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Denmark - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. Denmark's telecommunications sector generated total revenues of DKr39,460 million in 2005; this represented a year-on-year increase of 3.6% from DKr38,074 million in 2004. Of the 2005 total, fixed network services generated 27.3% (DKr10,760 million), down from 30.7% (DKr11,680 million) in 2004. Mobile communications services accounted for 36.8% of revenues in 2005 (DKr14,527 million), up from 33.6% (DKr12,774 million) in 2004. Data communication and Internet services generated revenues of DKr6,670 million in 2005 (16.9% of the total), up from DKr6,193 million in 2004 (16.3%). Full liberalisation of the Danish telecommunications market was introduced in July 1996, earlier than the European Commission (EC) deadline of January 1, 1998 for most European Union (EU) member states. However, despite this early liberalisation, incumbent operator TDC retains the lion's share of the local fixed market, with 80% of PSTN lines installed, 64% of the domestic telephony traffic market, and 48.7% of the international telephony market as of June 2006. The National IT and Telecom Agency (NITA), the industry regulator, has made several attempts to break TDC's dominance of the fixed-line market, with mixed results. As in many other European markets, considerable success has been achieved in forcing the incumbent to lower interconnection charges, but the implementation of local loop unbundling (LLU) has been dogged by the reluctance of TDC to complete access conections. The licensing of fixed wireless access (FWA) services has met with some success, and Denmark is now served by several high-speed wireless networks. The NITA was less successful in its attempts to award third-generation (3G) cellular licences, with controversy dogging the decision to award licences on an auction basis, as well as rules concerning the formation of consortia to bid for licences. However, the four national licences were awarded in September 2001, following the completion of a one-round, sealed-bid auction, to TDC, Telia A/S, Orange A/S, and Hi3G Access. Under the auction rules, the licence price was set according to the fourth-highest bid submitted in the auction, which was just under DKr950 million. SONOFON A/S was expected to bid but did not do so. Towards the end of 2005, the NITA auctioned a single licence to establish and operate a 3G mobile network covering the frequency bands 1965-1980MHz paired with 2155-2170MHz, and 1910-1915MHz (unpaired). The spectrum was previously held by Orange, but was returned to the NITA following TeliaSonera's take-over of Orange. In December 2005, SONOFON was awarded the fourth UMTS licence by the NITA at a price of DKr533 million. In September 2006, SONOFON launched its 3G service. SONOFON's 3G network is also set up for HSDPA, which will be able to offer speeds up to 3.2Mbit/s. The Danish market has seen a fair degree of consolidation since the beginning of 2004, with a number of well-established names being acquired. Among others, TDC completed its acquisition of mobile service provider Telmore in January 2004, and its acquisition of pan-Nordic fixed network operator Song Networks in November 2004. TeliaSonera acquired mobile competitor Orange A/S from France Telecom in October 2004 and merged it with TeliaSonera Mobile in Denmark, and Tele2 acquired ISP Tiscali Denmark in February 2005. Telenor, having completed its previously-announced acquisition of SONOFON in February 2004, acquired local operator CyberCity in May 2005. SONOFON itself had acquired mobile service provider CBB Mobil in April 2004. Early in 2006, TDC was acquired by Nordic Telephone Company ApS (NTC), an investment partnership formed by Apax Partners Worldwide LLP, The Blackstone Group International Ltd, Kohlberg Kravis Roberts & Co LP, Permira Advisers KB, and Providence Equity Partners Ltd. At the time of writing, NTC held 87.9% of the TDC outstanding stock.
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