Telenor Denmark

Last updated June 2012

Telenor entered the Danish market in 2000 with the acquisition of a 53.5% stake in the mobile operator Sonofon. 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 A/S 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 as 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 2,700 sites and transmission stations, including both 2G and 3G technologies. Ongoing network sharing project with TeliaSonera will result in sharing both 3G and 4G (LTE) network in 2012 and sharing 2G network in 2013.

Telenor has more than 72 shops all over Denmark, of which 16 are Telenor Franchise shops, selling both fixed and mobile products. However, from 1 January 2013 the cooperation with Franchise shops will be terminated. In spring 2007, Telenor reached an agreement with the commodity chain Føtex on concessions within stores which now holds 29 telecom shops. In fall 2010, Telenor reached a similar agreement with another commodity chain Bilka, which has now opened 17 ‘shop in shop’ stores.

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 of 31 March 2012, Telenor Denmark had 1.986 million mobile subscriptions, 204,000 fixed broadband subscriptions and 174,000 fixed telephony subscriptions (including VoIP). As of 31 March 2012, the mobile penetration and number of inhabitants in Denmark were 140% 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. Telenor is obliged to establish 80% 3G coverage by 2013 (based on population). This requirement was met as at the end of 2010. 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 the National IT and Telecom Agency (the NTA) on 23 December 2009 regarding refarming of the 900 MHz and 1800 MHz bands. As a result, Telenor has since May 2011, been able to refarm 9 MHz in the 900 MHz band and 19.4 MHz in the 1800 MHz band. An auction of 2×30 MHz in the 800 MHz band has been announced and is expected to take place in June 2012.

Competition

In addition to Telenor, there are three other GSM network operators in Denmark: TDC, TeliaSonera and Hi3G. 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 25%, as at the end of March 2012. TDC’s estimated market share was 41%, while TeliaSonera’s and Hi3G’s market shares were 18% and 10%, respectively. A consolidation of independent service providers took place during 2009, with Telenor acquiring BiBoB and TDC acquiring M1 and Unotel/Company Mobile. In May 2011 TDC further acquired Service Provider Onfone.

Telenor is the second largest fixed broadband operator in Denmark with an estimated market share of 17% as at 31 March 2012. TDC is the largest fixed broadband operator with an estimated market share of 72% 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 9% as at 31 March 2012. In addition, several power utilities have entered the Danish fixed broadband market and are building fibre infrastructure.

Regulatory matters

In Denmark, the competitive regulatory authority is the Danish Business Authority (DBA). Telenor has been designated as having SMP in the Danish mobile communications markets for mobile and fixed termination.

With regard to mobile termination, Telenor is obligated to meet all reasonable requests for interconnection agreements on transparent, objective and non-discriminatory terms and at cost oriented prices. Currently, the obligation of cost oriented prices is based on Long Run Average Incremental Cost (LRAIC) modelling. From 1 March 2012 the maximum MTR Telenor can charge including set-up charges is regulated at DKK 0.23 per minute. This rate applies to all mobile network operators in Denmark.

SMS interconnection between companies that compete in the Danish mobile market at retail level has also been price regulated since August 2011. From 1 March 2012 the maximum rate for termination of SMS is regulated at DKK 0.12 per SMS.

With regards to fixed termination, 20 operators – including Telenor – are designated as having SMP and are obligated to meet all reasonable requests for interconnection agreements. Only TDC is currently obligated to offer fixed termination at cost oriented prices. The obligation of cost oriented prices is based on LRAIC modelling and the maximum fixed termination rate for 2012 is set at DKK 0.0148 per minute at peak hours, DKK 0.0078 at off peak hours and DKK 0.0131 in set-up fee.

The DBA published a draft decision in February 2012 suggesting that Telenor, TeliaSonera, Colt and Hi3G should also be obligated to offer fixed termination at cost oriented prices. A final decision is expected in June 2012.