Telenor to make offer for all outstanding shares in Glocalnet

(Fornebu, 8 February 2006) Telenor has increased its shareholding in the Swedish broadband provider Glocalnet, while also issuing an offer for all outstanding shares in the company, for a cash consideration of SEK 4 per share.

Glocalnet is one of Sweden’s fastest-growing broadband providers, and in 2005 the company accounted for close to 20 per cent of the total growth within xDSL in Sweden. The company has its strongest foothold in the low-end segment. Since 2002, Telenor has held a 36.6 per cent interest in the company, and has assumed a key role as partner and supplier. Telenor now wants to develop Glocalnet alongside its other commitments in Sweden, and has decided to assume control of the company.

“Telenor aims to stand out as a leading player in the fast-growing Nordic broadband markets, and through the acquisition of Bredbandsbolaget in 2005, we have gained a strong foothold in Sweden,” said Executive Vice President and Head of Telenor Nordic, Morten Karlsen Sørby. “Glocalnet has gained a strong position in the low-end segment, and will be a good supplement to Bredbandsbolaget, thus further strengthening our market position.”

The ownership structure of Glocalnet has included a number of large players, and there has previously been some disagreement with respect to the development of the company. By talking control, Telenor want to solve any previous ownership issues and maintain focus on the company’s operations.

“We will of course look at opportunities for cooperation between our activities in Sweden, both with respect to operative practices and through development of new services, such as Voice over IP. However, our key issue is to ensure that Glocalnet continues to gain broadband market share, and we are determined to maintain Glocalnet’s independent and attractive standing,” said Morten Karlsen Sørby.

About the offer
Telenor’s acquisition of 13.5 per cent of the shareholding, to secure a 50.1 per cent ownership share, was made at a price of SEK 4 per share, which amounts to a total consideration of SEK 136 million. The acquisition triggers a compulsory offer for all outstanding shares in Glocalnet.
Together with SEB Enskilda, Telenor will prepare a prospectus containing all details relating to the offer. This prospectus is likely to be due on 1 March 2006. The offer to shareholders will be valid from 2 March until 23 March 2006.
If all shareholders accept the offer of SEK 4 per share, this will involve a further payment of approximately SEK 500 million. The transaction is subject to approval from Swedish competition authorities, and the offer will be conditional on such approval.

About Glocalnet
Glocalnet develops and markets a broad range of telecommunications services, including fixed-line and mobile telephony, but it is through the sale of broadband services that it has made its reputation. The company currently has 104,000 broadband customers, and is one of Sweden’s fastest-growing broadband providers.
In 2005, Glocalnet’s revenues amounted to SEK 1.09 billion, and the company had a negative EBITDA of SEK 68.6 million. At year-end 2005, the company’s net cash holdings amounted to SEK 184 million. Glocalnet has approximately 115 employees and is headquartered in Stockholm. The company is listed on the O-list on Stockholm Stock Exchange.

The prospectus will be made available on Telenor’s website from 1 March (www.telenor.no/ir)

Contact Information

Pål Kvalheim

Vice President Communications, Telenor Nordic

Telenor

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