The companies said they have not been able to agree with the European Commission on acceptable conditions to go ahead with their plan.
Competition commissioner Margrethe Vestager — who is Danish — is believed to have been concerned that the deal would reduce the number of operators in Denmark from four to three — the other two being incumbent operator TDC and Hutchison’s Three.
Robert Andersson, TeliaSonera’s head of Europe, said: “Since the beginning, we have been strong advocates for the need to increase investment levels in Denmark. In our view, creating a market player with the scale and ability to compete and invest would ensure that customers and businesses would benefit from better quality, speed and coverage.”
Telenor’s European head, Kjell Morten Johnsen, said: “In the interests of both companies, we felt it necessary to act decisively. TeliaSonera and Telenor will continue to compete and deliver products and services in the Danish market through our respective original, and still fully up-and-running Danish operations.”
The companies said that “the new joint venture would have created a mobile operator that would be able to increase investments in networks and technology, to the benefit of the Danish customers”.
The decision to withdraw has clearly come as a shock to the two companies. Only a few weeks ago they announced that Hilde Tonne of Telenor would be the head of the now abandoned joint venture.
But the EC’s determination to hold firm to its conditions — which are still not known — means other European companies will be worrying about projected mergers, including Hutchison’s bid to buy O2 UK from Telefónica to merge with its Three UK, as well as VimpelCom’s plan to merge Wind Italy with Hutchison’s Three Italy.
