Telenor Denmark

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 2,500 sites and transmission stations, including both 2G and 3G technologies. Telenor has more than 80 shops all over Denmark, of which 20 are Telenor Franchise shops, selling both fixed and mobile products. In spring 2007, Telenor reached an agreement with the commodity chain Føtex on concessions within stores resulting in a total of 60 new telecom shops. In fall 2010, Telenor reached a similar agreement with another commodity chain, Bilka, to open 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 at 31 March 2011, Telenor Denmark had 2.0 million mobile subscriptions, 236,000 fixed broadband subscriptions and 215,000 fixed telephony subscriptions (including VoIP). As at 31 March 2011, the mobile penetration and number of inhabitants in Denmark were 136% 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 will, from May 2011, be able to refarm 9 MHz in the 900 MHz band and 19.4 MHz in the 1800 MHz band. An auction of 2x30 MHz in the 800 MHz band has been announced and is expected to take place by the end of 2011.

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 26%, as at the end of March 2011. TDC’s estimated market share was 40%, while TeliaSonera’s and Hi3G’s market shares were 19% and 8%, 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 11% as at 31 March 2011. TDC is the largest fixed 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 3% as at 31 March 2011. In addition, several power utilities have entered the Danish fixed broadband market and are building fibre infrastructure.

Regulatory matters

In Denmark, the competent regulatory authority is the NTA. 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’, which can charge a higher tariff until 1 May 2011. From 1 May 2011, full symmetry in prices of all operators at a maximum of DKK 0.33 per minute applies.

With regards to fixed termination, a new decision was published on 21 January 2011. All operators – including Telenor - are still designated as having SMP and are obliged to give access to termination. Furthermore, all operators - including Telenor - are also price regulated (historically TDC was the only operator that was price regulated). Symmetrical prices apply for all four operators, regulated by an LRAIC model and NTA price decision. It was decided that by 15 April 2011, the termination charges must not exceed DKK 0.014 per minute at peak hours (DKK 0.0074 per minute at off-peak and DKK 0.0107 per set-up). Telenor has appealed this decision.