Telia IC refocuses, cuts staff by 50% to 400
23 September 2002 -- Telia is focusing its Telia International Carrier business on wholesale capacity and IP services to large customers over the profitable parts of its European and trans-Atlantic Viking network, involving halving its workforce of 800.
23 September 2002 -- Due to lower expectations on broadband expansion, delay of 3G build-out and insolvencies of carriers, Telia has changed the strategy of its Telia International Carrier business with a restructuring. This follows a review to clarify how it can reach positive cash flow during 2003.
Telia IC will limit its operations to offering wholesale capacity and IP services to large customers over the profitable parts of its wholly owned European and trans-Atlantic Viking network.
It will also continue to run the IP network and to maintain and operate its peering points and relationships in Europe and in the US. The international voice business will be focused on interconnect agreements and bilateral routes.
The restructuring programme includes shut-down of Telia's Asian operation and the national UK voice reseller business and discontinuation of domestic US capacity services. The co-location business will be terminated. The number of commercial points of presence will be reduced. Telia will centralise its resources for sales, finance, administration and customer care to Sweden.
The refocusing means a substantial scale down of the number of offices, technical facilities, operation and maintenance contracts as well as leased lines. The new carrier will be able to conduct global business with less than 50% of the current workforce of about 800 staff.
The restructuring programme will involve provisions of about SEK3.5bn (EUR384m), impacting the results in 2002 (mainly in Q3, including a write down of fixed assets by about SEK6bn, or EUR658m). In 2001 Telia wrote down assets by SEK3bn (EUR330m).
Telia's president and CEO Anders Igel says, "The new strategy enables us to reach profitability and at the same time it gives us the opportunity to capture future market potential. It also makes it viable to turn the business around to positive cash flow during 2003 before the restructuring charges."
Eva Lindqvist, executive vice president of Telia International Carrier, has been appointed the new head of Telia International Carrier Business Area. She replaces Erik Heilborn (also senior VP of Telia AB) who will be appointed to an operational role in connection with the proposed merger between Telia and Sonera.