It's 4G, but they don't like to talk about it: How Denmark's LTE rose from the ashes of a price war
In some parts of the world, the higher speeds that LTE brings are heavily promoted by mobile networks, and 4G services sold as part of distinct and premium-price packages.
But in Denmark, 4G is increasingly being wrapped into generic mobile data subscriptions, and some analysts fear operators could start giving 4G data away if a price war on voice and 3G data spills over to its fourth-generation counterpart.
TDC is Denmark's largest mobile operator with 2.19 million subscribers, but it's pitted against rivals that are much larger international players that have operations across Europe and Asia. Chief among them are Telenor, with just over two million subscribers in Denmark; Telia, with 1.3 million; and Three, with 844,000 subscribers, according to figures for the second half of 2012 from telecoms regulator the Danish Business Authority.
All four operators have now launched 4G networks and hold 77 percent of Denmark's 8.2 million mobile subscribers between them. Of these, more than half — 5.4 million — are classified as mobile broadband subscribers.
The 4G state of play
The first operator to launch LTE in Denmark was Telia. After deploying the world's first 4G network in Sweden in 2009, it delivered 4G to Denmark in December 2010 with a roll-out that covered the cities of Copenhagen, Aarhus, Aalborg and Odense and around five percent of the population.
Today its network, which operates on the 1800MHz and 2600MHz bands, covers 75 percent of the country's population — roughly four million Danes — in 192 towns and cities.
Telia's larger rival, TDC, launched its own 4G network in Denmark in 2011 and, at the end of 2012, had covered 40 percent of the population. It aims to cover 99 percent by 2015.
The Danish Business Authority held an auction for 800MHz spectrum in June 2012, which TDC used to secure a 4G licence for 2x20 MHz lots in the band, at a cost of 628m DKK (£71m) and it's aiming to use the additional spectrum to extend LTE coverage to the rest of the country.
TT-Netværket, a joint network sharing venture created in 2011 between Telia and Telenor, acquired 2x10 MHz lots in the 800MHz spectrum in the auction for 111m DKK (£12.7m), which will be used to reach an estimated 98 percent of the population.
TT-Netværket covers the two operators' 2G, 3G and 4G networks, but despite this, Telenor only entered the 4G race in March.
Thanks to TT-Netværket, Telenor was able to launch with coverage of 75 percent of the population, placing it well ahead of TDC's 4G coverage. The Telenor-Telia joint 4G network is data-only, while their joint 2G and 3G networks, still in the process of merging, are used for data and voice. Telenor expects to improve the data speeds on the 3G network as a result of offloading more data traffic to the 4G network.
Denmark's fourth player, Three, missed out in its bid for 800MHz spectrum. However, in September 2012, it launched its 4G network across 15 of Denmark's largest cities, covering 38 percent of the population using 1800MHz and 2600Mhz spectrum. It now reaches 69 towns and about 50 percent of the population.
Thanks to the 1800MHz spectrum, which Apple's iPhone 5 LTE has supported in Denmark since January, iPhone 5 owners can use the device on Telia, Telenor and Three's networks. TDC's 2600GHz network isn't supported by the iPhone 5.
The ashes of a price war
Danish 4G packages have emerged against the backdrop of a protracted price war, fuelled by aggressive pricing from low-cost MVNOs often owned by the more established telcos, such as Onfone (a TDC subsidiary), BiBob and CBB (both Telenor subsidiaries) and Telmore, an operator with 679,000 subscribers.
Last May, Henrik Skov, finance director for Telenor, said he saw no prospect of a ceasefire, predicting the battle would be a duel to the death for at least one of Denmark's mobile players.
While analysts at Danish bank Sydbank raised concerns that competition would prompt operators to give 4G away, for now the country's carriers have called a truce of sorts and appear to be steering a course away from extending their price war to 4G.
Telenor's chief Marek Slacik Berlingske, for example, told Danish paper Business.dk its go-to-market strategy intentionally avoided a price war, claiming "we will not chase new customers at any cost", and instead would focus on encouraging the roughly 50 percent of its customers without 4G phones to make the move to 4G.
The cost of Denmark's 4G
Rather than selling 4G packages, all of Telia's data tariffs offer the option of both 3G and 4G connectivity. "All of our [smartphone data] subscriptions are 4G-enabled, and in that sense, basically all of our customers are 4G subscribers," said a spokesman for the network. "Whether or not they can actually access the network naturally depends on their device and its ability to access the use of 4G technology."
To get customers onto data-heavy packages, Telia is also sweetening the deal with the inclusion of over-the-top (OTT) services, such as bundled Spotify and HBO subscriptions.
Most of its customers are on the 4Everything Light product, which costs 299 DKK (£34) a month and includes unlimited call minutes, SMS and MMS, 20GB of data, roaming on Telia's network in Sweden and a 12-month Spotify subscription. It's also sold with the latest smartphones.
Prices for Telia's other Free Talk packages (phone packages with unlimited calls) range between 179 DKK (£20) per month for 1GB of data to 399 DKK (£45) for 100GB. The 5GB product without Spotify for 199 DKK (£23) is also very popular, according to the company's spokesman.
Telia's standalone data packages, excluding the cost of a USB modem or a router, start at 99 DKK (£11) per month for 2GB data, after which data limits go up and have a subscription to HBO. The 10GB with a three-month HBO subscription costs 199 DKK (£23), the 100GB with six months' HBO costs 299 DKK (£34), while for 399 DKK (£45 per month, customers get 500GB and 12 months' HBO.
At the launch of TDC's 4G network on the 2600MHz spectrum band, the operator pitched it as a top-line product that was available in 10 of Denmark's larger cities including the capital Copenhagen, Aarhus, Odense, Aalborg, Esbjerg, Randers, Kolding, Horsens, Vejle and Roskilde.
TDC's plan was to sell consumers and businesses a premium 4G product that offered up to 80Mbps download speeds; private customers would have 5Mbps upload speed, while businesses would be offered a 20Mbps uplink. Nevertheless, its 4G story looks rather flat by comparison.
Its mobile phone products are only promoted as coming with 3G data, so are not included here, while it offers just two 4G data-only plans, both offering 80Mbps, via a USB dongle. The 10GB a month product costs 199 DKK (£23) per month for and the 25GB product costs 299 DKK (£34). It includes TDC's Play Musik subscription, which can be streamed via an app to an iPad, as well as access to 700 Wi-Fi hotspots.
Like Telia, Telenor's 4G is available to all data subscribers with a 4G-enabled phone. To increase the number of those subscribers, it offers rebates of around 1200 DKK (£136) for 4G devices, such as Nokia's Lumia 820 and 920, Apple's iPhone 5, and Samsung's S3 and S4.
Telenor offers 3GB at 50 DKK (£6) and 10GB at 100 DKK (£11) per month as a data add-on to voice subscriptions costing between 80 DKK (£9) and 180 DKK (£20), depending on hours. A "Free Talk" package with 10GB costs 400 DKK (£46).
Monthly 4G data-only subscriptions are tiered, offering download speeds between 17Mbps and 40Mbps starting at 69 DKK (£4) for a 500MB allowance and 139 DKK (£16) for 3GB allowance. Existing customers get a 20 DKK (£2.50) per month discount. Monthly subscriptions with higher speeds — between 17Mbps and 71Mbps — are 239 DKK (£27) for 10GB or 339 DKK (£38) for 25GB. Existing customers get a 30 DKK (£3) discount.
Three promises respectable, but still lower than its rivals', maximum speeds of between 30Mbps and 40Mbps on its 4G network (it's also claimed that 80 percent of its 3G network users have been upgraded to a maximum of 42Mbps). Its 4G network covers 69 towns and 50 percent of the population, it says.
Like Telia and Telenor, Three offers 4G to all customers where it's available, if they have a device that supports it. As a result, packages are just sold as
Three's free voice plans start at 159 DKK (£18) per month for 1GB, which moves up to 5GB with a slight price rise to 179 DKK (£20). The 10GB free voice product costs 199 DKK (£23) per month while the 100GB allowance costs 299 DKK (£34).
It's 4G, but we don't like to talk about it
While encouraging customers onto 4G, mobile operators are downplaying its importance.
"Telenor believes that a great network experience is about how the customer perceives the total network, not just 4G," Mikkel Drucker, Telenor's head of segments in the mass market division, told ZDNet.
"Regular people do not understand acronyms or technical abbreviations. That is why our marketing is not focused on 4G but around the entire network, and therefore we have named our network as Nu [Danish for Now]."
TDC's 4G marketing has been muted at best, and it does not promote the 4G-enabled smartphones it sells to customers specifically as 4G products.
TDC CEO Anders Jensen told Danish business paper Børsen in March that while the operator did include 4G in all subscriptions, it was too early to go out and beat the drum about 4G.
TDC said it would not promote 4G separately because it could not command a premium price for the service while rivals such as Telia and Three were offering Free Talk packages with a data allowance that simply threw 4G in the package without explaining what the value of 4G was compared to 3G, he said.
And while most Danish operators are happy to offer 4G connectivity to consumers whether they buy a 4G-specifc package or a generic data subscription, that doesn't mean there's no value in 4G for them. As mobile data usage continues to grow, 4G offers a way of carrying more and more of it. They may not know it, but Danes already have a sizeable appetite for 4G, and one that is only likely to increase.