Telia cuts back international effort

Telia today announced plans to scale back its International Carrier unit in response to weaker-than-expected demand in broadband expansion and delays in 3G buildouts.

The Sweden-based carrier’s international efforts will now focus on offering wholesale capacity and IP services to large customers over the profitable portions of its European and trans-Atlantic networks. It will also continue to operate its IP network and maintain peering points in Europe and the U.S. The international voice business will be refocused on interconnection agreements and bilateral routes. The international unit’s resources for sales, finance, administration and customer care will be moved to Sweden.

Telia will shutter its Asian operations, as well as its U.K. voice resale business and U.S. domestic capacity service. The company’s co-location business will also be terminated, while the number of its commercial points of presence will be “significantly reduced.”

Further decisions about which specific portions of its network will be affected are pending, said a Telia spokesman. “That decision hasn’t been taken yet,” he said. “We are looking over our network now and seeing which parts will be affected more.”

The company, he said, hopes to complete the process by 2003 and will honor all existing contracts.

As a result of these actions, Telia said it will cut more than 50% of its 800 employees focused on the international business. The company will also take a restructuring charge in the third quarter of approximately $373 million and will write down the value of its fixed assets by about $640 million.