Denmark - Telecoms, IP Networks, Digital Media

Utilities spearheading FttH growth to meet ambitious broadband targets

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 one of Europe’s smaller telecom markets which remains at the forefront of developments in services and innovation. The report includes the regulator’s market data for 2010 as well as operator data to June 2011.

Denmark’s competitive telecom market has developed among the highest mobile and internet penetration rates in Europe. Although the fibre sector is still developing, it has been stimulated by considerable pressure from the government and municipal authorities which are keen to push through higher broadband data rates. The regulator has facilitated this by instigating a number of measures to facilitate fibre networks builds, with a view to establishing a 50Mb/s service for households across the country by 2013 and wide-scale Fibre-to-the-Home (FttH) services capable of 1Gb/s by 2020.

In addition to network investments by the major telcos, there were also major commitments by privatised power companies in developing fibre networks serving residential and business users within their respective supply areas. These are often undertaken in conjunction with rural broadband initiatives promoted by local and regional governments. These utilities are expected to pass about 1.2 million homes by 2015.

Following a poor performance in both 2008 and 2009, Denmark’s economy has since recovered, with a 2% growth projected for 2011. The economic climate has been mirrored in the telecom sector, with lower revenue since 2007 expected to show slight growth from 2011. Telecom investment has nevertheless been stimulated by operators focussing on upgrades to their mobile networks as well as both telcos and utilities developing fibre networks. These will enable the government to meet its broadband plans by 2020, as well as allow operators to satisfy consumer demand for higher bandwidth and to exploit the revenue potential derived from future services which can be carried on these upgraded networks.

In the mobile sector, the award of 2.5GHz spectrum in 2010 allowed TDC to launch LTE services in this band by the end of the year. LTE has become a cornerstone of TDC’s strategy. TeliaSonera expected to cover 75% of the population with LTE by the end of 2011, while H3 also planned to roll out LTE networks in both Sweden and Denmark by the end of the year, providing download speeds of up to 100Mb/s. Given the government’s commitment to providing high-capacity national broadband services, LTE is set to be a main growth area in coming years.

Denmark was one of the first countries in Europe to deploy digital TV services on cable and satellite, while ASO was reached at the end of 2009, before most European markets. Four of the eight nationwide multiplexers went live by the end of 2010: five are assigned to broadcasters (with mobile TV options), one for mobile services, and two remain in digital reserve for trial and innovation. In common with other European countries demand for mobile TV is low.

Table 1 - Key telecom parameters – 2010; 2012

(Source: BuddeComm)

 Market Highlights

• The auctioning of frequencies in the 2500-2690MHz and 2010-2020MHz bands in 2010 released much needed spectrum for 4G wireless broadband services. All MNOs will use their spectrum allocations for LTE, supplementing fixed-line broadband in rural areas. Terms for the spectrum licences, being valid until 2030 and with no requirements for geographical coverage or deadlines for roll-out, have benefitted operators looking for business conditions sympathetic to long term investment.
• The cable sector has been consolidated to two main players: TDC’s YouSee and Stofa, which in early 2011 bought the Danish cable interests of the Telenor-owned Canal Digital. The acquisition brought it 633,000 households that receive their signals as part of agreements with local antennae associations. These operators now have greater scale to invest in DOCSIS3.0 technology and so retain customers in areas where FttH is being rolled out.
• The government during 2010 set in train a number of legislative measures to facilitate municipal access to fibre infrastructure in a bid to ensure that 80% households have a 50Mb/s service by 2013, and that 1Gb/s services are widely available by 2020. Sympathetic regulatory treatment will propel the fibre sector in coming year, with Denmark expected to have among the more concentrated FttH networks in Europe within the next decade.