TeliaSonera on Monday agreed to acquire Tele2 Norway for 5.1 billion Swedish kronor (€547.7 million).

The deal will see TeliaSonera, which offers services in Norway under the NetCom brand, increase its customer base to 2.7 million from 1.6 million, giving it a market share of approximately 40%. Incumbent Telenor will remain the country's largest telco with 3.2 million customers.

"This is a great strategic fit for TeliaSonera and in line with our ambition to strengthen our position in our core markets," said Johan Dennelind, group CEO of TeliaSonera, in a statement.

"The combined strength will create a company that is better able to serve Norwegian mobile customers and businesses," said Arild Hustad, CEO of Tele2 Norway, in a separate statement.

Tele2's exit from Norway has been on the cards since it failed to secure additional LTE spectrum in an auction that took place in December 2013. In February it suspended its 3G network deployment while it looked for a long-term solution, and in March it hired local investment bank ABG Sundal Collier to help it carry out a strategic review.

"This is the predictable result of a pretty miserable and failed spectrum licensing process, which has resulted in pretty dramatic consolidation," said Bengt Nordström, CEO of Swedish consultancy Northstream.

"Norway now essentially has two strong operators, plus a very small outfit with lots of spectrum, little infrastructure and few customers," he said.

Indeed, the deal reduces the number of mobile network operators in Norway to three from four. One of those – – entered the market via December's auction and offers only mobile data services.

Monday's deal is subject to approval from the Norwegian Competition Authority (NCA); it is unclear how much attention the European Commission will pay to the acquisition. While Norway is not technically a member of the European Union, it is a member of the European Free Trade Area (EFTA), which includes rules on competition. In addition, both parent companies are based in Sweden, which is part of the EU.

Tele2 said it expects to complete its Norway exit in the first quarter of 2015.

TeliaSonera said that to demonstrate the