Tele2 Positioned to Close a Good 2021

After divesting its Kazakh and Dutch operations, Tele2 is focusing on its main market, Sweden, where we think it has successfully strengthened its strategic position. First, its acquisition of TDC Sweden, a leading B2B services provider for both public sector and Swedish blue-chip firms, at the end of 2016 significantly improved its enterprise business. Second, with the acquisition of Com Hem, the largest cable TV operator in Sweden, Tele2 has embraced the fixed-mobile convergence. The firm can now bundle consumer services into dual-, triple-, or quadruple-play offerings (fixed and mobile telephony, broadband, and TV). With these new offerings, Tele2 can effectively compete with its main rival, Telia, in a multi-play telecom environment where pure mobile players might struggle. The strategic move to own a fixed network pleases us since the fixed services are inherently stickier products.