Swedish Standoff

9:00 AM -- An interesting development in Sweden today as incumbent Telia Company announced the creation of a "new fully-owned telecom infrastructure subsidiary" to manage its "copper and fibre networks and multiplexing."

At first glance this might look like the carrier has bought into the idea of "structural separation," a concept pioneered by BT Group plc (NYSE: BT; London: BTA) with the creation of its Openreach business unit, and favored by Swedish regulator National Post and Telecom Agency (PTS) . (See Telcos Consider the Splits and BT Opens Up Access.)

But TeliaSonera doesn't want to go as far as BT and has formed its new subsidiary in the hope that the competitive equality and management transparency it claims this move will provide will appease the regulator.

"TeliaSonera relies on the market forces and opposes the proposal of the Swedish National Post and Telecom Agency PTS for an act of so-called functional separation. The problems of the broadband market are not the kind that require such far-reaching legislative action," notes the carrier in its press release.

And here's the key point: "TeliaSonera wants to continue to invest in the Swedish telecommunications infrastructure, but TeliaSonera must also be able to manage these investments within the scope of the requirement for equal treatment."

The message, then, is quite clear: If Sweden wants its national operator to invest in cutting-edge network technology, then TeliaSonera should be left to do things its own way, and not be forced into a restructuring program it doesn't want.

This is a standoff worth watching, as it could set a precedent for other European markets.

— Ray Le Maistre, International News Editor, Light Reading