Danish former incumbent telecom provider TDC has been front and centre of acquisition drama unfolding in the Nordics.
Local pension fund companies PFA, PKA, ATP, and Australian-based financial giant Macquarie Group managed to secure an agreement to purchase TDC for £4.7 billion after a back and forth tug of war.
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So what has the consortium of new owners stand to gain through the acquisition of a smallish but wealthy European former telco incumbent?
Looking at the positives:
The company owns considerable network assets and has massive brand exposure and market share across the Danish consumer market.
Also, TDC Business is making progress in modernizing and digitalizing its offerings. It offers cloud services, unlimited access to Skype for Business and Office365, and launched wifi calling.
The operator is committed to a 2018 vision of continuing to launch new cloud solutions and extending more self-service capabilities via next generation mobile self-service apps to its business customers.
Importantly, TDC Business won the most major Danish enterprise tender in the market for delivering services to the majority of local authorities and the central government.
There are a number of areas where TDC can drive opportunities.
Outbound mobile data roaming traffic spiked — by around 500% — since Europe’s Roam like Home regulations came into force during the summer of 2017, giving opportunities to TDC’s wholesale business for carrying mobile roaming traffic on behalf of other carriers as well as media firms.
TDC has a strong heritage in all things mobile, as one would expect from a Scandinavian communications provider.
If it can continue to innovate its next-generation fixed and mobile converged offerings for targeting the enterprise and private sectors in Denmark, then differentiation should keep its buyers loyal.
The company will have to maintain an aggressive agenda and invest in innovation to keep ahead of market disruptors and large telco rivals such as Telia, BT and Orange, that are also eyeing up its lucrative government sector contracts.
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A Bumpy Ride Ahead?
However, during 2017, the TDC business unit’s reported revenues from internet and network services slipped by 19.5% to £42.3 million.
This was in part due to the divestment of TDC Hosting (for £36 million) and through the transfer of its alarm network business from TDC Business to other parts of the TDC group back in the third quarter of 2016.
Competition remains rampant for both TDC’s business and consumer business lines, and there is little evidence available to support the notion that the new investors will be able to help TDC achieve overall growth.