The Finnish telecommunications market is stable and attractive with three strong operators.
- The competitive environment of the Finnish telecommunications market is stable, and the three main players, DNA, Elisa and TeliaSonera, generate approximately 90 per cent of market revenues.
- Market stability is illustrated by the high share of postpaid subscriptions: 92 per cent of the total number of subscriptions at the end of 2015. The high share of postpaid subscriptions is reflected in low churn and large number of long-term customers, most of whom have subscriptions with unlimited data plans.
- The average revenue per user (ARPU) in mobile communications in Finland is rather low by international standards, meaning that there is upside potential. ARPU growth has been driven by increasing smart phone penetration and growing demand for 4G subscriptions.
- The importance of data communications solutions is expected to grow in the future. Anything and everything will be digitised and automated into smart content that can be accessed over the Internet by mobile devices. The use of terminal devices with a constant network connection is increasing rapidly among both business and private users.
Superior mobile and fixed network infrastructure.
- DNA has made significant investments in its 4G network rollout since 2013. DNA’s 4G network is one of the most advanced mobile networks in Finland, and it is expected to reach 99.6 per cent of the population of mainland Finland by the end of 2016.
- In spring 2015, Suomen Yhteisverkko Oy, a joint operation of DNA and TeliaSonera, started constructing a joint mobile communications network based on the 2G, 3G and 4G technologies in Northern and Eastern Finland, and the construction phase has been completed in November 2016. The network enables DNA to provide high quality mobile coverage in rural areas. The joint operation has already increased the amount of DNA’s new subscribers and market share in Lapland.
- DNA’s superior spectrum position supports leading average mobile broadband speeds in seven of ten largest cities in Finland (measured by total of uplink and downlink speeds).
- DNA’s HFC network is the largest in Finland and covers about 850,000 households or approximately 32 per cent of Finnish households. The network is fully EuroDOCSIS3.0 upgraded, allowing currently at least 350 Mbps download speeds to all households within its footprint and gigabit grade speeds in the Helsinki metropolitan area and Oulu.
DNA has satisfied customers, strong brand and broadest own distribution network.
- DNA’s offering is highly extremely competitive as evidenced by its high scores in the Net Promoter Score for customer satisfaction.
- DNA has the most extensive operator distribution network consisting of more than 60 DNA Kauppa stores around Finland. DNA’s products and services are also sold through several consumer electronics retail chains.
- DNA’s brand image has improved significantly among both consumers and businesses since DNA fused its separate brands into a single brand in 2015. DNA’s brand value grew by 86 percent in 2015 and had the third highest value growth of telecommunications service providers globally.*
- DNA has received good rates in the annual EPSI customer satisfaction survey.
- CHURN in DNA’s postpaid mobile subscriptions has decreased, which indicates DNA’s customer loyalty.
*Source: Analysis by international Brand Finance, 5/2016.
DNA has strong market position across all growing service areas, which has improved in recent years particularly in mobile services and cable television services.
- In the mobile market, DNA has a strong number three position as its customer base is growing more rapidly than that of its competitors.
- DNA has maintained its position as the largest cable TV provider and in recent years, DNA has been able to increase its market share considerably in fixed broadband due to its extensive high-quality HFC network, in particular.
DNA's revenue has shown a stable trend, and its services revenue has grown during the past few years. DNA's profitability has also developed positively.
- The number of subscribers in DNA’s mobile network is growing rapidly, the trend in CHURN has been positive, and the trend in mobile ARPU has been positive. All of these factors have had a positive impact on the services revenue.
- DNA’s EBITDA has grown in recent years. The EBITDA margin, for example, has improved from 24.3 per cent at the end of 2014 to 29.2 per cent in the third quarter of 2016. Primary reasons for the margin increase include a favorable revenue mix effect associated with growth in high margin service revenues and a decline in lower margin interconnection and equipment sales revenues, the acquisitions of TDC Finland and PlusTV and the realization of associated synergies and other cost control measures.
- DNA’s capital expenditure has been elevated over the previous years primarily due to an exceptionally rapid 4G network population coverage. With these network investments largely behind, DNA believes that its capital expenditure intensity will decline going forward
Strong and experienced executive team with impressive track record of transforming DNA.
- DNA’s key executives have extensive experience of the Finnish telecommunications market.
- The team’s strong track record includes growing DNA’s market share in the mobile and fixed broadband markets, growing DNA’s total revenues and improving its profitability, strengthening key performance metrics including customer and employee satisfaction and churn rates and executing a number of value creative acquisitions.