The Telecommunications Act entered into force on June 1, 1997. One of the main points of the Act is to improve the possibilities of the telecommunications operators in a sufficient way to lease cable channels. Only the provision of mobile networks remains subject to licence requirements.
Finland is a pioneer in telecommunications market. Our telecommunications legislation has been very non-restrictive and therefore we have been facing some problems while enforcing the new European communities' legislation. However we have been able to maintain flexibility in many regulations while enforcing the legislation in question.
The challenges of the liberating telecommunications markets are met by privatising telecommunications operators. Privatisation is a result of reorganisation and restructuring transpost- and communication services. A good example of the current changes in the telecommunications market in Finland is the privatisation of Sonera Oy (formerly Telecom Finland Oy).
The selling of Sonera Oy's shares
Sonera was a part of governments Telegraph Company and in 1928 it was merged with Finland's Post- and Telegraph Company. In order to enhance competition in telecommunications market, the company's administration was transferred to Ministry of Transport and Communications in 1987. In 1990 Finland's Post- and Telegraph company became state enterprise and January 1, 1994 it was transformed into a limited company, called Suomen PT. Suomen PT's enterprise was divided into three sections, Telecom Finland Oy, Suomen Posti Oy and other subsidiaries and partnership companies. In December 1997 the Parliament of Finland gave the authority to the Council of State to partially and gradually privatise Telecom Finland Oy.
The offering of Sonera Oy's shares was targeted to Finnish and international institutional investors and retail investors in Finland. After the selling of Sonera Oy's shares the government owns 82,5% of the company.
A fact is that the Government of Finland has neither the economical nor political requirements to invest more capital to its companies. A wider range of owners offer more opportunities in telecommunication markets as well as capital to investments. The privatisation strengthens Sonera Oy's ownership and capital structure.
Balance among shareholders gives the right prospective and proper liquidity and development for the value of the company's shares.
The listing of Sonera Oy's shares in the Helsinki Stock Exchange
Before Sonera was listed on the Main list it applied for listing of its shares on the Prelist of Helsinki Stock Exchanges. The Prelist of Helsinki Stock Exchange allows Finnish and foreign investors to gain information of the market price of the share and trading volumes. The Prelisting is a new way of receiving information about the pricing and trading volume of shares during the period between pricing and the actual stock exchange listing. The trading on the Prelist started on November 10, 1998 and terminated on November 17, 1998 when the trading on the main list began. Now that the current value of Sonera's stock is available it enables the use of Sonera's shares in the company's future mergers and acquisitions.
The implementation of UMTS in the European Union
A new telecommunication network will be implemented in the European Union. UMTS (Universal Mobile Telecommunications System) is a new worldwide mobile network system. On December 15, 1998 the Ministry of Transport and Communications of Finland declared the licences for the so-called "third generation mobile networks" open for application. The companies applying for this license must report to the Ministry of Transport and Communications of Finland by January 15, 1999. The final application for the license must be submitted later this spring. Finland is the first country in the world to commence these applications. Telecommunications provided by the new technology will start in 2002, at the latest.
Sonera will file for the license later this spring.
By Jari Sonninen at Heikki Haapaniemi, Attorneys at law Ltd.
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