LCC PresentationTitle Goes Here

26th May 2011

Wireless Infrastructure Sharing

Arnaldo Palamidessiarnaldo_palamidessi@lcc.com

CDG Africa Conference26 May 2011

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Anything familiar in this picture? 

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Agenda

• Why Share Infrastructure

• Sharable Infrastructure

• Business Models

• Market Examples

• Getting Started

• About LCC

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Why Share Infrastructure

• Recapture past spent capital– Through sale of existing 

infrastructure

• Save future capital expenses– By allowing others to host your 

network

• Speed‐up deployments– By using existing structures

• Respond to regulatory pressure– Through sharing your own 

infrastructure

Createsincreasedoperationalexpense as a substitute for financing expense 

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What Can You Share?

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Description Positives Negatives

1‐for‐1 Swap Operators shares sites at no cost on an equal count basis

‐ Avoided CapEx for new builds

‐ Avoided OpEx

‐ Very limited in size‐ Difficult governance‐ No capital recovery

Value‐for‐Value Swap

Sites at no cost on an equal value basis; better sites have more value

‐ Avoided CapEx for new builds

‐ Avoided OpEx

‐ Negotiating value‐ Difficult governance‐ No capital recovery

Sale‐Lease back

Operators sell passive infrastructure to a 3rd party and pay monthly lease

‐ Large cash payment‐ Clear governance‐ More focused business model

‐ Loss of control for critical network components

‐ Higher OpEx costs‐ Loss of upside‐ Tied to a critical supplier

Joint Venture Majority

Operator forms a separate company and sells a minority stake in its passive infrastructure to a partner.

‐ Moderate‐sized cash payment

‐ Clear Governance‐ Clear Control‐ Allows operator to capture more upside

‐ Difficult finding an investor

‐ Complicated governance‐ Higher OpEx‐ Limited capital recovery‐ Other operators may not prefer to co‐locate due to conflict of interest

Business Models

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Business Models

Description Positives Negatives

Joint Venture Minority

Operator forms a separate company and sells a majority stake in its passive infrastructure to a partner.

‐ Moderate  to large‐sized cash payment

‐ Clear Governance‐ Allows operator to capture some upside

‐ Loss of Control‐ Complicated Governance

‐ Higher OpEx‐ Other operators may not prefer to co‐locate due to conflict of interest

Operational Outsource

Operator maintains ownership of the assets, but allows an outsource provider to operate the assets and profit from leas‐up

‐ No loss of control of assets

‐ Lower OpEx than sale‐lease back

‐ Potential to capture long‐term upside

‐ May be difficult finding a partner

‐ No capital recovery‐ Difficult to disentangle

Build‐to‐Suit Operator contracts for a provider to build sites and host the operator on those sites

‐ Avoided CapEx for future sites

‐ No capital recovery‐ Provider may refuse site build requests

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Business Model Matrix

LowControl

HighControl

Low CapEx Savings

High CapEx Savings

Sale

Sale‐‐ Lease back

Lease back

Joint VentureJoint Venture

BuildBuildTo SuitTo Suit

OpsOpsOutsourceOutsource

SiteSiteSwapSwap

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TARGET BUYER DATE DEAL DETAILS Implied EV/Tower

Starcomms, Nigeria

SWAP Associates

December 2010

• Sale-Lease back deal relating to 407 of Starcomms 557 towers in Nigeria

• 15 year agreement • $81.0M USD deal value

$200k

Millicom (TiGO Tanzania)

Helios Towers Africa

December 2010

• Minority Joint Venture • Millicom agreed to sell approximately 1,020 towers to Helios

Towers Tanzania • TiGO Tanzania will retain a significant minority interest in

Helios Towers Tanzania • $80.0M USD deal value

$136k (ownership of 60%)

MTN Group, Ghana

American Tower Corporation (AMT)

December 2010

• Minority Joint Venture • Joint venture between AMT (51% stake) and MTN Group

(49% stake) to acquire 1,876 of MTN Ghana's existing sites • AMT will also need to build at least 400 new sites in Ghana for

both MTN and other wireless operators in the next 5 years • $428.3M USD deal value

$228k

Millicom (TiGO DRC)

Helios Towers Africa

December 2010

• Minority Joint Venture • Tigo DRC agreed to sell 729 towers to Helios Towers DRC • Millicon to retain a 40% minority interest in the JV • $45.0M USD deal value

$103k (ownership of 60%)

Cell-C, South Africa

American Tower Corporation (AMT)

November 2010

• Sale-Lease Back • Deal includes the 1,400 towers owned by Cell-C and up to

1,800 additional towers not built yet • $430.0 USD deal value

$134k

Millicom (TiGO Ghana)

Helios Towers Africa

January 2010

• Minority Joint Venture • Millicom agreed to sell approximately 750 towers to Helios

Towers Ghana • TiGO Ghana will retain a minority interest in Helios Towers

Ghana • $33.3M USD deal value

$74k (ownership of 60%)

Vodafone, Ghana

Eaton Towers October 2010

• Operations Outsource • Eaton Towers signed a 10-year contract to take over the

operations and co-location management of 750 towers for

Example Transactions

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Getting Started

> Determine your strategic drivers• Control vs. CapEx vs. OpEx

> Know your regulatory regime• Strict restrictions on siteing towers drives higher values

> Document your sites well

> Select your business model based on your strategic drivers

> Issue an RFP to experienced partners

> Pick your partner well• You have to live with them for a long time

> Get experienced help through the process

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LCC Company Snapshot

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Our Global Presence

Permanent Offices

Project Mode

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LCCLCC’’s Customer Base Is Diverse and Expansive s Customer Base Is Diverse and Expansive 

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Our Global Services PortfolioOur Global Services Portfolio

Consultancy & Network Audit

Network Design

Network Deployment

Network Optimization

Network Maintenance

Network AuditProcesses AuditPerformance AuditBusiness modelingVendor EvaluationTechnology evaluationFIT & FOTA Testing

Network ArchitectureNominal PlanningDetailed PlanningNetwork ThinningEquipment

ConfigurationDatabase Build and FillRF and Core Network

Site Acquisition Site DesignSite ConstructionEquip. InstallationEquip. CommissioningEquip. IntegrationTower, Microwave,

Fiber

Drive testsMeasurement activities

BenchmarkingPost-processingNetwork TuningOptimization – RF &

CoreE-911 Location Testing

Preventive Maintenance

Corrective Maintenance

Technical Support Network OperationsNetwork ManagementNetwork MigrationsField Maintenance