STOCKHOLM -- TeliaSonera has reached an agreement to increase its ownership in Xfera Moviles S.A. to 80 percent. Xfera owns a nation wide UMTS license in Spain. The initial price paid for the shares acquired is SEK 657 million (EUR 71 million). TeliaSonera will launch mobile operations and plans to roll-out a UMTS network.

TeliaSonera, the leading telecommunications company in the Nordic and Baltic region, has signed and closed an agreement with the other shareholders of Xfera Moviles S.A. to increase its shareholding in Xfera from 16.55 percent to 80 percent. ACS Telefonia Movil, S.L. which is a subsidiary of the Spanish construction company ACS, Activades de Construccion y Servicios, S.A. will remain as a partner and shareholder in Xfera. By acquiring a controlling interest in the company TeliaSonera will launch mobile operations and plans to roll-out a UMTS network, in accordance with the existing license conditions. The license conditions include the right to get GSM national roaming on reasonable conditions.

The initial price paid for the shares acquired is SEK 657 million (EUR 71 million). In addition, an earn-out model has been agreed with the selling shareholders. The total financial investment of Xfera including investments in networks, IP-service platforms, start-up costs, spectrum fees (including accrued spectrum fees from 2002) is estimated for the first five years to be less than SEK 9 billion (EUR 1 billion). In the same time frame, the operation is expected to reach a positive free cash flow.

TeliaSonera has in parallel signed an agreement with the previous shareholder of Xfera, Fomento de Construcciones y Contratas, S.A. (FCC), giving FCC a call option to acquire 3.4 percent of the shares in Xfera from TeliaSonera no later than June 29, 2006, at the same price as TeliaSonera has acquired the shares.

Xfera was awarded a nation wide UMTS license in Spain in March 2000 and TeliaSonera is one of the founding members. During the past years the owners have significantly curtailed Xfera's capital and operating expenditures awaiting the necessary UMTS technology to become commercially available to launch commercial services. In June 2004, the original license conditions were amended by the Spanish Ministry of Industry, Tourism and Commerce.

"We believe that there now are opportunities to make use of Xfera's UMTS license in combination with GSM national roaming. The market conditions in Spain give room for another player. This, together with decreasing vendor prices as well as availability of good quality and reasonably priced 3G terminals, provides us with an opportunity to establish ourselves in a new market" comments Anders Igel, President and CEO of TeliaSonera AB.

Telia Company