TDC sings about Song purchase and reports Q3 profit rise

2 Nov 2004

Denmark’s largest telecoms operator TDC reported a 58% rise in net profits in its third quarter to 30 September, thanks to strong gains and increased sales at its international mobile operations. The company said that net income rose to DKK1.6 billion (USD275 million) from DKK1 billion a year ago, on the back of a 3.4% increase in sales to DKK11 billion; analysts had predicted sales of DKK10.8 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) was also up at DKK3.3 billion, from DKK3.19 billion previously. The rises have been attributed in part to TDC’s Mobile International Group where net sales rose by 17% to DKK4.01 billion, despite heavy competition in increasingly saturated markets. In Germany, the group’s Talkline unit saw EBITDA drop 46% to DKK125 million as a result of higher subscriber acquisition and retention costs. Its Swiss operation Sunrise reported a small rise in sales to DKK2.44 billion, while a cut in expenses such as transmission costs helped push its EBITDA up 11% to DKK631 million.

In releasing its latest financial results, TDC confirmed that it had purchased more than 97% of Swedish alternative fixed line operator Song Networks, allowing it to move ahead with a full takeover of the company. Last week, and to the surprise of many, the Danish PTO came out on top in a bidding war for Song Networks with Swedish virtual network operator Tele2. The acquisition was cited as key to the company’s bid to expand its international reach in the Nordic region to take on rivals Telenor and TeliaSonera. Phone companies there are expanding through acquisitions to source new revenue streams as income from traditional core voice services continues to dwindle.

Denmark