Vodafone is flogging its Swedish operation to Telenor for around €1bn (£700m) because it "makes sense".

The deal, announced yesterday afternoon, sees the UK-based mobile giant selling its 100 per cent stake in Vodafone Sweden to the pan-Nordic telco and the largest provider of telecoms services in Norway.

If all goes to plan and the deal secures the necessary regulatory approval, it should be completed by the end of the year.

So why is Vodafone bailing out of Sweden? Well, it seems that the Swedish mobile market is becoming increasingly competitive.

And Vodafone execs reckon that those likely to do well in the region need a "Nordic footprint". Which is handy since Telenor, which has operations in Norway, Sweden and Denmark, is well placed in that market.

"We have a good business in Sweden," said Vodafone chief exec Arun Sarin, "but the particular industry structure and regulatory environment means that it makes more sense for our customers, our employees and our shareholders for a pan-Nordic player like Telenor to own the company."

Vodafone Sweden has around 1.5m punters and generated some €703m in revenue in the 12 months to March. ®