Tele2 threatens price war in Dutch mobile market

* Tele2 (Other OTC: TLTZF - news) targets over 20 pct of Dutch mobile from 5 pct now

* Set (KOSDAQ: 027040.KQ - news) to have own network, launch date unclear

* Price to be focus in battle for customers

By Robert-Jan Bartunek

DIEMEN, Netherlands, Sept 5 (Reuters) - Sweden's Tele2 plans to grab over 20 percent of the Dutch mobile telephony market by rolling out a high-speed network and undercutting rivals, raising the prospect of a new price war in Europe's struggling telecoms industry.

Tele2 currently has a market share of about 5 percent in the Netherlands by using the network of rival T-Mobile, but is building a new high-speed network of its own after winning spectrum in an auction in late 2012.

"We see this as an ambition, that's what we'll say about it," Tele2 Netherlands chief executives told analysts of the 20-percent market share target at a conference on Thursday.

Tele2 did not disclose when it hoped to achieve the target, nor when it would launch its network, though it said work to install 3,500 base stations across the country was underway.

Dutch market leader KPN (Amsterdam: KPN.AS - news) already offers super-fast fourth-generation (4G) services, and Tele2 will also face competition from Deutsche Telekom (LSE: 0MPH.L - news) 's T-Mobile and Britain's Vodafone (LSE: VOD.L - news) .

Tele2 said it was less important to be first with 4G than to offer the right price to attract customers. Pointing to the potential for market share gains, it cited an independent report published in May showing Dutch data transfer and voice calls via mobile phones were the most expensive in the European Union.

The strategy has had some success elsewhere in Europe.

In France, cut-price newcomer Iliad (Paris: FR0004035913 - news) grabbed 5.4 percent of the market in just six months after launching a price war against the likes of France Telecom, Vivendi's SFR and Bouygues Telecom.

Cut-throat competition has taken a big chunk out of the profits of many European telecoms firms, leading to a wave of mergers and acquisitions across the sector.

At 1310 GMT, Tele2 shares were down 0.2 percent at 86.25 Swedish crowns, within a European blue-chip index up 0.3 percent. KPN shares were down 0.9 percent, while Deutsche Telekom's were down 0.6 percent. Vodafone was up 1.9 percent.

While competing on price, Tele2 said it would not offer tariffs with unlimited data to Dutch consumers.

"Unlimited bundles are not the future," Vogelpoel told Reuters at the conference in the Netherlands.

Tele2, for which the Netherlands made up 18 percent of sales last quarter, said it was also looking for market shares there of more than 10 percent in business telecommunications and more than 15 percent in broadband internet.

The group said earlier on Thursday that it had selected Nokia Solutions and Networks, Huawei and Mavenir Systems to provide equipment for the new network.