibre-optic networks and a nationwide network of installation personnel.

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