By Leila Abboud and Sophie Sassard
PARIS/LONDON (Reuters) - Tele2, which lost a December auction for the mobile spectrum it needs to run its Norwegian network, is in deal talks with the winner, Access Industries, in a bid to salvage its local operation, said four people familiar with the matter.
Tele2, which is Norway's third-largest mobile operator behind Telenor and Teliasonera, has spent nearly 400 million euros since 2011 to build a business that now has 1.2 million customers and some 1,700 mobile towers.
But Access Industries, a holding company owned by Ukrainian-American billionaire Len Blavatnik who also owns Warner Music Group, deprived Tele2 of the industry lifeblood - mobile spectrum to carry its customers' data and calls over its network - by winning an auction with a $115 million bid for airwaves in the 800, 900 and 1800 megahertz bands.
The two sides are now in talks, the sources said, but are unlikely to reach a deal before Tele2 results on Friday. Options on the table include Access selling its spectrum to Tele2, Access buying Tele2's Norway operation, or some type of licensing of the spectrum to Tele2.
But Access would only sell its spectrum to Tele2 on condition that it also buy ice.net, a small Norwegian mobile broadband company owned by Access. Nor is Access willing to pay a high price for Tele2's Norway unit, two of the sources said.
Tele2 is also looking at other options besides Access, such as buying spectrum in the next auction, but it remains unclear if the government would sell them this year or next.
Kinnevik, the holding company that is Tele2's largest shareholder, declined to comment.
Tele2 declined comment.
A spokesman for Access did not return a request for comment.
(Additional reporting by Sven Nordenstam, Mia Shanley, and Olof Swahberg; Editing by Andrew Callus)