TDC grows in TV and home entertainment

TV and home entertainment will become even more important in TDC Group, Denmark’s leading telco. The company gained 76,000 new residential TV and broadband customers in Scandinavia in 2014, including 45,000 in Denmark.

The growing number of subscribers supports the company’s strong ambition to become Scandinavia’s leading provider of communications solutions and home entertainment. With the acquisition of Get, a Norwegian cable operator, the importance of content-related activities will grow, and TDC Group expects to derive close to a quarter of its total revenue in 2015 from TV, movies and other digital entertainment services.

TDC Group’s Annual Report for 2014, published today, shows earnings before income taxes, depreciations and amortisations (EBITDA) of DKK 9.8bn from total revenue of DKK 23.3bn.

“We are satisfied with meeting our financial targets for 2014. This included high cash flow generation, continued opex savings, and a substantial increase in TV and broadband customers in the Danish consumer market,” says CEO Carsten Dilling, TDC Group.

The company’s revenue declined 2.7% compared with 2013 while EBITDA was 1.8% lower than the year before.

Carsten Dilling emphasises four significant activities in 2014:

• The acquisition of Get and the ambition to become Scandinavia’s leading provider of communications solutions and home entertainment. TDC Group’s combined share of the TV market in Denmark and Norway now totals almost 40%

• The record-fast roll-out of the new national 4G network in Denmark

• The strategic cooperation with Trefor, a utility fibre operator, which manifests TDC Group as the largest fibre network provider in Denmark

• The launch of a number of new digital services and products such as the betting service bet25.dk and the new Play app for TDC and YouSee customers (more than 800,000 downloads since early October)

However, a number of areas were challenging especially in the mobile market, where price competition remained strong and TDC Group had a net loss of some 113,000 customers in 2014.

“Our focus on premium products in the price-competitive mobile market resulted in a drain of residential mobile customers, driven by competitors’ frequent price reductions. In the Danish business market, we were unable to turn the focus from pure pricing to quality and integrated solutions,” says Carsten Dilling.

He also notes that the Company’s call centres faced an extraordinarily high number of inbound calls during the year. Despite a substantial increase in the number of employees and improved efficiency in Channels during the year, many customers experienced long waiting times.

Regarding both the residential and business markets, Carsten Dilling says:

“Our strategic focus will consequently remain on seamlessly integrated solutions under the TDC+ programme, through which three strategic pillars have been formed to ensure customer satisfaction, growth and increased sales, as well as continuing process optimisation.”

The CEO of TDC Group notes that both the public and private sectors’ unilateral focus on low prices has reached an unsustainable level, leading to depressed profits and potentially lower investments among Danish telcos.

“Topping off with sector-specific merger control will hamper the continued development of the Danish digital infrastructure. Our very capital-intensive sector needs stable and predictable regulation and a public sector that also focuses on quality and innovation,” says Carsten Dilling.