Sonera's plans for world domination took a bit of a hit when the telecommunications industry imploded in 2001, saddling them with some €4.5 billion of debt, mainly for the German UMTS (3G) licenses they had purchased for an exorbitant price. The company skirted dangerously close to bankruptcy in autumn 2001, but was rescued by a combination of a stock offer and an injection of nearly €1 billion from Finnish taxpayers. Following large layoffs, closing most overseas operations and selling off non-essential assets, they had reduced their debt load to a mere €2.5 billion.

On March 26, 2002, Sonera announced its merger with the Swedish telecoms giant Telia. Shades of Nordea, the combined company will have some 35,000 employees and a market share of over 50% in Finland, Sweden and the Baltic countries, as well as significant stakes in Denmark, Turkey, Russia and much of the CIS. Telia being twice as big as Sonera, Sonera will retain only 36% of the shares in the new company, and the headquarters of the new company will move to Stockholm, Sweden.