Internationalization of the Swedish Telecom Services Market

This chapter surveys the internationalization of the Swedish telecom services market according to regulatory developments, growth of market segments, network barriers to entry, foreign entrants, and foreign activities by the domestic companies Telia and Kinnevik. Relevant entries into Sweden are discussed with reference to an earlicr hypothesized model of internationalization of telcos, along with some tentative trends and strategic implications.

Even though voice and data services are growing more slowly in Sweden than in some larger European countries, Sweden attracts the interest of large players partly due to the alleged precursory nature of the liberalized free market, which, in combination with its smallness and advanced nature, makes Sweden attractive for trial-and-error, and partly due to the advancement in the Swedish cellular market – one of the most attractive markets. In addition, the Swedish telecommunication network precludes any major network barriers to entry, since it is fairly well digitized and fiberized. In the last decade, there have been new entries in cellular telecom services, public switching telephony and datacom services by both domestic and foreign players.

The FDls of large telcos, such as Cable & Wireless, Vodafone, Pacific Telesis and France Telecom in Swedish telcos and the FDIs of AT&T, MCI and BT in Swedish offices are also important to note. The initially targeted market segment by these new entrants is the group of large, highly internationalized Swedish MNCs, also an important segment to the incumbent Telia. Traditionally, Telia has had several cooperation activities, concerning technology and networks, with PTTs in the other Nordic countries as well as with European organizations such as CEPT, ETSI, EMO etc. More recently, however, more commercial cooperation activities have been carrried out partly through the Unisource venture with PTT Telecom and the Swiss PTf and partly through FDls, as will the Baltic states. Moreover, Millicom International Cellular, in which Kinnevik has a major stake, has made several FDls in cellular in small developing countries.

Published as Chapter 13 in The Race to European Eminence. Who are the coming Tele-Service Multinationals?