The Norwegian telecoms company owned by billionaire Len Blavatnik’s Access Industries believes it can buck the negative sentiment in European telecoms with a successful float of the business by the end of the year.
Ice Group, Norway’s third-largest telecoms company, plans to raise NKr3bn (£275m) by floating the company in Oslo. It intends to expand its 4G network to 95 per cent of Norway and prepare for the launch of 5G services.
It would be the first initial public offering in European telecoms since Play Communications in Poland in 2017 and DNA in Finland in 2016.
Other substantial planned listings, notably Telefonica’s UK operator O2, have yet to take place partly because of the poor sentiment towards the sector. The MSCI Europe Telecoms Services ETF has dropped 7.2 per cent in the past year. Play’s shares have halved since its float but DNA’s have doubled, which has given Ice confidence that Nordic sentiment is stronger.
Access Industries owns more than 60 per cent of Ice shares, having bankrolled the transformation of the business from a niche mobile broadband player into a fully-fledged mobile phone company in Norway. Other investors include Goldman Sachs and shipping and real estate company Rasmussengruppen.
The company came to prominence in 2014 when it launched a stealth bid for 4G frequencies in the Norwegian market. It set up a secret company called Telecom Data to ambush the three established networks Telenor, Telia and Tele2. Access Industries transferred money for the bid in small tranches to the bid vehicle.
Eivind Helgaker, chief executive of Ice, used his wife’s phone during planning. “We were so paranoid,” he said. Ice won the largest pot of spectrum with a NKr740m bid and knocked out existing player Tele2, which was forced to exit Norway.
Ice revenues for the first nine months of 2018 — a 30 per cent increase
Mr Helgaker, who previously worked at Tele2, said he was called “Judas” after the auction.
Ice has since built a 7.4 per cent market share but is targeting 20 per cent within three to five years as it expands its network using the IPO funds.
The company has sold or divested its assets in Brazil, Indonesia and the Philippines in the run-up to the listing to increase its appeal to wary telecoms investors.
Henning Karlsrud, chief financial officer of Ice, said the Norwegian market was a “safe haven”, having grown by almost 4 per cent a year in the past four years while most larger European markets have been declining.
Ice revenues for the first nine months of 2018 were NKr1.2bn — a 30 per cent rise — making it one of Europe’s few growth companies in telecoms. A 41 per cent rise in subscribers in 2017 meant it was the fastest-growing mobile phone company in Europe that year, a crown it has since lost to Iliad in Italy.
Ice stands apart from other “challenger” brands across Europe’s telecoms landscape as it is a new entrant, not a merged entity such as Wind Tre in Italy or Telefónica Deutschland in Germany, and has not kicked off an aggressive price war like Iliad in France and Italy. “It has never been about red balloons and cheap, cheap, cheap,” said Mr Helgaker.
The Norwegian telecoms market is an unusual playing field for Mr Blavatnik who made his fortune in natural resources and has invested in entertainment assets including Warner Music, French music streaming company Deezer and sports rights group Perform over the past decade. Access will retain a significant stake in Ice post the flotation.
UBS and DNB Markets are acting as joint bookrunners on the float.
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