The merger between Nordic telcos Telia and Telenor, expected to be approved by the European Commission this week, is not expected to have a major impact on Telenor’s satellite activities.

"The only real effect we expect it to have to have is to give us access to more capital," said a Telenor Satellite Services spokeswoman. "Telia has very little in the way of satellite activities – it’s not like it will be a major change for us."

The on-off merger between Telenor of Norway and Telia of Sweden seemed finally to be moving in a more positive direction last week when the Swedish government agreed to the sale of Telia’s cable operations, Telia Infomedia, as demanded by the European Commission.

During the early stages of the merger, the issue of whether Telenor should be allowed to keep its satellite division had been raised by Nordic competitor NSAB, which operates the rival Sirius position at 5 degrees East, and TeleDanmark, which has a stake in NSAB. The EC had indicated that the two firms’ control of the chain of TV distribution had to be broken up, and that this could include its satellite interests. It was claimed by NSAB that the combined Telenor/Telia would have 70 per cent of transponder capacity in the Nordic area. However, Telenor countered that this did not include Sirius 3, soon set to return to Swedish hands following its stint under lease to SES.

Now, however, the joint firm will remain committed to satellite. "Satellite has not been a matter of discussion," said a Telenor corporate spokesman. "Competition [in satellite services] will not be changed by the merger. Telia has no satellite business at all." He said that the merger, by giving Telenor Satellite Services access to capital, would help increase competition at a European level, where Telenor sees SES and Eutelsat, rather than NSAB, as its main competitors.

Early responses from the European Commission have indicated that Telia’s decision to sell its cable interests would be sufficient to allow the merger to go through. The latest indications are that this will now happen at the Commission’s meeting on October 13.

Telia’s decision came at the end of a week in which the two sides halted work on their merger until their respective governments had agreed on measure to secure EC approval for the deal.

Nothing has yet been confirmed as to how the sell-off will take place – whether the cable interests of Telia and Telenor will be sold by the joint company or individually. The spokesman did say that preparatory work had already started on how to sell the company.