TDC considers sale of hosting unit

TDC launched a strategic review of its hosting business that may lead to a sale of the unit, although the Denmark-based operator stressed that no decision has yet been made.

"The strategic review may or may not lead to a sale of TDC Hosting. There can be no assurance when such a sale will occur, if at all," the company said. "Further communication will be made if and when a decision to proceed with a sale has been taken."

TDC Hosting is a small division of TDC, generating revenue of around DKK500 million (€67 million/$71 million) last year. It provides managed hosting services, co-location, and shared hosting and standard cloud-based IT services to public institutions and businesses in Denmark, Sweden and Finland.

A sale of the unit would help the operator to focus fully on its fixed and mobile network operations as it prepares for possible market consolidation: Telenor and TeliaSonera plan to merge their respective mobile operations in Denmark to form the largest player both in terms of revenue and number of subscribers.

"It is a signal to investors that TDC is on top of things, and as TDC Hosting is a very small division it is not surprising that TDC is considering if the division would be better off with another owner," Sydbank analyst Morten Imsgard told Reuters. "TDC has for some years been turning every stone in the shop to find out which are profitable, and which aren't," Imsgard added.

Telenor and TeliaSonera last week said they were confident that their planned merger in Denmark would be approved during 2015 after the European Commission (EC) opened an in-depth investigation into the proposed deal.

Should the merger go ahead, TDC would be relegated to second place in the mobile market with Three Denmark ranked third. When the merger was first announced, analysts described it as a "credible strategic solution" to TDC's domination of the market, but said close regulatory scrutiny was likely due to a potential marginalisation of Three Denmark.

For more:
- see this TDC statement
- see this Reuters article

Related Articles:
Telenor and TeliaSonera confident of Danish merger approval in 2015
EC's Vestager hints at closer scrutiny of future operator consolidation
TeliaSonera gets green light for Tele2 Norway buy
M&A helps reshape the European mobile landscape
EC tipped to closely scrutinise Telenor/TeliaSonera Danish joint venture

 

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