TDC at a glance

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Glossary

Profile

TDC is the leading provider of communications and entertainment solutions in Denmark with a market-leading position in each of the major segments – landline telephony, internet access, mobility services and Pay-TV. This is 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, fiber and mobile (GSM and UMTS). TDC is one of only two European incumbent operators to fully own a cable-TV network in its domestic market.

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 organizations across the Nordic countries and challenge the local incumbent operators by offering its corporate customers seamless business solutions, including hosting and systems integration solutions. Following the combination of Sunrise and Orange Switzerland that is to be completed in 2010, TDC will initially retain a 25% stake in the combined entity, which will pave the way for a full divestment in the years to come.

TDC_kort_ataglance_UK.jpg

New organization from 2009 with customer-centric business units

In 2009, TDC adopted a customer-centric structure and is now a multi-brand operator.

New organization from 2009 with customer-centric business units

Infrastructure

TDC owns, operates and continues to consistently invest in high-quality, modern and widespread infrastructure across all key access technologies. As the incumbent telecommunications operator in Denmark, TDC has a legacy of building and operating the communications infrastructure in Denmark. TDC is therefore proud that today Denmark has a broadband penetration of 72%, one of the highest in the world, with almost all Danish households enjoying access to high-quality broadband.

TDC’s multi-faceted domestic network  
Technology Coverage Upgrade status  
Copper xDSL 20 Mbps (guaranteed): Remote DSLAM roll-out ongoing
  44% population coverage.  
  VDSL: 56% population coverage.    
Domestic fiber 15% of Danish homes passed (including 9 percentage points new homes from DONG Energy acquisition).  
  Backbone fiber: 21,134 km (including 836 km from DONG Energy acquisition).   
  Access fiber: 16,452 km (including 5,498 km from DONG Energy acquisition).    
Coax (cable) 55% of Danish homes passed, of which 77% can receive 50 Mbps broadband speed. Fully digitalized, nearly complete return-path and almost complete DOCSIS 3.0 upgrade  
GSM 99% population outdoor coverage, 86% indoor. EDGE roll-out complete  
UMTS 90% population outdoor coverage. HSPA roll-out ongoing  

In Switzerland, Sunrise has a modern infrastructure in the form of GSM/UMTS networks and fiber-optic backbone networks, IP/MPLS and ISP networks with full redundancy. Sunrise has invested extensively to further upgrade its highly competitive mobile network to build out its ULL infrastructure.

The advanced and diverse nature of TDC’s infrastructure is critical for delivering cutting-edge products and services to the widest range of customers and the constant replenishing of the Group’s revenue streams.

Customers

The TDC Group serves 11.7m customer relationships, 0.2m of them in the pan-Nordic activities (business customers) and 2.9m in Sunrise, Switzerland, (merging with Orange).

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

Employees

The TDC Group had 12,827 FTEs at year-end 2009, with the domestic operations accounting for 9,986. In past years, TDC has significantly centralized its locations to improve coordination, reduce costs and enhance employee efficiency. Currently administrative main offices are at Teglholmen in Copenhagen, and in Aarhus (Jutland) and Odense (Funen).

Revenue

Revenue totaled DKK 35.9bn for the TDC Group in 2009. The largest share of revenue came from mobility services, with landline telephony and internet as the second- and third-largest contributors, respectively. Activities in the other Nordic countries generated revenues of DKK 1,726m (TDC Sweden), DKK 879m (TDC Norway), DKK 686m (TDC Finland) and DKK 56m (TDC Hosting in Sweden and Finland, corresponding to 17% of the revenue in TDC Hosting); Sunrise (Switzerland) contributed DKK 9,866m of total revenue in 2009.

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

Market share

By leveraging its incumbent telephony network, TDC has successfully consolidated its domestic market leadership in the most important segments of landline, internet and mobile telephony, and has equally importantly proved able to steadily increase its market share. For example, within the growing TV segment, TDC has a 54% share of the Pay-TV market. TDC has further improved its leadership in this market with innovative digital TV products in TDC and YouSee. In the emerging mobile broadband product segment, the TDC Group is the growing number two player, increasing its market share by offering attractive products and best-in-class infrastructure. With a 63% market share, the TDC Group is a clear leader in the landline broadband market. In Switzerland, Sunrise is an important challenger with a 23% market share of the mobile market. Based on current market shares, when merged, Sunrise and Orange will command a 40% market share of the mobile market.

Market share

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 massmarket and niche/customized levels. Recent examples of successful product launches include:

  • HomeTrio – a bundle of broadband, VoIP/PSTN and digital TV. A business version with professional security, service and features is also available.
  • 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 (Video on Demand) feature enables customers to rent movies (approximately 700 titles and increasing) from home in cooperation with e.g. Warner Home Video. This means that many new movies are available via Cinema when DVDs are released. 
  • TDC PLAY – a ground-breaking and unique service giving mobile and broadband customers access to unlimited downloads of more than 6.3 million music tracks at no additional charge. Currently, more than 8 million tracks are downloaded per month.

Constantly enhanced customer experience

TDC aims at providing market-leading products and services at affordable prices and focuses clearly on improving customer service, recently with the launch of the ambitious ‘TAK’ (take responsibility for the customer) initiative. Initiatives to improve satisfaction ratings and reduce cost to serve through a structured end-to-end approach include SMS information before and after installation, more intelligent call routing, refined scripts and applied disciplined and after-visit surveys. Early results give rise to optimism. Error-handling speed and quality are already improving and the introduction of SMS information has strikingly improved ratings on delivery and installation. However, customer satisfaction requires further improvement and TDC is dedicated to maintaining its focus in the years to come.

Profitability and cash flow generation

Through disciplined implementation and attention to efficiency, despite the difficult economic environment, TDC has demonstrated increasing profitability and growing cash flow generation over recent years. The latest Group EBITDA margin of 36.3% and conversion rate of 67.4% indicate significant improvements, but leave further room for increases going forward.

Ambition and strategy: Building TDC for the future

TDC aims at building on its recent achievements to become the best-performing incumbent telecommunications player in Europe by 2012 measured on value creation, customer satisfaction and employee pride.

This ambition will be achieved through a strategy anchored in:

  • market leadership across all segments in the domestic market
  • an undisputed position as leading technology platform and infrastructure provider in the domestic market, and a portfolio of strong, domestic brands covering all customersegments, channels, and product categories
  • operational excellence and efficiency in the provision of telephony, internet, TV, data communications, and integration and hosting solutions as well as related content and services
  • a challenger position in the business segments in Sweden, Finland and Norway.

This ambition must be achieved in the context of several important challenges such as:

  • migration from the high-margin, high-market share PSTN business to VoIP and mobile
  • maturing broadband and mobile voice markets
  • changing competitive dynamics such as:
  • increased competition in the TV market
  • competitors in the business segment attacking aggressively
  • mobile data value-chain reshaping
  • growing consumer needs and demands for new, improved, customized products and services
  • the continuing need to innovate and invest in the IT platform and telecommunications networks
  • continued price regulation – both from the national regulator and from the EU – which is expected to lead to further price reductions on a number of TDC’s wholesale products, e.g. landline interconnection, mobile termination and international roaming. Moreover, wholesale broadband prices regarding TDC’s cable-TV network will be regulated.

To address these challenges and opportunities, TDC has defined seven ‘must win battles’ for 2010:

  • Customer experience and retention. TDC’s overall ambition of improving the customer experience with an end-to-end process approach will impact both cost to serve, loyalty and retention
  • Profitable growth pockets. TDC will pursue a portfolio of growth opportunities to stop revenue erosion
  • Go-to-market efficiency. TDC will continue to upgrade its customer touch points in retail, online, call centers, and B2B partner channels
  • Brand & technology coverage. TDC will invest in and leverage its brand and technology platforms to provide strategic hedging against consumer and technology migration
  • World-class operations. Through Operations, TDC will improve platform stability and drive efficiency through simplification, vendor management and IT upgrades
  • Cost & cash discipline. TDC will maintain its strong cost and cash discipline across business lines ensuring that all costs and investments are continuously scrutinized and prioritized
  • Winning culture. TDC will increase leadership capabilities, reinforce employee motivation, and continue to implement performance management across the organization.

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   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.