TDC Group Annual Report 2011(6,4MB) - TDC Annual Report 2011

Note 4 Segment reporting
For a description of reportable segments and the types of
products and services from which each reportable segment
derives its revenue, see 'Business lines’.
In 2011, Wholesale became a separate business unit.
Wholesale provides external operators with access to TDC’s
network. Previously, Wholesale was part of the Operations
& Wholesale business unit. As a consequence, Wholesale is
now a separate reportable segment and Operations is now
part of Operations & HQ (Headquarters). In addition, a
reallocation of SoHo customers between Consumer and
Business has been carried out. Comparative figures for
2010 have been restated accordingly.
Domestic mobile and landline networks are based in
Operations & HQ. Operating expenses in Operations & HQ
related to Consumer’s, Business' and Wholesale’s use of
the network infrastructure in Operations & HQ are allocated
to the respective segments based on a unit cost. The
calculations of the unit cost are based on network costs
from the previous year in Operations & HQ.
The costs are allocated to Consumer, Business and
Wholesale based on their expected proportionate use of the
network.
The cost allocation for Consumer's, Business' and
Wholesale’s use of networks does not include relevant
depreciation or cost of tied-up capital and is therefore not
comparable with the prices that Wholesale charges
wholesale customers.
Capital expenditure related to the domestic mobile and
landline networks is not allocated to Consumer, Business
and Wholesale.
Interconnect payments and income concerning TDC
customers are allocated to the relevant segments.
TDC Group Annual Report 2011
IT services from Operations & HQ to Consumer, Business
and Wholesale are allocated with a fixed fee based on the
expected share of total resources allocated to each
business line. The cost is allocated using a range of
different allocation formulas. Facility management services
are allocated with a variable fee based on the use of square
metres for the locations (e.g. shops, administrative
locations, basements and technical buildings). Invoicing
services are allocated with a variable fee based on the
actual usage (e.g. mailing and direct debit). The basis for
the allocation of remaining services, such as cars, supply
chain management and sourcing varies between fixed and
variable fees. Operations & HQ’s supply of staff-function
services, i.e. HR, legal, finance, etc., is not allocated to other
segments.
Cost allocations from Operations & HQ to other segments
are recognised as 'Operating expenses allocated to other
business lines' in Operations & HQ and as 'Operating
expenses' in the other segments.
The coaxial-cable network including related operating
expenses and capital expenditure is based in YouSee.
YouSee’s use of the landline network and other services
from Operations & HQ is invoiced on an arm’s length basis
and accounted for as revenue in Operations & HQ and as
Operating expenses in YouSee.
Operations & HQ has assumed all pension obligations for
the members of the Danish pension fund. Accordingly, net
periodic pension cost/income and the plan assets for the
Danish pension fund are related to Operations & HQ.
Segments employing members pay contributions to
Operations & HQ, and these contributions are included in
the operating expenses of the respective segments.
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