Telenor Denmark

Telenor entered the Danish market with the acquisition of a 53.5% stake in the mobile operator Sonofon in 2000. In December 2003, Telenor purchased the remaining 46.5% of the shares in Sonofon. Other acquisitions in Denmark include CBB mobil in 2004, Cybercity in 2005, Tele2 Denmark in 2007 and BiBoB in May 2009. Telenor Denmark Holding is the owner and parent company of two subsidiaries in Denmark (Telenor and CBB mobil). Telenor Denmark Holding was established in November 2005 when Sonofon Holding A/S changed its name to Telenor Denmark Holding. In September 2008, Sonofon, Cybercity and Tele2 were merged into one company named Sonofon and in June 2009 Sonofon and Cybercity were rebranded to Telenor. From January 2010 Telenor Butikken was merged into Telenor A/S and BiBoB was merged into CBB mobil.

Telenor Denmark provides GSM and 3G mobile solutions for residential and business customers in Denmark and is the second largest mobile operator in Denmark. Telenor’s network covers the whole country with more than 2,500 sites and transmission stations including both 2G and 3G technologies. Telenor Butikken has more than 90 shops all over Denmark selling both fixed and mobile products. In spring 2007, Telenor reached an agreement with the commodity chain Føtex on concessions within stores resulting in the opening of 70 new telecom shops.

Telenor Denmark further provides broadband solutions and network-based products such as security and VPN (Virtual Private Network) products for residential and business customers. Telenor serves small, medium and large business customers as well as the consumer market. Telenor covers 70% of Denmark by population with its own DSL infrastructure and focuses on the high-end consumer, home office and the small and medium enterprise segments of the market. Telenor also operates a successful VoIP product over its DSL access lines.

As at 31 March 2010, Telenor Denmark had 2.1 million mobile subscriptions, 256,000 broadband subscriptions and 266,000 fixed telephony subscriptions (including VoIP). As at 31 March 2010, the mobile penetration and number of inhabitants in Denmark were 135% and 5.6 million, respectively.

Network and licences

Telenor currently holds five spectrum licences suitable for mobile services: a 900 MHz licence, two 1800 MHz licences, a 2100 MHz licence and a licence in the 2600 MHz band. The 900 MHz licence expires in 2019, while the two 1800 MHz licences expire in 2017. The 2100 MHz licence was acquired in December 2005 and expires in 2021, whereas the 2600 MHz licence was acquired in May 2010 and expires in 2030. The roll-out of the 3G network started immediately after the UMTS licence was acquired. On 27 September 2006, the 3G network was launched in the four largest cities in Denmark. The roll-out of the 3G network across Denmark continues, as Telenor is obliged to establish 80% coverage by 2013 (based on population). In addition to the rollout of the 3G network, Telenor continues to invest in the GSM network to secure and improve quality and capacity in this network. A final decision was received from National IT and Telecom Agency (NTA) on 23 December 2009 regarding refarming of the 900 and 1800 MHz bands. As a result, Telenor will, from May 2011, be able to refarm 9 MHz in the 900 band and 19.4 MHz in the 1800 band.

Competition

In addition to Telenor, there are two other GSM network operators in Denmark: TDC and TeliaSonera. UMTS licences are currently held by Telenor, TDC, TeliaSonera and Hi3G. Telenor is the second largest of the four mobile operators in Denmark with an estimated market share of 28% at the end of March 2010. TDC’s estimated market share was 39%, while TeliaSonera’s and Hi3G’s market shares were 20% and 7%, respectively. A consolidation of independent service providers took place during 2009, with Telenor acquiring BiBoB and TDC acquiring M1 and Unotel/Company Mobile.

Telenor is the second largest fixed broadband operator in Denmark with an estimated market share of 13% as at 31 March 2010. TDC is the largest broadband operator with an estimated market share of 63% after having acquired Fullrate and A+ in addition to the power utility DONG’s fibre network Telia Stofa (TeliaSonera’s Danish cable operator) had an estimated market share of around 10% as at 31 March 2010. In addition, several power utilities have entered the Danish broadband market and are building fibre infrastructure.

Regulatory matters

In Denmark the competent regulatory authority is the National IT and Telecom Agency (NITA). Telenor has been designated as having SMP in the Danish mobile communications markets for mobile and fixed termination, and as a consequence is subject to a number of obligations with regard to mobile termination, including the obligation to meet all reasonable requests for interconnection agreements on transparent, objective and non-discriminatory terms. Furthermore, Telenor is subject to a cost obligation and interconnection agreements have to be made publicly available. Currently, the cost obligation is based on Long Run Average Incremental Cost (LRAIC) modelling. Accordingly, Telenor can charge a maximum interconnect charge including set-up charges of DKK 0.43 per minute from 1 May 2010. This applies to all operators, except ‘3’.