Denmark

This executive summary describes the main events relating to the regulation and use of alternative networks in Denmark over the last three years. The area has been liberalised in four steps as described below:

• 1 July 1995: The use of cable TV network inside the borders of a local county was liberalised. All signals crossing borders and use of all other kinds of network than cable were still only to be handled by the monopoly.
• 1 July 1996: Fully liberalisation of telecommunication in Denmark. All kinds of alternative networks were allowed. To ensure that public or semi-public institution did not offer alternative network at subsidised price’s requirements for separate accounting principles was enforced for these institutions.
• 1 July 1997: Laws regulating in detail the interconnection between different operators passed in May 1997. A new general law on competition was also passed in spring 1997 with effect from 1 July 1997.
• 1. July 1998: The concept of service provision was introduced in Denmark for fixed and mobile telephony. Also new are the possibility of renting infrastructure from the dominating operator, which gives alternative operators access to the local loop.

On October 27 1997, with the sale of a large part of the State owned shares in Tele Danmark to Ameritech, the American Tele-operator owns 42% of the shares in Tele Danmark giving them full control of the company. Ameritech’s control of Tele Danmark can have significant influence on the development of the telecom market not only in Denmark, but also in the whole Northern part of Europe as Ameritech and Tele Danmark together has investments in most Northern European countries. In Denmark it is expected that Tele Danmark will follow the customer-oriented philosophy of Ameritech. Ameritech has implemented new strategies for Tele Danmark requiring an income growth of more than 10% for each department in Tele Danmark.

On May 12 1998, about half a year after Ameritech bought Tele Danmark, Ameritech was itself bought by SBC in the largest merge in the Telecommunication sector ever. The merge came as a big surprise for both politicians and regulators in Denmark, but as a natural consequence of the sale of Tele Danmark the ownership cannot be controlled anymore of the Danish government.

After the telecommunication market has been fully liberalised and Tele Danmark has been fully privatised the main regulatory task by the government is to ensure that the market is well functioning and that the dominating operator is not misusing his position. Currently, the regulatory framework seems to work well with competition entering almost all the areas previously reserved for the monopoly. Tele Danmark is facing hard competition in international telephony, and increasing competition in regional and local telephony.

In the area of mobile telephony two new started service at the beginning of 1998. It is already clear that their entrance into the market will be slow, but it remains to be seen if the will get enough hold on the market to stay in. To gain customers they will have to provide a broad geographical service, which has forced them to establish roaming with GSM-900 service providers.

While Tele Danmark reluctantly accepted the first step of demonopolisation, the operator fiercely resisted the following steps including service provision and rental of infrastructure. In June 1998 intense political negotiations was going on, but finally Tele Danmark had to accept both service provision and rental of infrastructure. The service provision will not only be relevant for Tele Danmarks fixed and mobile network, but also for the mobile network of Sonofon. The rental of infrastructure is expected to primarily cover access of other operators to the local loop allowing them to provide xDSL services.

2. Activities in relation to alternative networks

Of most relevance for alternative networks will probably be the change of the law about access to cable laying and condemnation. The law gives every interested party equal and open access to areas and cabling systems owned by public utilities and public authorities. In reality this means that the existing alternative network providers in Denmark, Electrical companies, Rail track owner, local community are now required to offer access to their areas and cabling systems.

The alternative network market in Denmark is becoming very complex with a number of actors in different parts of the market. Some actors are only interested in providing physical infrastructure for fibres. Others prefer to sell the infrastructure together with the fibre networks, and finally some prefer to have maximal control to the infrastructure to provide the most advanced services for the end users.

2.1 Rail tracks

Banestyrelsen, which owns the Danish rail tracks, have 800 km of fibre network with approximately 5.000 km of fibres. They are using the network for signalling and data communication, but they have much surplus capacity which they have sold to the Danish mobile telephone company Mobilix (former owned 100% by French Telecom, now a joint venture between FT and Banestyrelsen (14%of the shares) ). It is planned to extend the network to cover 1000 km with fibre cables. Mobilix plans –beside its mobile telephone services - to offer fixed network services as phone calls, data-transmission and multimedia services.

2.2 Electricity

The electricity companies, NESA and ELTRA, have established a shared company, POWERCOM, that handles all telecom activities on behalf of NESA and ELTRA. Powercom is installing fibres along motorways in most parts of Denmark.

2.3 Local Councils

The Municipality of Copenhagen has succeeded in selling the right to use about 40 km of pipes to two tele-operators, Telia and Mobilix. The sale of the rights was a result of a tendering made by the Municipality during the late 1997, resulting in a 15-year contract has been concluded at the beginning of 1998.

The municipality of Køge has decided to use the local cable-TV network to distribute telephony to the 120 workplaces within the municipality. It has also been decided that the municipality will sell the both data and telephony traffic to companies too. In order to cover the more distant areas within the municipality, it is also planned to use radio based networks.

2.4 Roads

The Danish Road Directorate is responsible for the motorways in Denmark. They have requested that interested tele-operators are laying down cables together along the motorways to reduce the traffic disturbances caused by the work to the minimum. Currently cables are laid from Funen to Jutland (Kolding) by Telia (as leading contractor) ; the cables will be used by Telia, Zone Systems, and Tele Danmark.

2.5 Carriers carrier

The company Zone which started up as a regional "carriers carrier" in the Oresund area has decided to develop into a global "carriers carrier". The company is actually building a network covering a large part of Denmark from Copenhagen to Esberg and from Kolding to Padborg. The company wants to serve large business and organisational segments with "point to point" transmission. The company expects the network to reach Padborg by the second quarter of 1999.

The above-mentioned company Powercom is currently expanding its network all over Jutland and expect to reach Flensburg by the end of this year. Powercom expects to cover all big cities in Denmark with its own backbone by the end of 1998 with a high-speed network up to 160 Gbps. Powercom also bought 300 km fibre cable from the Copenhagen council earlier this year. Powercom started up with 1000 km of fibrecables and is being extended to 3000 km of fibrecables. Powercom is expected to be the first real "carriers carrier" in Denmark.

2.6 Natural Gas

The Danish national organisation responsible for the overall distribution of natural gas, called DONG, does not at the moment prepare activities within the telecom business area.

2.7 Cable-TV

The only major alternative to Tele Danmark in this area is Telia-Stofa, which has been very successful in providing high speed Internet services in their cable networks. Telephony is now offered in a trial in one city (Århus), while high speed Internet access through cable-modems are available in four cities.

The table below shows the current offering of physical infrastructure as provided today and how these offers are used by telecom operators.

Table 1. Relationship between offering of physical infrastructure and tele-operators