Broader appeal Dansk Kabel TV

BOARDER APPEAL

Dansk Kabel TV A/S is a strong market player in the provision of networks and communications solutions in many segments of the Danish domestic market. Philip Yorke talked to Flemming Hynkemejer, Dansk Kabel’s CEO, about the company’s broad range of innovative telecoms products and installation services and its strategy for future growth.

Dansk Kabel TV’s roots can be traced back to the very earliest days of the cable network (CATV) industry in the late 1960s. Dansk Kabel TV is a fully owned subsidiary of the Danish incumbent telco operator TDC A/S, which is one of the top-performing players in the European telecoms market with a range of comprehensive installation services and products. Dansk Kabel TV operates in two key product areas: building cable and telecommunications networks on various technologies for MDUs (multiple dwelling units), landlords or antenna associations and in providing telecommunications services such as broadband and VoIP products. The company has a customer base of around 400 MDUs and associations and covers more than 400,000 households.

Dansk Kabel TV is an integral part of the Danish TDC Group, which offers services ranging from the provision of telephony, Internet, TV and data communications, as well as integrated hosting solutions and related content services. In 2010 the TDC Group recorded sales of more than DDK 26 billion.

A broadening product portfolio

Dansk Kabel has always been committed to providing excellent customer service, based on innovation and to extending its range of customer services. Mr Hynkemejer said, “As such we were one of the first operators to launch VoIP services on cable networks almost seven years ago and, as part of our ongoing investment programme, in May 2010 we developed and extended our product portfolio to cover more services towards MDUs; these new services include surveillance and security products, as well as facility management and electricity and consultancy services.

In addition we have engaged in a cooperation with a capital chain in order to install TV sets etc into people’s private homes. These new services are backedup by our nationwide field force which covers Denmark in full via our eight key, regional offices. The revenues for these new business areas comprised 10 per cent of the total 2010 turnover with only eight months of operation.

“One of the big challenges in our industry is to maintain labour force, i.e. skills and competencies, with fluctuating demand. Compared to

2009, 2010 has been smaller with respect to installation business in the market, and this is the same for DKTV. Fortunately we have been able to raise both skills and productivity during 2010, providing increased efficiency with a decreased workforce.

Customer demands

To understand customer demands it is necessary to understand the background of these voluntarily associations. The foundation of this dates back to 1820s where NFS Grundtvig (a Danish cultural beacon) developed his ideas to develop the backward peasant culture through adult education and cooperative spirit. This spirit formed Denmark and Scandinavia into societies where all kinds of associations grew up, e.g high schools, leisure, sports, and thus into accommodation and local cable networks. The idea is to add benefits for the society as well as the individual, while building on the community (and in this case add purchasing power into the equation). A typical association consists of 100 to 1000 households (members), a network and a board (5–10 of local residents) managing on behalf of all members.

“The use of telco/cable networks has changed dramatically over the past 10 years,” Mr Hynkemejer adds and continues “some 10 years ago cable networks included plain TV services only, and if things were really up to speed, maybe digital TV services such as highpay channels. These days a standard cable network offer include – TV (analogue and digital), services-ondemand (music, feature films, gaming and program archives, etc), broadband and telephony, and this requires a lot more planning for network capacity, spectrum allocations and future network buildouts. This is where Dansk Kabel TV really adds value to

network owners, in order to secure a long-term plan and all time stable operation. Recently we invested heavily in new central network equipment in order to expand our broadband capacity in the network, as well as in new cars in order to add capacity, for example in fibreoptic cars. We have long-standing relationships with our many local associations, some of which have lasted for more than 30 years. It is important to understand that in the last five years technology and market forces have changed dynamics more than in the previous 25 years. With heavy turbulence in technology and market forces, it is vital for customer and supplier relationships for associations to make the right decisions.”

Consolidation follows acquisitions

As part of a strategy to gain an even greater share of its domestic market, Dansk Kabel TV embarked upon a series of acquisitions. In 2010 the company merged four Danish telecommunications companies into Dansk Kabel TV A/S A+, Telelet, Connectpartner and Fascom. This was part of a strategy to extend and broaden the service offerings of the company and to boost the customer base. Mr Hynkemejer added, “In 2011 we will be merging ‘Nordit A/S’, which is a minor regional internet service provider in order to add to our domestic customer base. However, apart form this strategic move, we have no further plans for mergers or acquisitions in the near future.”

The company continues to maintain the highest standards in delivering its telecoms systems to customers and relies on the latest Cisco equipment for its cable and broadband network infrastructures as well as Tyco and Cabelcon for fibre and cables and on leading local suppliers such as DKT for connection services.

Challenging the future

It is the ambition of Dansk Kabel TV and its parent company TDC to become the best-performing telecom player in Europe by the year 2012, measured by value creation, customer satisfaction and employee pride in the company. Today the group is the leading Danish provider of a wide range of telecommunications solutions to the domestic market. In the other Nordic countries, the TDC Group is the main challenger in the diversified business market. “We wish therefore to maintain and extend our position through a sustained focus on the provision of telephony, Internet, TV and data communications as well as hosting solutions and services,” said a company spokesman.

Furthermore, the company is determined to maintain a leading market position as the premium provider of communications solutions to the business sector customers in Denmark. Its focus is on improving customer satisfaction through continued simplification and process optimisation. n