2009 Denmark - Telecoms, IP Networks, Digital Media and Forecasts

BuddeComm’s annual publication, Denmark - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in Denmark.

As with the other Scandinavian countries, Denmark has a sophisticated telecom market with competitive mobile and Internet sectors. The country enjoys the highest broadband penetration in the world, and though the fibre sector is immature there is considerable pressure from the government and municipal authorities for broadband data rates to be improved and so benefit from the considerable economic and social potential which can be gained.

In common with markets across Europe, Denmark has been affected by the economic downturn which resulted in a fall in GDP of more than 1% in 2008 and an anticipated 4% in 2009. This has resulted in lower overall investment: telecom investment, already below the EU average of about 3% of GDP, was expected to reach no more than about 1% of GDP in 2009. This decline has partly been the result of the liquidity crisis, but also the consequence of the mature domestic market, which has slowed major investments at home in favour of opportunities in less developed markets in other countries which can offer greater returns. A large part of planned or ongoing investments in infrastructure can be attributed to the roll-out of 3G networks, which are nearing completion. In coming years a greater proportion of investment in fixed networks will be by utility companies connecting households with fibre.

Denmark’s high broadband penetration, approaching 38% in mid-2009, is largely due to increasing competition, successful tax incentive schemes, the popularity of IP delivered content, and the fact that as a small country it is easy to cover with copper and fibre networks. In the mobile sector, GSM has showed little growth – indeed the GSM subscriber base of TDC and Telenor has fallen since early 2008, signifying customer migrations to 3G networks. Consequently, the 3G platform will be the main growth area in coming years, though operators are still challenged to develop business models which will translate the larger customer base into greater mobile data use, and thus higher ARPU.

Danish – key telecom parameters – 2008 - 2009

(Source: BuddeComm)

Key highlights:

·         The telecom market has become consolidated with larger international operators purchasing smaller players: three large Nordic operators together with their subsidiaries dominate the market, which has helped them package bundled services in a bid to attract and retain customers. By 2010 about 20% of broadband subscribers will have a bundled service, commonly triple-play.

·         The regulator’s auctioning of frequencies in the 2.5GHz band, expected in early 2010, will go far to advancing 4G (LTE and WiMAX) wireless broadband services as well as mobile TV. Five operators are anticipated to be licensed, securing competition in underserved rural areas.

·         A number of power companies operate fibre networks serving residential and business users, often in conjunction with government-sponsored rural broadband initiatives. These local operators are expected to pass about 1.2 million homes by 2015: the number of fibre subscriptions increased 23.2% in the year to January 2009, accounting for 4.3% of all broadband connections..

·         Digital switchover is set for November 2009. Frequencies for eight nationwide multiplexers for DTTV have been allocated, one to be used for mobile TV (DVB-H) from November 2010. It has not yet been decided whether the remaining digital dividend will benefit broadcasters or telcos (eg for mobile broadband applications), but Denmark will be ahead of most other European countries in being able to exploit spectrum for other uses in coming years.

Data in this report is the latest available at the time of preparation and may not be for the current year.