TDC: Increased earnings but continued pressure on revenue

Wednesday, November 5th, 2008
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TDC (Copenhagen:TDC)’s income before depreciation, etc. (EBITDA) increased by 4.4% to DKK 9.8bn during the first nine months of 2008 compared to the same period last year.


YouSee is the largest TV distributor in Denmark and provides TV signals for approximately 44% of all Danish households. YouSee offers cable TV, broadband services and telephony.

Customers (‘000) (end-of-period):

                                             Change in %
                                          3Q08 vs.  3Q08 vs.
               3Q 2007  4Q 2007  3Q 2008      3Q07      4Q07
               -------  -------  -------  --------  --------
TV customers     1,098    1,105    1,134       3.3       2.6

The new DTT gatekeeper will increase the competitive pressure on YouSee

YouSee is expected to face increasing competition from sources, also including DTT. Competition is driven by price, convenience and the range of channels offered. I/S DIGI-TV, an entity owned by the Danish state broadcasting services and TV2/Danmark A/S, launched DTT in March 2006, which utilizes digital technology to provide a greater number of channels and picture and sound enhancements such as HDTV and Dolby Digital through a conventional antenna. By the end of March 2008, Swedish operator Boxer was elected as commercial gatekeeper for DTT. Boxer has announced that they will offer 29 channels in multiple packets from November 1, 2009. From November 1, 2009, DIGI-TV will also utilize an additional multiplex that will double their current channel offering. All in all, the DTT network will be expanded, with up to 30-35 channels, by the end of 2009. The increased range of channels in the generally accessible terrestrial network will significantly increase competition. In the long term, increased competition in the Danish cable-TV market may also arise from new technology, mainly from future internet-based content providers. Failure by YouSee to meet these challenges may have a materially adverse effect on TDC’s market share of the Danish TV-distribution market.

More: Earnings Release