Richard Jones - Ventura Team

ASSESSING AN

OPPORTUNITY

AND BUILDING

AN EXCELLENT

BUSINESS CASE

Richard Jones

[email protected]

Copyright Ventura Team LLP 2008 - 2011 – Page 2 [email protected]

We are breaking new ground in terms of thought leadership in:

Machine to machine communication with the worldwide GSM Association

Fibre to the home with various parties including the FTTH Council Europe

Project management through a pragmatic practitioners' guide published by a major business book publisher

Our work ranges from business case development and strategy consulting to interim management, due diligence and creation of new service propositions

As a next-generation firm we complement our consulting work with investing our own money in selected ventures so we `walk the talk’.

The Ventura Team includes highly experienced telecom finance consultants, engineers and executives. Each one has achieved success in senior roles and many have financial transaction experience up to multi-billion value.

At the centre of our values is integrity. We do not pull our punches and we provide best advice always. Our opinions and name carry weight in the industry as a result.

We are an analysis and consulting firm that uses only seasoned experts and industry veterans

Installation site visit.

We like to get out of the office!

We only use experienced people with established records of success in their area

Our average age is 46

Integrity is central to our work

real broadband


We’re going to discuss learning from our analysis, consulting and operations including…

Several million homes passed planned/implemented

The business case and strategy for the World’s fastest ubiquitous network -

Our own startup operator (rated top 5 in the World for service value by Point Topic)

“1 GIGABIT EVERYWHERE”

Planning a 20,000 cabinet FTTX deployment with up to $3

billion investment


100 MB

The company is profitable despite the very low prices and minimal investment

This reflects

the hard work of the team

a focus on operational excellence

…that means the company also operates with good customer satisfaction while having 2,500 subscribers per employee!

Ranked number 4 in the world for broadband service value by Point Topic

…including learning from our own startup operator


Technologies can rarely be considered in isolation

How do companies commit to a network to compete with their challengers…

3G

WiMAX

LTE

FTTH

FTTC

ADSL

Source: Alcatel-Lucent


..and even the simplest deployments can be very complex – particularly for incumbents

Source: BT


You can’t normally build everywhere…

-

500

1,000

1,500

2,000

2,500

Passive Infrastructure CAPEX (GBP) per Home Passed by Geotype and Technology for Sweden

FTTC/VDSL

FTTH (GPON)

FTTH (PTP)

Source: Ventura Team LLP


There is no ‘one right approach’ for every country/situation…

FTTC (VDSL2) GPON PTP

Typical Speeds

>40MbpsDouble with acceleration?

<100Mbps <=1Gbps

PROS Cheapest solution Cheaper than PTP initially (we’ve seen 5% savings where ducts are widely available to 21%)Saving in central office space

Future proofSymmetric servicesSecurity for businesses

CONS Limited speedProblems of quality of finalcopper dropLimited opex savings

Shared fibre – not seen as secure as PTPWill probably need upgrade in the future

Lots of fibre to installLarger central offices required

These choices are considered in isolation and the cost of migration later forgotten


…and the product offerings vary enormously from country to country (e.g. fibre)

These bundles from different operators are very different propositions from one another

0%

20%

40%

60%

80%

100%

120%

Virgin Media 30

BT Infinity 40 (low upstream)

BT Infinity 40 (high upstream)

Zon Fibra 30

Portugal Telecom 30

Virgin Media 100

Zon Fibra 1000

Verizon

1 Gbps for $26 (Hong Kong) or 30 Mbps for $60 (Portugal)


However take up is not always as high as expected – people don’t just buy technology

Source: Ofcom

How much more will people pay to double their broadband speed?


So you can go from this reasonably simple business case..


…to the challenge of trying to deliver FTTH


But getting the overall scenario right for any deployment is very complex –small changes create huge impacts on results


Each option has implications across the business

Example output: Ishikawa Diagram - NPV of 2014-2019 Cashflows for FTTH of an Incumbent Ventura Client (numbers broadly representative but disguised)


Then all you have to do is implement!

If you are thinking of turning copper off then there are a lot of issues to face

What will any operators taking wholesale bitstream do when you turn off their ability to generate revenue?

How do you avoid unbundling?

However there are more significant complexities as you are ‘forcing’ a migration on current customers

If people don’t want you to install new kit then you may have to accept that they will be cut off with no service

Making appointments is much harder if people don’t see the need (and ask for) a change

The cutover is likely to take at least two visits (see following slides)

Re-visits need to be planned to smooth over unhappy customers complaining about chipped paint, holes in walls, messy installations


Operator Experience Includes:

Telecom Egypt

Vodafone (various operations)

Atheeb Consortium (Saudi)

Millicom International Cellular

Batelco

Colt Communications

BT

STC

Pipex

Riksnet

Nordisk Mobiltelefon Group

Eircom

Turk Telekom

Bulgarian Telecom

Invitel+Pantel

Neuf Telecom

Deutsche Telekom

MLL Telecom

Investor Experience

Apax

RBS

Regulator Experience

Ofcom

DCMNR

Egypt NTRA

Vendor Experience

Huawei

ZTE

Alcatel

Ericsson

Motorola

WiPRO

Industry Clients

FTTH Council Europe

GSM Association

Market Experience

Egypt

Qatar

Oman

Saudi Arabia

Dubai

Poland

Ireland

UK

German

Mali

Sweden

Hungary

Greece

France

Rwanda

Estonia

Thank you…

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Richard Jones - Partner

[email protected]

mobile: +44 7811 166033

Business

Richard Jones - Ventura Team