800 MHz Auction Auction of frequencies in the frequency bands 791-821 MHz and 832-862 MHz

Information Memorandum Annex D: Overview of the Danish telecoms market

Draft November 2011

Issued by The Danish Telecommunication Authority Denmark

www.itst.dk

Annex D: Overview of the Danish telecoms market

This annex provides an overview of the Danish economy and demographics, the fixed telecommunications market, mobile telecommunications market and the wireless broadband market.

D.1 The Danish economy and demographics

Key indicators for the Danish economy Population (1 January 2011) GDP (2010) GDP per capita (2010) Total area Real GDP growth per capita (2010) Unemployment rate (2010) Inflation rate, consumer prices (2010) Balance of payments, current account, net (2010) Figure D.1: 5 560 628 DKK 1 746 billion DKK 313 947 43 098 km 2.1% 6.0% 2.3% 5.5% of GDP
2

Key indicators for the Danish economy [Source: Statistics Denmark, Statistical Yearbook, 2011]

Urban/rural area Greater Copenhagen Other urban areas with: over 100 000 inhabitants 10 000-99 999 inhabitants 1 000-9 999 inhabitants 500-999 inhabitants 200-499 inhabitants Rural districts No fixed address Figure D.2:

Population 1 199 224

% of population 21.6%

Cumulative % of population 21.6%

520 869 1 486 441 1 210 403 220 899 192 417 721 935 8 440

9.4% 26.7% 21.8% 4.0% 3.5% 13.0% 0.2%

30.9% 57.7% 79.4% 83.4% 86.9% 99.8% 100.0%

Danish population distribution per 1 January 2011 [Source: Statistics Denmark]

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Annex D: Overview of the Danish telecoms market

D.2 The Danish fixed telecoms market

Operator TDC Telia Telenor Others Figure D.3: Market share 79,8 % 10,3 % 5,9 % 4,0 % Market shares of fixed line operators at the end of the first half of 2011 [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

Denmark has one of the highest broadband penetration rates in the world, at 38.5 per 100 inhabitants at the end of the first half of 2011. Figure D.4 provides key indicators for the Danish fixed telecoms sector.
Category Subscriber lines fixed network (1000s) Subscriber lines per 100 inhabitants Outgoing fixed line traffic including IP telephony (million minutes) Outgoing fixed line traffic excluding IP telephony (million minutes) Broadband subscriptions (1000s) Broadband subscriptions per 100 inhabitants xDSL subscriptions (1000s) Cable modem subscriptions (1000s) IP telephony subscriptions IP telephony traffic (million minutes) Figure D.4: 2008H2 2 491 45,2 4 103 3 481 2 026 36,8 1 244 539 484 623 2009H1 2 251 40,8 3 766 3 014 2 051 37,2 1 245 541 629 752 2009H2 2 062 37,2 3 440 2 647 2 080 37,6 1 251 549 713 793 20101H 1 905 34,4 3 374 2 469 2 114 38,1 1 240 554 761 906 20102H 1 796 32,3 3 119 2 206 2 150 38,7 1 243 559 814 914 2011H1 1 654 29,7 2 978 2 005 2 143 38,5 1 219 563 882 973

Key indicators for fixed telecoms sector in [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

A number of different technologies are being offered in the Danish market, including digital subscriber lines (DSL), cable, satellite and fibre-to-the-home/building/cabinet (collectively referred to as FTTx). As of July 2011, approximately 9% of broadband subscribers were connected using FTTx technologies. Just under 90% of these are fibreto-the-home (FTTH) connections. Figure D.5 below shows the growth in FTTx connections in Denmark.

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Annex D: Overview of the Danish telecoms market

200 180 160

10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 2. H. 2007 1. H. 2008 2. H. 2008 1. H. 2009 2. H. 2009 1. H. 2010 2. H. 2010 1. H. 2011

Fibre subscriptions (1.000)

140 120 100 80 60 40 20 0

Fibre subscriptions to business customers Fibre subscriptions to private customers The fibre market's share (excluding FibreLAN) of the total broadband market

Figure D.5:

The Danish fibre market from 2007 to 2011 [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

To date, most of the FTTH connections in Denmark have been supplied by utility companies. Figure D.6 below shows the market shares of the principal service providers.
FTTH provider SE (SydEnergi) Waoo! (Waoo!, Dansk bredbnd) EnergiMidt TRE-FOR Bredbnd Altibox NRGi Bredbnd Nord TDC (Dansk KabelTV, TDC, YouSee) stjysk Energi Sydfyns Intranet Verdo Tele vrige I alt Figure D.6: Market share 18,8% 15,9% 15,2% 12,2% 5,5% 5,1% 5,0% 4,9% 4,3% 3,5% 3,2% 6,3% 100,0 % Market shares of the principal FTTH service providers in Denmark at the end of the first half of 2011 [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

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Annex D: Overview of the Danish telecoms market

D.3 The Danish mobile telecommunications market

The mobile market in Denmark has grown steadily in recent years, increasing from 5.5 million subscribers (100 subscriptions per 100 inhabitants) in 2005 to a level of almost 7.9 million subscribers (141 subscriptions per 100 inhabitants) by the end of the first half of 2011. Figure D.7 provides key indicators for the Danish mobile telecoms sector.
Category Mobile subscriptions (1000s) Mobile subscriptions per 100 inhabitants Mobile broadband subscriptions (1000s) Outgoing mobile traffic (million minutes) SMS sent (millions) MMS sent (1000s) Portings mobile (1000s) Figure D.7:
1

2008H2 6 865 124,6 308 4 900 6 346 36 272

2009H1 7 018 127,1 418 5 094 6 473 34 281

2009H2 7 421 134,1 587 5 272 6 583 41 302

2010H1 7 655 138,1 740 5 490 6 621 40 355

2010H2 7 790 140,1 791 5 835 6 408 45 395

2011H1 7 873 141,4 846 6 080 6 167 43 482

Key indicators for mobile telecoms sector in Denmark [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

There are currently four mobile network operators in Denmark but more than 30 mobile service providers including mobile virtual network operators (MVNOs). Figure D.8 below shows the number of mobile telephony subscriptions (exclusive subscriptions for telemetry and data-only subscriptions for mobile broadband) and the market shares for the principal mobile service providers.
Mobile service provider Subscriptions (1000s) 2010H1 TDC Telenor Telia Hi3G Lebara Others Total Pre-paid Figure D.8: 2 893 1 952 1 366 336 215 152 6 915 1 076 2010H2 2 928 1 848 1 317 398 219 288 6 999 1 013 2011H1 3 084 1 812 1 282 439 211 199 7 027 1 011 2010H1 41,8% 28,2% 19,8% 4,9% 3,1% 2,2% 100,0% 15,6% Market share 2010H2 41,8% 26,4% 18,8% 5,7% 3,1% 4,1% 100,0% 14,5% 2011H1 43,9% 25,8% 18,2% 6,2% 3,0% 2,8% 100,0% 14,4%

Subscriptions and market shares for the principal mobile service providers in Denmark [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

Includes data-only subscriptions in the form of data expansion cards and USB modem for computers.

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Annex D: Overview of the Danish telecoms market

Three of the existing mobile operators use spectrum in both the 900 MHz and 1800 MHz bands, although their assignments vary. On the basis of a change to the GSM Directive, the National IT and Telecom Agency issued a Decision on 23 December 2009 regarding the re-farming of the existing licences in the 900 MHz and 1800 MHz bands. An auction was held over the re-farmed frequencies in the 900 MHz and the 1800 MHz bands and the licences were awarded to Hi3G in October 2010. Figure D.9 below shows the current spectrum assignments to each operator in the 900 MHz and 1800 MHz bands.
Mobile service provider TDC Telenor Telia Nttjnster Norden Hi3G Figure D.9: 900 MHz 29,0 MHz 29,0 MHz 211,8 MHz 25,0 MHz
2

1800 MHz 221,8 MHz 219,4 MHz 223,6 MHz 210,0 MHz

Existing spectrum assignments in the 900 MHz and the 1800 MHz bands [Source: the National IT and Telecom Agency, 2010]

Currently each of the five UMTS mobile operators, Telenor, Telia Nttjnster Norden, Hi3G and TDC, have assignments of 215 MHz of UMTS paired spectrum in the 1900 MHz and the 2100 MHz bands and 15 MHz of unpaired spectrum in the 1900 MHz band3. Furthermore, in June 2010 the National IT and Telecom Agency has issued licences in the frequency bands 2500-2690 MHz (the 2.5 GHz band) on the basis of an auction. Figure D.10 below shows the spectrum assigned to each operator in the 2.5 GHz band.
Mobile service provider Hi3G TDC Telenor Telia Nttjnster Norden Figure D.10: 2.5 GHz 210 MHz paired spectrum and 25 MHz unpaired spectrum 220 MHz paired spectrum 220 MHz paired spectrum and 10 MHz unpaired spectrum 220 MHz paired spectrum and 15 MHz unpaired spectrum

Spectrum assignments in the 2.5 GHz band [Source: the National IT and Telecom Agency, 2010]

It is noted, however, that Telia in Greater Copenhagen must respect Banedanmarks usage of 1 MHz (including guardband) to the s-train radio. When Banedanmarks licence in the 900 MHz band expires, is revoked or is returned, Telia will dispose of 11.8 MHz in the entire country.

It may also be mentioned that Nordisk Mobiltelefon Danmark A/S has a CDMA licence in the 450 MHz band.

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Annex D: Overview of the Danish telecoms market

D.4 The wireless broadband market

A number of wireless broadband networks currently operate in Denmark. These are used to offer both mobile and fixed wireless broadband. This section provides a brief overview of the fixed wireless broadband market The mobile broadband market in Denmark continues to grow rapidly in 2011 (see Figure D.11 below). The total number of mobile broadband subscriptions exceeded 4 million by the end of the first half of 2011. Amongst these, almost 850 000 were data-only subscriptions, in the form of data expansion cards and USB modem for computers.

4.500

Mobile broadband - subscriptions (1.000)

4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 2010H1 Dedicated data subscriptions 2010H2 2011H1 Datasubscriptions which also allow speech

Figure D.11:

Wireless broadband subscribers [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

The volume of broadband data traffic generated by mobile users in Denmark has risen rapidly. 11 300 million megabytes of data (excluding SMS and MMS) were generated by mobile broadband users in the first half of 2011. It is estimated that more than 82% of usage was generated by data-only subscriptions. Figure D.12 shows the number of subscriptions, traffic generated and market shares for the principal service providers of data-only mobile broadband subscriptions, while Figure D.13 shows the same data for the principal service providers of mobile broadband subscriptions that include voice.

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Annex D: Overview of the Danish telecoms market

Mobile broadband service provider TDC Hi3G Telenor Telia Others Total Figure D.12:

Subscriptions (1000s), 2010H2

Market share of subscriptions

Traffic, total for 2010H2 (million MB)

Market share of traffic

290 247 168 132 10 846

34,3 % 29,2 % 19,8 % 15,6 % 1,2 % 100 %

1 298 4 536 1 468 1 919 84 9 305

13,9 % 48,7 % 15,8 % 20,6 % 0,9 % 100 %

Mobile broadband subscriptions, data-only subscriptions, data traffic and market shares for the principal service providers in Denmark, first half of 2011 [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

Mobile broadband service provider TDC Telenor Telia Hi3G Others Total Figure D.13:

Subscriptions (1000s), 2010H2 1 458 705 629 346 52 3 190

Market share of subscriptions 45,7 % 22,1 % 19,7 % 10,9 % 1,6 % 100 %

Traffic, total for 2010H2 (million MB) 454 388 450 696 8 1 995

Market share of traffic 22,7 % 19,4 % 22,5 % 34,9 % 0,4 % 100 %

Mobile broadband subscriptions, data subscriptions including voice, data traffic and market shares for the principal service providers in Denmark, first half of 2011 [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

The majority of fixed wireless broadband connections in Denmark are provided by WiMAX networks. It is estimated that such networks are currently available to around 90% of the Danish population. Figure D.14 below shows the number of subscriptions and market share of the principal WiMAX service providers.

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Annex D: Overview of the Danish telecoms market

WiMAX operator ELRO Others Total

4

Subscriptions (1000s) 38 0 38

Market share 98,8 % 1,2 % 100,0 %

Figure D.14:

Subscriptions and market share of the principal WiMAX service providers in Denmark first half of 2011 [Source: Telecom Statistics first half of 2011, the Ministry of Business and Growth]

The total is due to rounding up to the nearest thousand.

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