At a glance

TDC at a glance

Profile

TDC is the leading provider of communications and entertainment solutions in Denmark with a market-leading position in each of its major segments, landline telephony, landline broadband, mobile telephony, mobile broadband and pay-TV as well as in the developing multi-play segment. TDC has successfully defended or even grown its leading market positions over the years, and has higher shares of both the pay-TV and broadband markets than its core and Nordic peers. This has been achieved through a range of strong domestic brands covering all customer segments, channels and product categories in the residential and business markets, and through TDC's undisputed position as the leading provider of technology platforms and infrastructure across all the major access technologies - copper, coax, fibre and mobile (GSM, UMTS and LTE). TDC is one of only two European incumbent operators to fully own a cable-TV network in its domestic market.

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Outside Denmark, TDC has significant presence in the pan-Nordic business market. With fully controlled subsidiaries in Sweden, Norway and Finland, TDC can offer pan-Nordic solutions to businesses and organisations across the Nordic countries and challenge the local incumbent operators by offering its corporate customers seamless business solutions, including hosting and systems integration solutions.

Organisation and brands

TDC has a customer-centric structure with five business divisions and a shared headquarters function to emphasise its focus on customer types and needs.

Through a multi-brand strategy based on differentiated brands such as TDC, Fullrate, Telmore, M1 and YouSee, TDC products span all key telecommunications product segments in Denmark, with price positions ranging from no-frills to premium. Strong brand recognition is achieved in each of these market segments, and TDC distributes its products through an extensive distribution network, including TDC's own shops, dealer network, account managers, call centres and websites.

Branddiagram-UK.png

Infrastructure

Denmark has the highest broadband penetration in the world with 74% of all households and businesses subscribing to broadband through xDSL, coax, fibre or other access technology. As the incumbent telecommunications operator in Denmark, TDC has a proud legacy of building and operating the communications infrastructure in Denmark and thereby contributing to Denmark's leading position.

TDC owns, operates and continues to consistently invest in high-quality, modern and widespread infrastructure across all key access technologies at a level surpassing its peers. TDC's landline network, including cable and fibre, enables almost all Danish households to receive broadband with download speeds of above 512 kbps as well as landline telephony. While the vast majority of households can receive broadband at download speeds of up to 20 Mbps and triple-play services (bundled telephony, internet and TV services through one access channel), speeds of up to 50 and even 100 Mbps are also widely available.

Landline network, household coverage (EoY 2010)
Triple-play std. def. Broadband 20 Mbps Broadband 50 Mbps Broadband 100 Mbps1
xDSL 83% 75% 25% -
Fibre2 4% 4% 4% 4%
Coax 53% 53% 39% 39%
Total 90% 87%3 55% 41%
  1. Platform speed, commercial products not launched yet.
  2. Including acquisition of DONG Energy's Fibre network.
  3. Flex speeds - not guaranteed speeds. Information based on number of dwellings in Denmark where a dwelling is defined as a residential building space which is registered in the Central Register of Buildings and Dwellings (BBR), irrespective of whether it is occupied by a household. Holiday homes are not included.

Currently, TDC's mobile network covers almost the entire population with GSM and EDGE, 94% of the population with 3G, and continuous HSDPA roll-out enabling download speeds of up to 42 Mbps is in progress. Moreover, TDC is using its recently acquired 2.5GHz licence to roll out 4G (LTE). By year-end 2010, 4G coverage was present in the six largest cities in Denmark with the commercial launch of products and services to follow in the first half of 2011.

Mobile network, population coverage (EoY 2010)1
GSM EDGE 3G HSDPA LTE/4G
14.4 Mbps 42 Mbps
99% 99% 94%2 35% 15% 8%
  1. Based on nominal speed installed and on estimated roll-out of TDC's mobile network.
  2. Based on UMTS licence requirements.

Customers

The TDC Group served 8.9m customer relationships at year-end 2010, of which 0.2m belonged to pan-Nordic activities. One customer can subscribe to several different products, e.g. through triple-play services, thereby representing several revenue generating units (RGUs).

Customers, Domestic
FusionCharts.
  • Other
  • TV
  • Internet and network
  • Mobility services
  • Landline telephony
Customers, Nordic
FusionCharts.
  • Internet and network
  • Mobility services
  • Landline telephony

Employees

The TDC Group had 10,423 full-time employee equivalents (FTEs) at year-end 2010, with the domestic operations accounting for 9,200. In past years, TDC has significantly reduced FTE costs while enhancing employee efficiency. These reductions are possible and necessary due to copper line loss, lower fault rates - where time usage has declined by an annual compounded growth rate of 12% since 2007, fewer calls to customer centres, consolidation of locations and an increase in the general productivity.

Revenue

Revenue totalled DKK 26.2bn for the TDC Group in 2010. The largest shares of revenue came from mobility services and internet and network, with landline telephony and TV as the third- and fourth-largest contributors, respectively. Across these segments, activities in the other Nordic countries generated revenue of DKK 2,086m (TDC Sweden), DKK 1,044m (TDC Norway) and DKK 727m (TDC Finland).

Revenue
FusionCharts.
  • Other, incl. eliminations
  • TV
  • Internet and network
  • Mobility services
  • Landline telephony

Market shares

TDC has successfully consolidated its domestic market leadership in the most important segments of landline broadband and mobile telephony as well as in landline telephony and mobile broadband. Equally important, TDC has proved able to steadily increase or defend its market position in growth markets, most notably in the mobile broadband market, where in 2010, TDC became market leader by offering attractive products and best-in-class infrastructure. In the Pay-TV market, TDC has further improved its leadership with innovative digital TV products. In the novel multi-play segment, TDC leads the triple-play market.

Market-shares-UK.png

Popular, innovative products

TDC strives to innovate and anticipate customer needs, with a view to constantly expanding the Danish population's communications and entertainment options, both at mass market and niche/customised levels. TDC also increasingly utilises its current infrastructure to deliver value-added services. Recent examples of successful product launches include:

  • YouSee Plus - adding value to digital TV with features such as pause, rewind, start-over and record functions (PVR), HDTV and TV archive with the previous 30 days of broadcasts available. The Cinema feature (video-on-demand) enables customers to rent movies (approximately 1,200 titles available and increasing) from home in cooperation with Hollywood's leading studios, covering more than 90% of revenue on the North American movie market. Movies are available via Cinema when DVDs are released or, in some instances, even in parallel with cinema releases. Releases in parallel with cinemas will be pursued increasingly in the future.
  • HomeTrio - bundled broadband, VoIP/PSTN and digital TV. As YouSee Plus, the product offers pause, rewind, start-over and record functions, movie rental and optional extra and HDTV channels. A business version with professional security, service and features is also available.
  • TDC Play - a ground-breaking and award-winning service giving mobile and broadband customers access to more than 10 million music tracks at no additional charge. Currently, more than 10 million tracks are downloaded or streamed per month, amounting to more than 250 million tracks downloaded or streamed since TDC Play was introduced.
  • 'TDC to TDC' - an add-on product enabling residential mobile customers to call the 1.9 million other TDC-brand mobile customers at a flat-rate fee. The product, designed to increase retention, is immensely popular.
  • TDC HomeDisk - a backup solution that mirrors users' local content to TDC's servers and allows remote access.
  • TDC Scale - a professional and flexible switchboard function for businesses that handles all calls and allocates only one phone number for each employee.
  • TDC PrivatAlarm - a surveillance and alarm service that improves security at home.
  • Web TV - enabling customers to view TV and video-on-demand on their PCs.

Providing better customer experiences is a top priority

TDC's 'TAK' programme (take responsibility for the customer) includes all business divisions and is clearly focused to improve customer service. Since the start of its ongoing implementation, overall customer satisfaction has improved significantly to the best performance in four years and the number of complaints has been almost halved. Improvements are driven by reductions in fault rates, reductions in lead times in fault handling and delivery processes and an intensive focus on making 'first time right' for all touch points. However, customer satisfaction requires further improvement and TDC is dedicated to keeping customer satisfaction at the top of its corporate agenda in the years to come.

Profitability

Through disciplined implementation and attention to efficiency, despite the difficult economic environment, TDC has demonstrated increasing profitability in recent years. The 2010 Group EBITDA margin of 41.2% outperformed many of TDC's European peers.

Ambition and strategy

TDC aspires to become the best performing incumbent telecom player in Europe by 2012 measured on customer satisfaction, value creation, and employee pride, while remaining the backbone of a world-class Danish communications infrastructure.

This ambition will be achieved through a strategy anchored in:

  • Market leadership across all segments of the domestic market
  • Unmatched technology and brand platforms in the domestic market
  • Strong challenger positions in the Nordic markets
  • Sustained focus on the provision of telephony, internet, TV, data communications, and integration and hosting solutions as well as related contents and services

The ambition will be achieved within the context of several important opportunities and challenges.

Key opportunities:

  • Growing demand for mobile broadband and smartphones is driving mobile data growth
  • Strong position to benefit from continued up-selling and increasing on-demand services within Pay-TV
  • Increasing move towards multi-play solutions in the consumer market
  • Opportunity to benefit from the growing no-frills mobile and broadband markets through TDC's leading no-frills consumer brands
  • Opportunities for improved cross-selling and customer loyalty for all customer relationships
  • Increasing move from standard offerings to integrated, value-added solutions in the business market
  • Opportunity to leverage TDC's strong challenger positions to grow presence in the Nordic business markets

Key challenges:

  • Migration from traditional landline voice (PSTN) to VoIP and mobile
  • Maturing broadband and mobile voice markets
  • Increased competition and price pressure in the mobile market
  • Over-the-top players challenging the traditional mobile and TV value chains
  • Increased competition in the business market
  • Continued price and access regulation

Strategic priorities

To achieve the ambition in 2012 and address the opportunities and challenges mentioned above, TDC has defined ten corporate strategic priorities. The first five strategic priorities are to underpin TDC's ongoing corporate transformation while the remaining five strategic priorities will further reinforce TDC's innovation and marketing efforts.

Transformation priorities

1. Customer satisfaction

TDC will continue to improve customer satisfaction through the Group-wide 'TAK' programme.

2. Revitalisation of behaviour and culture

TDC will revitalise the organisation from the bottom up through the implementation of TDC 2.0, a group-wide behavioural and cultural transformation project aimed at improving performance, productivity and employee satisfaction.

3. Flexible and efficient organisation

TDC will carry out a fundamental review of its operating model through TDC Pro, a project aimed at increasing efficiency, simplifying production, reducing lead times, strengthening cross-functional collaboration, and exploring outsourcing opportunities.

4. Better IT tools

TDC will enhance its information technology tools through a number of 'star projects' aimed at delivering improved and simplified information technology architecture.

5. Rigorous financial discipline

TDC will maintain strong financial discipline to ensure a positive and predictable cash flow development and attractive remuneration for shareholders through a continued focus on cost and capex efficiency.

Innovation and marketing priorities

6. Landline retention

In the business market, TDC intends to reduce copper line loss by offering alternative landline network solutions such as Scale. In the residential market, TDC aims to reduce churn through flat-rate PSTN products, multi-play products, value-added services and Home Entertainment.

7. Mobility growth

In the residential market, TDC intends to strengthen its mobile broadband position by capitalising on mobile value-added services, the new 4G network, and M1 in the no-frills online market. In the business market, TDC will offer services such as mobile payment and alarm communication and will expand 4G and data coverage in cities and high-traffic areas.

8. 'TV Everywhere'

TDC will continue to innovate the YouSee TV offer and meet customer demand by increasing availability of 'a la carte' offerings and enhancing digital services, for example through improved agreements with major content providers.

9. Growth within business solutions

TDC will create growth within business solutions by continuously moving towards integrated solutions and value-added services in TDC Business and increasing growth from mobile voice, IP-VPN and TDC Hosting in TDC Nordic's business markets.

10. Improved distribution channels

TDC will continuously improve distribution and its market and customer access through initiatives such as enhancing the functionality of our online platforms, strengthening partner channels, and opening up TDC Shops in new areas.

History

1875-1900 Telephony service is introduced in Denmark.
1897 The Danish state takes control of the sector and grants concessions to a range of companies.
1947 Three regional operators remain.
1990 A single incumbent operator is formed.
1994-1998 Sector liberalized by sell-off of state stock in national and international share issues.
1998-2004 Main shareholders include Ameritech (subsequently acquired by SBC in 1999).
2005-2006 Public tender offer results in new majority shareholder Nordic Telephone Company (NTC), controlled by investment funds, each of which is advised or managed, directly or indirectly, by Apax Partners Worldwide LLP, The Blackstone Group International Limited, Kohlberg Kravis Roberts & Co. L.P., Permira Advisers KB and Providence Equity Partners Limited.
2010   2010. NTC completes a marketed offering of existing shares, reducing its ownership percentage to 59.1.
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