TeliaSonera's plans in Spain push down company's share price
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The share prices of the telecommunications service provider TeliaSonera declined on Thursday after the announcements of planned movile communications operations in Spain.
Jari Honko, an analyst at EQ Bank, says that there are suspicions on the market about the possibilities of TeliaSonera to engage in profitable business in Spain. Honko believes that investors would have preferred that the company invest more in Eastern Europe.
TeliaSonera announced that it had increased its holding in the Spanish operator Xfera Movil to 76.6 percent from its previous 16.6 percent.
"I believe that TeliaSonera does not have much brand recognition in Spain, and that the Xfera brand is not very significant", Honko said.
Honko believes that TeliaSonera's decision could have been influenced by Xfera's investment commitments, which would have brought extra expenses if TeliaSonera had given up its 3G operating licence.
TeliaSonera CEO Anders Igel defended the decision to start mobile communications in Spain.
"This is a very good opportunity", Igel insisted.
As for the impact of the investment on the company's bottom line, Igel insisted that the deal will not affect TeliaSonera's ability to pay out dividends.
The share price plunged on Thursday, dipping at one point to seven percent below the previous day's closing.
Helsingin Sanomat
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| 16.6.2006 - TODAY |
 TeliaSonera's plans in Spain push down company's share price |
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