Annual and Sustainability Report 2011 - Teracom

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Chris Corneliussen, Boxer Denmark’s 100,000th customer, together with Carsten Howard from Boxer Denmark. Boxer Denmark Boxer Denmark reached 100,000 customers during the first week of November 2011 and Chris Corneliussen from Slagelse on West Sealand was the lucky customer. Chris received a 50-inch Panasonic television and a one-year subscription for Boxer Mix. »It was with great pleasure that we celebrated our 100,000th Boxer customer. We reached this important benchmark exactly two years after the digital transition. It took about 700 days to reach the first 100,000 customers, less than 70 days to pass 200,000 and only 30 days later we passed 300,000,« says Boxer Denmark’s CEO Steen Ulf Jensen. Pay-TV in Denmark Boxer has a government permit with exclusive rights to operate Pay-TV in four multiplexes until 2020. The purpose of issuing a permit for a Pay-TV operator, an arrangement that does not exist in Sweden or Finland, is to increase competition in the Danish television market, a situation to which Boxer has greatly contributed. The Danish Pay-TV market, like the Swedish market before Boxer became established, is dominated by relatively large and therefore expensive TV packages. The Group's strategy has been to break in at package and price levels that are attractive to people who want the right amount of television, not too much and not too little. This strategy applies to customers with other operators who feel they do not benefit from everything they buy, as well as customers who until now have been content with the terrestrial network’s free television offering, DR and TV 2’s channels. The sense of freedom of choice created by Boxer’s flexible packaging has been extremely important. As is typical with subscription services, significant investments were required, which have resulted in initially negative results. However, once the customer base surpasses a certain level, the profits will be substantial. VALUE FOR PEANUTS Scan og se mere TV 2 BEGRÆNSET ANTAL TIL INTROPRIS 199kr. for 12 mdr. Betalingskanal fra 11.01.12 Disse kanaler Disse kan du kanaler altid se med kan Boxer-udstyr du altid se med Boxer-udstyr Fra nytår bliver TV 2 betalingskanal. In early January, Hvis du popular ser TV 2 med TV antenne, 2 became skal du have a Boxer. Pay- OPLYSNING TIL Her TV 2 med i alle pakker og du kan endda få den SEERNE OM BOXER TV channel in Boxer Denmark’s offering. *Samlet mindstepris 237 kr. (199 kr. i årlig kortafgift + 2x19 kr. i abonnement). Gælder kun ved tilmelding til PBS. Abonnementet løber tidligst fra d. 11.01.12 – du kan som altid se TV 2 med som selvstændig kanal. Boxer-udstyr frem til denne dato. * SPAR 228 kr. ekskl. modtagerudstyr Packaging and pricing Boxer has worked hard with packaging and pricing. In March, up to four extra cards were offered as part of the basic subscription – two extra cards in the basic package and two children’s cards. This means that households can easily purchase Boxer-TV for every TV in the family and thus take advantage of the simplicity with which the signals from the terrestrial network can reach an unlimited number of devices. In May, the Consumer Council's publication TÆNK named Boxer »most cost-effective TV operator«. Most important of all is that, following a political decision in March 2011, TV 2 became a Pay-TV channel in conjunction with the technology shift from MPEG2 to MPEG4. TV 2’s transition to Pay-TV has fuelled interest in Boxer’s services and although many customers are probably signing up for a subscription in order to + årlig kortafgift på 199 kr. Samlet pris watch * TV 1. år: 2, 237 kr.* the percentage of TV 2-only subscriptions has been small. Boxer has in fact greatly increased sales of its regular subscription services in connection with the channel’s transition. The transfer of TV 2 from MPEG2 to MPEG4 was accomplished through close cooperation between sister companies Boxer Denmark and Teracom Denmark since the project also involves relocation of TV 2 and its regional channels from MUX 2 to Boxer’s MUX 3. 19 kr./md. * Intropris i begrænset antal dog senest inden 01.04.12. Samlet mindstepris ved tilmelding til Betalingsservice: 199 kr. i årlig kortafgift. Abonnementet løber tidligst fra d. 11.01.12 – du kan som altid se TV 2 med Boxer-udstyr frem til denne dato. Normalpris pr. 01.04.12: årlig kortafgift 199 kr. + 19 kr./md. www.boxertv.dk 22
Two years after its launch in November 2011, Boxer passed 100,000 customers and, only 70 days later in January 2012 Boxer passed 200,000 customers. The high growth rate from the end of the year continued into 2012 and on February 5 Boxer reached a record level of 300,000 customers. Boxer began 2011 with four percent of the Pay-TV market and ended the year with eight percent. HDTV with DVB-T2 In late 2010, the Group purchased the Danish terrestrial network operator, Broadcast Service Denmark, from the public service companies DR and TV 2. The company changed its name in January 2011 to Teracom A/S and is now an integrated part of the Group's business. It has already resulted in an aggressive plan to introduce HDTV to DVB-T2 in Boxer’s Denmark selection in spring 2012. Through this strategy the Danish terrestrial network has also initiated a gradual upgrade to better picture and sound quality and more efficient broadcasting technology that will allow room for more services. 65 PR5 Customer satisfaction for Boxer Denmark: 56 Customer satisfaction for Teracom Denmark: The 800 band Denmark is planning to hold an auction for the 800 band in early 2012. The Group has therefore been working on moving channels and vacating the 800 band. Sweden introduced a clear rule in which a disturbance, according to a given definition, must be immediately remedied at no cost to viewers. The Danish Telecommunication Authority is working on similar rules, but the decisive factor is still how they will be implemented in practice. Digital radio Denmark started broadcasting DAB at the same time as Sweden, in 1995, but has made more progress in deployment. Two multiplexes that are mainly used by DR provide 90 to 95 percent of the country’s area with good indoor reception. An estimated 35 percent of the population listens to DAB radio regularly. The planning now under way involves sharing the two multiplexes between DR and future commercial channels. No decision has been taken to switch off the analog FM network, although DR has stated that it would like to see such a decision within the next few years. Teracom is actively promoting further expansion and, together with its Swedish sister company, investigating the feasibility of introducing DAB+. Radio is part of the Group's core business and the Group is at the forefront of the transition to digital radio which, in one way or another, is underway in most countries. Environmental coordinators The environmental coordinators are responsible for proposing, supporting and following up on agreed environmental activities in order for the companies to achieve the overall environmental goal. Since impact of the companies on the environment varies, the focus varies, too; for example, Teracom Denmark focuses on energy efficiency for broadcasting equipment, while Boxer Denmark has chosen to review its electricity subscription and travel arrangements. The environmental coordinators themselves represent extensive expertise in the business. Environmental activities decided for the Danish companies • Review the possibilities for changing electricity subscriptions and improving travel procedures for Boxer Denmark. • Review broadcast equipment, etc., for Teracom Denmark to make it more energy efficient. Large inflow of customers poses challenges for Boxer Denmark Boxer’s customer satisfaction dropped to 65 (67), still somewhat over the industry average. Customer growth surged at Boxer during the year and a small portion of customers had to contact customer service, at the same time as the total number of calls increased. The score is still better than the average in the market and Boxer is perceived as the most cost-effective operator. Teracom achieved a customer satisfaction score of 56 in its first survey as part of the Teracom Group. Customers perceive Teracom as a company that delivers high-quality products and offers a selection of services with market-oriented service levels. Areas for improvement that Teracom Denmark will focus on are image in the market and customer loyalty. Environmental work Focused environmental work is in the startup phase in Denmark. The carbon footprint was analyzed to identify the most important aspects to focus on moving forward. Emissions from largely coal-based electricity in Teracom Denmark drastically increase the Group's total emissions. A large and important challenge for Teracom Denmark is therefore to reduce energy consumption by working to achieve more efficient electricity use. Boxer Denmark’s breakdown of climate impact Business trips 44% Fuel 32% Premises 13% Freight transports 6% Commuting 3% Fuel production and shipment 2% Electricity and district heating 0% Teracom Denmark’s breakdown of climate impact Electricity and district heating 95% Premises 2% Business trips 1% Commuting 1% Fuel 1% Freight transports 0% Fuel production and shipment 0% 23
Page 1 and 2: Annual and Sustainability Report 20
Page 3 and 4: Read more about the Swedish busines
Page 5 and 6: Denmark has been and continues to b
Page 7 and 8: Teracom Group On 1 June, Teracom Gr
Page 9 and 10: An integrated TV business The Group
Page 11 and 12: digital radio and, in connection wi
Page 13 and 14: Subsidized public transportation en
Page 16 and 17: Sweden Sweden is the Group’s firs
Page 18 and 19: The market The competition primaril
Page 20 and 21: 67 PR5 Customer satisfaction for Bo
Page 22 and 23: Denmark Denmark is the Group's youn
Page 26 and 27: Finland PlusTV is the largest Pay-T
Page 28 and 29: Kimi »The Iceman« Räikkönen is
Page 30 and 31: Sustainability - corporate responsi
Page 32 and 33: The Teracom Group’s sustainabilit
Page 34 and 35: The Group's breakdown of climate im
Page 36 and 37: Employees For the Teracom Group, hi
Page 38 and 39: Media plurality requires a long-ter
Page 40 and 41: Reporting in accordance with GRI gu
Page 42 and 43: GRI G3 Index Reference Comments 1.
Page 44: Contents 44 Directors’ Report 49
Page 47 and 48: Operating profit for the year amoun
Page 49 and 50: Diversity and equal opportunity Div
Page 51 and 52: Corporate Governance Report The Cor
Page 53 and 54: Teracom AB's 2011 AGM Teracom AB's
Page 55 and 56: Evaluation of the Board of Director
Page 57 and 58: ously striving to achieve long-term
Page 59 and 60: 1 2 3 4 5 6 7 8 9 10 11 12 Board of
Page 61 and 62: Consolidated Income Statement MSEK
Page 63 and 64: Consolidated Cash Flow Statement MS
Page 65 and 66: Parent Company Income Statement MSE
Page 67 and 68: Parent Company Cash Flow Statement
Page 69 and 70: Notes Contents Note Description Pag
Page 71 and 72: the Group conducts an impairment te
Page 73 and 74: No major changes will be made for f
Page 75 and 76:
Note 4 Segment reporting The Group
Page 77 and 78:
Notice period and severance pay The
Page 79 and 80:
Return on plan assets 2011 2010 For
Page 81 and 82:
Note 13. Tax on profit for the year
Page 83 and 84:
Note 16. Goodwill and other intangi
Page 85 and 86:
Note 17. Other financial assets Gro
Page 87 and 88:
Net investments of foreign operatio
Page 89 and 90:
Financial derivative instruments Th
Page 91 and 92:
Note 26. Shares and participations
Page 93 and 94:
Auditors' report on overall review
Page 95:
Responsibility of the auditor It is
Page 98 and 99:
Technical definitions Broadcasting
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