Sonera focuses on domestic operations

The Finnish telecommunication company Sonera has adopted a new strategy: It will now concentrate on domestic operations, and the expenditure of the services business will be sharply reduced, the company says.

As part of the new strategy Sonera will limit future financial exposure to 3G (third generation) telecommunication investments. Sonera has said it will not inject more money into Group 3G, its German 3G consortium. According to Sonera, the investments in IPSE 2000, an Italian 3G consortium, and Xfera, a Spanish 3G consortium, will also be limited to the minimum allowable.

Sonera is also trying to reduce its EBITDA (earnings before interest, taxation, depreciation and amortization) losses in its new services business to a maximum of 40 million euros (US$36 million) in 2002. In 2003 company hopes to reach breakeven.

The new strategy concentrates on the debt load as well. The remaining 38.6 million Deutsche Telekom AG shares the company holds will be disposed of when the market conditions are considered good enough. The company is also evaluating the potential sale of certain minority interests in operators outside of Finland.

Sonera has also decided to raise approximately 1 billion euros through a rights offering to its shareholders. The Finnish government will subscribe 53 percent of the offered shares.

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