TeliaSonera Sees Fixed-Line Phones Gone In 10 Years

STOCKHOLM -(Dow Jones)- Swedish telecommunications operator TeliaSonera sees traditional fixed-line telephony disappearing almost completely over the next 10 years, said TeliaSonera's Chief Executive Anders Igel at a conference in Stockholm Tuesday.

Igel also said the company is making changes to capture growth opportunities in other services such as mobile and broadband Internet instead.

According to Igel, there is already a quick downward trend in usage of fixed-line telephones, but more is to come.

"We have decided to try to make this trend accelerate," Igel said.

Fixed-line telephony is still a large revenue contributor to TeliaSonera and other incumbent telecom operators in Europe.

In TeliaSonera's domestic market, total revenue from fixed-line telephony was SEK10.2 billion ($1.5 billion) in the first six months of 2006, according to a study published by the national telecom regulator in Sweden on Tuesday.

Comparable figures for mobile telephony were SEK8.2 billion and for Internet services SEK4.3 billion.

Igel sees four major growth areas for the company going forward.

In the Nordic markets some growth will come from moving voice traffic to mobile telephony from the fixed line. More important however are mobile data services such as mobile TV, wireless e-mail and others.

In addition, Igel sees continued growth in fixed-line broadband Internet services.

"The perhaps most-important service here will be TV (over the Internet), but also voice calls over the Internet," Igel said.

The third growth area is providing large corporate customers with so-called managed services where TeliaSonera takes full or partial responsibility for a company's communications needs.

Igel said the market for such services is worth SEK190 billion in total in the Nordic and Baltic countries combined.

"We have only a 5% market share, and there is good potential," Igel said.

A fourth growth area is adding more subscribers in some operations TeliaSonera has in eastern Europe and Asia.

To capture the growth, TeliaSonera will implement a new organization from Jan. 1 and aims to reach SEK100 billion in annual sales two years later. In 2005, TeliaSonera's sales were SEK87.7 billion.

"It's not for sure we will reach that goal. We have aimed high," Igel said.

To reach the higher revenue, TeliaSonera plans further capital expenditures in its networks.

"I foresee we will speed up the pace when it comes to broadband," Igel said.

However in 2006, capital expenditure as a share of sales will decline compared to 2005.

-By Magnus Hansson, Dow Jones Newswires; +46 8 545 130 91; magnus.hansson@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 28th November 2006