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Telenor eyes NOK2 billion revenue for merged unit

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Telenor Digital AS (TD) and Telenor Global Services AS (TGS) are to merge in a deal that Telenor said would "leverage the best of both organisations to create a solid foundation for growth".

Telenor said it expects its new business – due to launch in June – to generate revenues of NOK2 billion. The headquarters will be at Fornebu, with offices in Sweden, Poland, Dubai, Pakistan, Thailand, Singapore and Norway.

It will report to Group Holdings with Ove Fredheim chairing its board and, with 190 team members, it is expected to play "a key role" in Telenor's Beyond Connectivity agenda.

Stig Atle Waagbø, who has held the title of CEO of Telenor Digital since November 2019, has been named CEO of the new company.

He said: “This merger is a truly progressive move, with opportunities to create new revenue streams in Telenor. The new company must continue to keep relentless focus on operations and serving our business units, while at the same adopt a challenger mind-set, focus on value creation, and dare to explore new business models and services”.

The new business will remain fully owned by the group and will operate as a single global unit.

Individually, TD and TGS offered a broad set of products and services, serving as a gateway to the Telenor Mobile Operators. Prior to this news, TGS operated and delivered core telco services such as international voice, messaging, and data roaming for Telenor. TD on the other hand was a pure software company, developing cloud-native solutions connecting mobile operators and digital service providers, globally.

Telenor said that "together, the new company will leverage the best of both organisations to create a solid foundation for growth".

The aim of the merger is to create new revenue streams after a turbulent two years for Telenor.

In Myanmar, in January of this year Telenor sold its 51% stake in mobile money business Wave Money to Yoma Strategic Holdings. It raised $53 million from the deal, which followed a failed stake sale to Ant Group in 2020, itself was set to raise $76.5 million.

However, the 2021 coup d'état in Myanmar saw Telenor write off its business in the country, which created a net loss of US$468 million in Q1 financial results last year, confirming how the Myanmar business impacted the financials of the entire group. That business has since been cleared for sale to M1 Group, following approval from the Myanmar Investment Commission in March of this year. Last year Telenor put its official losses on this business at $782 million.

However, The month prior to the Myanmar sale Telenor signed a multi-billion-dollar deal with Axiata to create Celcom Digi in Malaysia.

Telenor said it had it returned to growth in its latest financial results, following the sale of several tower businesses in Sweden, Finland and Norway.

After publication on Monday 11 April, Telenor provided the following information to Capacity: "Telenor’s wholesale business will continue, and we believe this merger is necessary to position Telenor for the future. This change is expected to further accelerate the digitalisation of Telenor’s wholesale operations, which will benefit both our customers and partners."