9-708-414
REV: FEBRUARY 8, 2010
RAMON CASADESUS-MASANELL
CELSO FERNANDEZ
MORITZ JOBKE
Launching Telmore (A)
In September 2001, analysts were pessimistic about the future of the new no-frills entrants in the
mobile phone industry in Denmark (see Exhibits 1 and 2 for statistics on Denmark). Mette S. Ahorlu,
from IDC, claimed that the new entrants were not capable of attracting the profitable heavy users.1
Instead, new entrants were only drawing customers who could not afford additional services. “None
of these small companies will ever make a profit,” she claimed.2 Other experts echoed Ahorlu’s
concerns. They expected a shift toward value-added services in which new entrants would find it
difficult to compete.
Actual results supported the negative outlook. Telmore, the first mover and most promising of the
new entrants, had signed a mere 32,400 subscribers by June 2001, capturing a market share of 0.4%.
These figures were far from the 250,000 subscribers that some experts estimated to be the break-even
level for new service providers.3 Telmore had entered the Danish mobile telecom market in October
2000 as a service provider on the network of TDC, the dominant player. Telmore bought minutes
from TDC and resold them to end users in a no-frills service model.
The Danish mobile industry was rapidly evolving. New players were entering the market, and
new services were under development. Subscriber penetration had been increasing rapidly to 63% at
the end of 2000, and incumbents had spent a small fortune in upgrading their infrastructures to offer
additional functionality to customers. Many uncertainties surrounded Telmore: Was this market too
competitive and complex for a small start-up? Could Telmore find its niche in the market? And if so,
how much of a threat was Telmore to TDC?
Evolution of Mobile Phone Industry in Denmark
In the late 1990s, the mobile telecommunications industry grew rapidly across the world. In
Europe, the Nordic countries were leading the way in acceptance of wireless communications as
measured by mobile phone lines per resident. By 2000, penetration of the Danish mobile market had
jumped from 27% in 1998 to 63%, but Denmark still trailed its Nordic peers, among which Finland
was leading with 74%.4 By comparison, the United States had a wireless penetration of 39% in 2000.5
________________________________________________________________________________________________________________
Professor Ramon Casadesus-Masanell and Celso Fernandez (MBA 2007) and Moritz Jobke (MBA 2007) prepared this case. This case was
developed from published sources. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as
endorsements, sources of primary data, or illustrations of effective or ineffective management.
Copyright © 2007, 2008, 2010 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call
1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this
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mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.
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Launching Telmore (A)
As in the rest of Europe, the technical standard for mobile communication in Denmark was the
digital Global System for Mobile Communications, or GSM. The existence of a single standard
enabled travelers across Europe to access mobile services in any country and allowed handsets to be
used on all networks. GSM was generally referred to as a second-generation (2G) technology. GSM
networks were built through a cellular structure with radio towers at the center of each cell. The size
of an individual cell depended on factors such as physical profile of the cell, radio frequency, and
traffic volume and could range from several hundred feet to several miles.
While Denmark’s flat geographic profile allowed for a relatively efficient deployment of network
infrastructure, its low population density in some areas raised the necessary investments per user for
a full-coverage network. Building a network, hence, required substantial financial resources, making
the physical infrastructure by far the single largest asset of an operator. Industry experts estimated
that a basic GSM network plus radio licenses for a new entrant in Denmark would cost DKK1.5 to
DKK2.0 billion in 1998. Additional investments were required to add data services and maintenance
and to increase capacity for new subscribers and area coverage for scarcely populated areas. In fact,
market leader TDC Mobil spent DKK528 million in 1999 and DKK815 million in 2000 on its Danish
mobile network for capacity enhancement and mobile data services after having installed the initial
network in 1992 (900Mhz band) and 1997 (1800Mhz band).6 On top of the network infrastructure,
additional capital was required to fund complex customer care and billing systems, which in the case
of TDC Mobil were estimated to cost another DKK100 to DKK200 million.7 Equity analysts from
Danske Equities put a price tag of DKK2 billion to DKK3 billion on the greenfield infrastructure
investment for an average Danish GSM player.8
In addition to the network operators that owned the physical infrastructure, a number of service
providers had recently entered the market. Service providers offered mobile phone services to their
customers under their own brand, but actually used the vast majority of the network infrastructure of
one or more partnering operators and effectively resold their services. Service providers emerged for
two reasons: first, the Danish regulatory agency forced operators to open their networks for
competition and, second, service providers could offer network operators an additional distribution
channel to improve the use of their massive fixed-asset base.
In 2000, industry participants saw the future of mobile telecommunications primarily in the
opportunities offered by higher-bandwidth network standards such as GPRS and UMTS/WCDMA.
Higher data rates allowed operators to provide so-called value-added services such as mobile
Internet and e-mail, premium-content text messages, and video telephony, which were expected to
deliver substantial incremental sales over the voice- and text-message offering then in place. These
expected additional sources of revenue were also an important element in the stock-market valuation
of mobile operators.
The new services would not come for free: on the one hand, GPRS (which was considered a 2.5G
technology) required a relatively small additional investment in the network infrastructure that
enabled a six-fold increase in data transfer rates over GSM. On the other hand, UMTS/WCDMA was
based on a different technology and required an entirely new network and additional frequency
licenses, but offered data rates at least 40 times faster than GSM. UMTS frequency licenses were
expected to be on the auction block in Denmark in the fall of 2001.9 Because the capital requirements
for a full UMTS network were expected to significantly exceed those for a GSM network, operators
were under pressure to take a huge bet on the future direction of the market very soon.
2
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Players/Network Infrastructure
In 2000, four operators—TDC, Sonofon, Mobilix, and Telia—owned at least some network assets,
and a fifth, 3G, was about to complete its network infrastructure. With four 2G operators, Denmark
was already considered a crowded market. Similarly sized markets such as Finland and Norway only
had three and two operators, respectively. This structural feature of the market, combined with a
regulatory agency that aggressively enforced competition among players, had led to a relatively lowprice and high-usage environment in Denmark.10
TDC was by far the dominant player with 42% market share of subscribers (see Exhibit 3). It was
the mobile communications business of the former state-owned Tele Danmark. TDC provided
primarily fixed-line and wireless communication services in Denmark and had a sizable international
business that accounted for 41.5% of its revenues in 2000. The traditional domestic fixed-line
business, however, continued to be the major driver of operating cash flow with a 54% share of
EBITDA. The mobile business in Denmark contributed DKK4,232 million in revenues (9% of overall
revenues) and DKK1,524 million in EBITDA (12% of total) in 2000 (see Exhibit 4).11
The number-two player, Sonofon, with a 24% market share, was a joint venture between the
Norwegian incumbent telecommunications company Telenor, which owned 53.5%, and BellSouth,
which owned 46.5%. Telenor had acquired stake in Sonofon in June 2000 for DKK14.7 billion from
Danish GN (Great Nordic). Like TDC, Sonofon had entered the Danish GSM market in 1991 by
securing one of the two licenses initially granted.12
The number-three player, Mobilix, a joint venture of France Telecom’s Orange and several
financial investors, had entered the Danish market with its own network only in 1998 and had since
captured 15% of the market. By 2000, Mobilix’s network technically covered 89% of Denmark’s
population. Mobilix was known to be heavily EBITDA negative.13
Telium, the smallest Danish operator with an 8% share of subscribers, was a subsidiary of the
Swedish Telia. Telia had entered the Danish market in 1996, first using TDC’s network, then building
its own infrastructure. Telia’s Danish operations generated DKK377 million in sales and lost DKK398
million on an EBITDA basis in 2000.14
Among the existing service providers, only Debitel, a subsidiary of the German Debitel, had
reached a relevant market share of 5% of subscribers. Debitel was using the networks of both Sonofon
and TDC.
Products
The market for mobile telephony was split into two main segments, postpaid and prepaid,
depending on when the customer actually paid her usage charges. Postpaid customers entered into a
contract with their provider and received a monthly bill for their phone usage during the previous
billing period. The maximum permitted length of a postpaid phone contract in Denmark was six
months, after which a customer was free to either cancel or extend the contract for another six
months. Prepaid users maintained a cash balance with the provider from which usage charges were
deducted in real time. Customers could recharge this balance (“top-up”) by buying vouchers at cellphone shops and other retail locations like convenience stores or gas stations.
Just as in other European markets, Danish phone users paid only for outgoing calls. Incoming
calls were free of charge to the recipient. The recipient’s operator, however, demanded a so-called
termination fee from the operator of the caller. The termination fees for mobile networks were set at
3
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Launching Telmore (A)
approximately DKK1.1 per minute (DKK0.16 less than the previous year) and DKK0.1 per minute for
the wireline network in 2000 by the Danish telecommunications authority.15,16 Termination fees
accounted for 10% to 15% of an operator’s revenues.
Most rate plans charged the customers based on the actual length of their calls or the number of
text messages. Per-minute rates for calls varied by destination (same mobile network [“on-net”],
other mobile network [“off-net”], and fixed line) and time (weekday business hours, weekday
evenings/nights, and weekends). Off-net calls during peak hours were typically the most expensive,
and fixed-line calls during off-peak hours were the least expensive. The exact definition of on- and
off-peak hours varied by provider and sometimes even between rate plans of the same provider.
The customer and product segmentation was mainly driven by usage intensity. For low-call
volumes, selecting a prepaid rate plan, which came without a monthly subscription fee, was usually
the most economical choice for a customer. Once usage went beyond a certain threshold, however,
the benefit of the lower-per-minute prices of postpaid plans outweighed their monthly subscription
fee. Per-minute prices of postpaid rate plans typically declined as the monthly subscription fee
increased. Prepaid users generated, on average, lower revenues of DKK800 to DKK 1,400 per year in
2000, compared with the DKK3,500 to DKK4,500 of postpaid customers.17
Distribution Model
In 2000, mobile phone customers were almost exclusively acquired through retail stores in larger
towns and cities. Customers could walk into the store, browse the offering, and solicit advice on rate
plans and handsets. Once the customer chose a provider, rate plan, and handset, the sales assistant
would complete the necessary paperwork and hand out the cell phone and the provider’s SIM card.
The Danish market contained three types of shops. Operator-owned shops were those in which
the real estate was either leased or owned by the phone company and shop personnel were on the
payroll of the phone company. These shops were usually situated in premium locations, were
spacious and well-staffed, and offered only the rate plans of the particular operator. Exclusivebranded shops were similar to operator-owned stores in that they offered only the rate plans of one
phone company. They were, however, owned by a third party, were often slightly smaller, and were
located on less expensive real estate. Their owners regularly operated multiple shops that did not
necessarily all carry the same operator branding. Independent shops carried multiple-provider
brands and often displayed competing products next to one another. Both exclusive-branded and
independent stores had three sources of income: the ticket prices of the cell-phone packages that
customers purchased, commissions from providers for every rate plan sold, and a fixed fee from the
providers to support the shop’s local advertising activities.
When they signed up for the services of a provider, customers usually purchased a new handset.
Because the cost of most handsets was still prohibitively high, providers heavily subsidized the retail
ticket price by providing certain handsets at a steep discount to the shops. Handset subsidies
accounted for most of a provider’s subscriber acquisition costs, which on average were DKK400 to
DKK600 for prepaid customers and DKK1,300 to DKK1,600 for postpaid customers.18 To prevent
customers from using a subsidized handset with an SIM-card of another operator, providers applied
a so-called SIM-lock to the handset itself. This feature was intended to prevent the handset from
functioning with SIM-cards other than the provider’s own cards. Yet instructions on how to disable
SIM-locks were widely available; hence, the cost-effectiveness of the mechanism was debated.
4
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Launching Telmore (A)
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Telmore
Telmore entered the Danish mobile telecom market in October 2000 as a service provider on
TDC’s network. It was founded by a team led by Frank Rasmussen and located on the outskirts of
Copenhagen.
Agreement with TDC
Before its launch, Telmore had struck an agreement with TDC to act as a service provider on
TDC’s network. TDC would charge Telmore a certain price per minute for using TDC’s network.
Wholesale prices varied significantly depending on the destination of the call and the time of the day.
Telmore would pay only DDK0.26 per minute for a call made inside TDC’s network at night, while
the price for an off-net call at peak hours would rise to DKK1.40 per minute. According to some
estimates, Telmore was paying an average of DKK0.50 per minute (see Exhibit 5). The wholesale cost
of a text message was roughly DKK0.18. Once Telmore reached a certain call volume threshold, the
price per additional minute on TDC’s network would start to decline. It was estimated that this
[discount would reach up to 20%] if Telmore reached 500,000 subscribers (see Exhibit 6).
Product
Telmore launched with only one rate plan. It was designed as a prepaid plan and charged a price
of DKK1.25 per minute for all national calls at all times and did not entail a monthly subscription fee.
The plan offered a price approximately 40% lower than that of other prepaid rate plans at the time.
The price for a text message was also low, DDK0.25 per message. Telmore’s price policy was notable
for two reasons. First, it represented a radical departure from the traditional approach of providing
multiple, more or less complex price plans tailored to different calling patterns. Second, Telmore
suffered a mismatch between a fixed revenue per minute and a widely variable wholesale cost per
minute depending on the destination and time of the call.
For their new Telmore connection, customers could choose to either be assigned a new telephone
number or carry over their existing number from another provider. The latter option had been made
possible by regulatory rules that mandated so-called mobile number portability to enhance effective
competition of providers.
Advertising
As a start-up, Telmore did not have the means to launch repeated conventional advertising
campaigns that could rival those of existing national providers. During the launch period, an ad was
aired on Danish television that emphasized Telmore’s cheap price and ease of use. The ad’s
catchphrase was simple: “I have just switched to Telmore.dk. The absolute cheapest pay as you go.”
After the launch, Telmore bet heavily on guerilla marketing campaigns. For example, in 2001
Telmore used posters showing a hand wiping dog excrement off a shoe with a prepaid card. On the
prepaid card, it was written: “Shit on your mobile operator, it pays off.” In another stunt, Telmore
parked a scooter in the private parking place of TDC’s CEO with “Minutes for a nickel, company car
of tinplate” written on it. When the police were called to remove the vehicle, they refused to do so at
first because the scooter did not qualify as a car and, hence, did not warrant towing. These stunts
were covered in the Danish press, giving Telmore plenty of publicity.
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Launching Telmore (A)
Distribution
Telmore did not have any physical retail network for distribution, but relied on an Internet-only
sign-up model. Its Web site was structured in a simple and intuitive fashion requiring just four steps
to register as a customer. After the sign-up was completed, Telmore would mail the SIM-card and a
simple manual to the new customer.
Telmore did not offer any handsets or any subsidies to its customers. Instead, Telmore relied on
customers being able to use their existing handset, which included the possibility that customers
would have to “unlock” their handset and use it with Telmore.a
Billing and Customer Care
Contrary to market practice, Telmore provided only one payment option: prepaid billing. In a
departure from the traditional prepaid model and its physical sale of top-up vouchers, Telmore
required its customers to reload their balance online by credit card, bank transfer, or an automatic
direct debit (a common practice for utilities in Europe). Additionally, for customers with a positive
payment history, outgoing calls would not be blocked once the customer’s balance had been
depleted; instead, the customer would be provided with a credit of up to DKK200 combined with
text-message reminders.
Telmore users did not receive paper bills. Instead, their balance of minutes was updated several
times daily online. Customers who wanted a physical copy of their statement could download a bill
in PDF format and print it.
Another limitation was the availability of customer-service reps. Telmore decided to have its own
customer-service center, but operators were available only from 8 a.m. to 10 p.m. on weekdays and
9 a.m. to 5 p.m. on weekends; traditional operators like TDC typically offered 24/7 customer
service.19
The company’s Web site was designed to funnel users to Web chat or e-mail for problem
resolution rather than phone-based or mail solutions. This was accomplished by making customerservice numbers and addresses difficult to find on the Web site, and by letting customers know that
response times were longer for those channels.20
Telmore cross-trained its staff to provide customer service in the event of a spike in demand.
It used a “red alert” system whereby if customer-service reps became overburdened, additional staff
from other functional areas would drop what they were doing and help provide customer service.
Even Frank Rasmussen, founder and CEO, answered the phone when the volume of incoming calls
spiked. This practice allowed Telmore to maintain much leaner customer-service staffing levels while
providing equivalent levels of service from a customer wait-time metric. Rasmussen claimed that the
company could serve 20,000 customers per rep versus only 2,000 for U.K.’s MVNO Virgin Mobile.21
Telmore used nonunionized students as its customer-service reps, with an average age of 24.22
These reps received a bonus, encouraging friendly, attentive, and fast customer service.23 Early on,
customer satisfaction was promising, but Telmore’s ability to provide the same level of service to a
wider customer base was uncertain.24
a Cell phones are typically “locked,” meaning that they only work with the issuing service provider. It was possible, however,
to unlock a phone by either entering a special code into it or reprogramming its firmware. Numerous Web sites such as
http://www.online-unlock.dk (promoted by MVNOs such as Telmore and CBB) offered unlocking services for a small fee
(about 5 EUR).
6
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Infrastructure
As a service provider, Telmore did not own or operate any network infrastructure. Its operations
were thus reduced to customer acquisition, billing, and after-sale service. The company, with this
“bare-bone” infrastructure, was launched with only seven employees in 2000.
Because Telmore operated only a small subset of the functions of a network operator, its IT
operations were much simpler and required significantly less up-front investment. The company
owned a call rating and billing engine bundled with a CRM system, a voice-mail system, and a
customer acquisition and customer care Internet application only. The simplicity of Telmore’s
product offering further reduced the complexity of its IT needs compared with those of the system
architecture of traditional providers.25
A service provider bought bulk-minutes from the network operator and was billed according to
the purchase agreement. In order to bill its own customers and gather information about their calling
behavior, the network operator provided the service provider with call data records (CDR) that
contained each call’s essential information (both parties’ ID, time, and length). The service provider’s
rating engine interpreted this data and forwarded the price to the billing system. In a prepaid system
like Telmore’s, the call price was then deducted from the customer’s balance. With this mechanism
having to work essentially in real time, performance and scalability were key variables. When
Telmore realized that its original solution was unable to handle more than 30,000 customers, it took
the unusual step of developing a proprietary IT solution rather than purchasing one from a thirdparty provider. With a mere four people, Telmore developed its own IT system in less than six
months. The system proved to be so efficient and scalable that Telmore eventually decided to spin off
the system as a stand-alone company, CDRator, which developed its own business.
Human Resources
When Telmore was founded in 2000, it benefited from the buzz surrounding start-ups and built a
team of young, entrepreneurial, and qualified people. Because resources were limited, Telmore tried
to develop versatile employees, kept a flat organization, and shared profits with employees.
Throughout its organization, Telmore tried to avoid the development of specialized job
descriptions. Its IT employees, for instance, were mostly generalists who rotated through various
projects. By contrast, the infrastructure of a traditional operator would require a deep functional
expertise because of the sophistication of the processes and products offered. Generalists at Telmore
mastered most tasks, resulting in lower staffing levels, improved coordination across specialty areas,
and likely improved job satisfaction through greater task variety. Similarly, Telmore had only one
type of call-center operator—a generalist. Call centers of established operators typically had several
lines of operators who could address complex problems that the generalists were unable to handle.26
Owing partially to its short history and lean size, Telmore did not have much hierarchy between
CEO and call-center operators. Moreover, Telmore made sure that every single employee felt like an
integral part of the company. Operators were frequently asked to take part in cross-functional
projects intended to optimize processes across different groups or to further product development.
Shared economic rewards were also important to Telmore. Every year, 5% of the company’s
profits were shared equally among all of its employees. This practice helped build a sense of
community and created additional flexibility in Telmore’s cost structure.27 (See Exhibit 7 for
Telmore’s value chain.)
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Launching Telmore (A)
Early Results
The launch of Telmore was far from a success. Not only was it capturing a limited number of
customers, but these customers were spending less (see Exhibit 8). The average Telmore customer
was spending about DKK100 per month compared with TDC’s average of DKK230 per month.
Although some of the difference resulted from lower prices, Telmore customers used an average of
20% to 25% fewer minutes than TDC’s typical customers.28
Many uncertainties remained. It was clear that the customer base was insufficient to run a
successful business. Management was confident in its ability to keep costs under control and “break
even” with a small customer base (see Exhibit 9). However, the company’s ability to attract
customers was under question. Telmore was already providing significant discounts over TDC. Was
it too early to judge Telmore? Would further price reductions attract more customers, or would they
just squeeze margins? Would Telmore be able to attract valuable customers or just marginal
segments? Analysts had already made up their minds. European incumbents were paying close
attention to the Danish market to understand the magnitude of this new threat. Luckily for them,
there were very few reasons to be scared thus far.
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Exhibit 1
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Map of Europe
Source: University of Texas Libraries Web site, http://www.lib.utexas.edu/maps/europe/europe_pol_2004.jpg.
Courtesy of the University of Texas Libraries, The University of Texas at Austin.
Exhibit 2
Map of Denmark
Total Area: 16,638 sq. mi. 43,094 sq. km.
(slightly less than twice the size of
Massachusetts)
Population: 5,336,394 (July 2000 est.)
Languages: Danish, Faroese, Greenlandic
(an Inuit dialect), and German (small
minority). English is predominant
second language.
Literacy: 100%
Life Expectancy: 73.95 male, 79.27 female
(2000 est.)
GDP (per capita): $23,800 (1999 est.)
Currency:
Danish
1€ = 7.45 DKK
Kroner
(DKK).
Source: Gurteen Knowledge Web site, http://www.gurteen.com.
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Exhibit 3
Launching Telmore (A)
Penetration and Market Shares (subscribers '000)
H1 2000
1,420
790
450
208
2,869
TDC
Sonofon
Mobilix
Telia
Total network operators
Debitel
Telmore
Others
Total service providers
Total mobile subscribers
Mobile penetration
H2 2000
1,578
875
517
297
3,267
H1 2001
1,520
891
552
295
3,258
144
0
9
152
215
3
58
276
255
32
114
402
3,021
57%
3,543
66%
3,660
68%
Source: National IT and Telecom Agency, http://www.itst.dk, accessed April 2007, and “TDC,” Danske Equities, 2003, p. 4.
Exhibit 4
Mobile Telecommunications Financials, 2000 (DKK, millions)
TDC Mobil (domestic)
Sonofon
Mobilix (estimated)
Telia
Revenue
4,232
3,096
900 - 1,100
484
EBITDA
EBITDA-margin
1,524
36%
720
23%
negative
(511)
(105%)
Capex
815
278
Source: Annual Reports, SEC 20-F filings.
Exhibit 5
Off net
On net
Fixed line
TDC Wholesale Price (DKK per minute)
Off peak
0.70
0.26
0.26
Peak
1.40
0.52
0.52
Source: Compiled by casewriters based on data from the Danish National IT and Telecom Agency.
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Launching Telmore (A)
Exhibit 6
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TDC Wholesale Price Structure, 2001 (DKK per minute)
Price
Retail price
~ 0.50
Wholesale price
~ 0.40
~ 500.000
subscribers
Volume
Source: Compiled by casewriters.
Exhibit 7
Unusual Features in Telmore’s Value Chain
Firm
Infrastructure
• Low overhead
• Fun working environment
• Community presence
Human Resource
Management
• Cross functional generalists
• Young workers
• Non unionized
• Incentive program (5%profits)
• Non hierarchical environment
• Diversity of projects
Technology and
IT
• Proprietary billing system
• Highly scalable
• Simple processes
• Focus on automation
•
•
•
•
•
•
•
•
Guerrilla marketing
No subsidies for handsets
Unlocking tours
Easy sign up through
internet
Transparent pricing
One price plan
Few services
Lower ARPU customers
Marketing and
customer acquisition
• High level of cooperation
• Low turnover (5-10%)
M
a
r
g
• Full mobile
functionality
• No network
• Lean operations
• Scalability
Operations
• Advanced payment
• Bank authentification
• Low fraud and credit
risk
• No bills
• No vouchers
• SMS balance alert
Billing
& Collection
• Free call center 9 – 21
• Reduced # rep/customer
• Significant use of email
and chat
• High incentives for reps
• Responsibility of all
employees
After-Sales Service
Source: Compiled by casewriters.
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i
n
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Exhibit 8
Launching Telmore (A)
Average Usage per Customer (units per month)
Minutes
TDC
Sonofon
Orange
Telia
Debitel
Telmore
H2 2000
70
81
70
53
63
22
H1 2001
70
94
54
47
50
54
Text messages
TDC
Sonofon
Orange
Telia
Debitel
Telmore
H2 2000
15
31
35
17
47
22
H1 2001
20
41
35
18
38
65
Source: Compiled by casewriters.
Exhibit 9
Profitability Estimates ('000 DKK per year, except for subscribers)
Subscribers
Revenue
Traffic costs
Other costs
25,000
21,750
13,050
13,607
50,000
43,500
26,100
19,439
EBITDA
(4,907)
(2,039)
100,000
87,000
52,200
29,453
200,000
174,000
104,400
53,550
400,000
348,000
208,800
107,100
5,348
16,050
32,100
Source: Compiled by casewriters.
12
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708-414
Notes
1
“Small Danish mobile companies only winning tiny market shares,” Børsen, September 12, 2001, p. 7.
2
Ibid.
3
Ibid.
4 “Nordic Telecom Weekly—No big bangs,” Danske Securities, September 7, 2001, p. 12, via Thomson
Research/Investext, accessed May 2007.
5 “Wireless Telecom Industry: Our Updated Outlook,” Prudential Securities, April 4, 2001, p. 27, via
Thomson Research/Investext, accessed May 2007.
6
TDC, 2000 Annual Report (Copenhagen: TDC, 2001), p. 35, http://tdc.com/publish.php?dogtag=tdccom_
ir_report_an_pre.
7
Ibid., p. 42.
8 P. Jessen and L. Horslund, “TDC—Trojan horses—a case study of the Danish mobile market,” Danske
Equities Company Report, November 26, 2003, p. 9, via Thomson Research/Investext, accessed November 2006.
9
TDC, 2000 Annual Report, p. 19, http://tdc.com/publish.php?dogtag=tdccom_ir_report_an_pre.
10 Michael Clemens, “Tele Danmark (TDC.CO),” Carnegie Company Report, January 25, 2000, p. 9,
via Thomson Research/Investext, accessed April 2007.
11
TDC, 2000 Annual Report., pp. 30-31, http://tdc.com/publish.php?dogtag=tdccom_ir_report_an_pre.
12
Telenor, 2000 Annual Report (Oslo: Telenor, 2001), p. 26, http://www.telenor.com/ir/reports/.
13
France Telecom 20-F filing, May 29, 2001, p. 29, via Thomson Research, accessed February 2007.
14
Telia, 2000 Annual Report (Stockholm: Telia, 2001), p. 9, http://www.teliasonera.com/reportarticle/0,28
65,l-en_h-13603,00.html.
15 David Rogerson, “The regulatory context for fixed mobile interconnection,” a presentation to the ITU
workshop, Ovum, September 2000, p. 8,
http://www.itu.int/osg/spu/ni/fmi/workshop/rogerson.pdf,
accessed April 2007.
16 Status 99. Chapter III – Status of the Telecommunications Sector Development. 4.6. Interconnect prices,
IT-og Telestyrelsen Minissteriet for Videnskab Teknologi og Udvikling, http://www.itst.dk/wimpdoc.asp?
page=tema&objno=95027905#III46, accessed April 2007.
17
WestLB, “Nach dem Goldrausch—Mobile Telekommunikation nach den Auktionen,” April 2001, p. 135,
via Thomson Research/Investext, accessed April 2007, and Bear Stearns, “The Cellular Review—November
2000,” Issue Three, November 22, 2000, pp. 36–37, via Thomson Research/Investext, accessed April 2007.
18
Ibid.
19
Telmore Web site, https://www.telmore.dk/help/index.jsp, accessed November 2006.
20
Telmore Web site, https://www.telmore.dk, accessed November 2006.
21 “The future or just another bubble?” Mobile Communications International, April 1, 2005, via ABI/Inform,
accessed November 2006.
22
Telmore Web site, https://www.telmore.dk/about/jobs.jsp, accessed December 2006.
23
Ibid.
24
Telmore Web site, https://www.telmore.dk/about/theCompany.jsp, accessed December 2006.
13
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708-414
Launching Telmore (A)
25
M. Conradi et al, “Mobile Virtual Network Operators: Key Issues,” Mondaq Business Briefing, March 3,
2006, http://www.mondaq.com/
26
N. Aquino, “More prefer no-frills phone service,” BusinessWorld, January 18, 2005, p. 17.
27
“Stor uenighed i Telmores ejerkreds,” Børsen, 20 September 2004.
28
P. Jessen and L. Horslund, “TDC—Trojan horses—a case study of the Danish mobile market,” Danske
Equities Company Report, November 26, 2003, pp. 4–5, via Thomson Research/Investext, accessed November
2006.
14
This document is authorized for use only in Debtanu Lahiri, Alison Holm's 2584-Strategy TA-TE at Universidade Nova de Lisboa (UNL) from Jan 2024 to Jul 2024.