TeliaSonera said on Wednesday it would purchase 1.4 percent of the newly issued shares of Spotify – a company which provides free-on-demand music or advertisement free for paid subscriptions – for $115 million.
CEO Johan Dennelind said that the investment was a part of the company’s policy to overcome the stalling growth in the telecom sector what he described as “the industry puzzle.”
The Nordic telecom operator is struggling with a low increase in revenues like many of its counterparts in Europe.
“We want to master the internet logic as well as we have mastered the telecom logic,” Dennelind said.
“We haven't been quick enough in the past, and this is a way for us to take part in a company that has it as its DNA: innovation, speed, ideas, launches and global competition.”
The deal, valuing Spotify at $8.2 billion, came just two days after Apple announced its entry into the music streaming market. The Stockholm-based company also competes with Pandora and Tidal –rapper Jay Z’s streaming service.
According to Spotify’s blog the firm now has more than 20 million subscribers and over 75 million active users.
Spotify recently announced that it would also provide video content from musicians, TV stations and news organisations. Its revenue reached €1.08 billion last year with a €165 million operational loss.