Reading - Session 12 Project Alpine June 2007
Transcript of Reading - Session 12 Project Alpine June 2007
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Coleago Consulting
MobileCo International
Project Alpine – The Potential Acquistion of One GmbH in Austria
Version 2.0 18 June 2007
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Project Alpine 1
Contents
• Executive Summary
• The Austrian Market
• One One GmbH – The Company to be Acquired
• Base Case Forecast
• Base Case Projected Financial Statements
• Options for Additional Value Creation
• Appendices
– Austrian Market Background, Tariffs, One Opex Analysis, T-Mobile & Mobilkom KPI‟s
– International Benchmarks
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Executive Summary
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Project Alpine 3
Executive Summary - Assumptions and Valuation
• Penetration was 111% at end „06, increases to 125%, incl.
mobile broadband (HSPA).
• Highly competitive 4 player MNO market plus initially 1
MVNO which exits the market by „09. By 2016 One
obtains 23.4% of gross adds and a 22.7% share of base.
• One will continues to host Tele2 MVNO with a market
share of 2.5% of gross adds until its exit in ‟09.
• As a result of Drei‟s push for market share annual prepaid
churn increases from a run rate of 28.5% in 2005 to 33.5%
in 2008, but postpaid churn falls from 19.1% to 18.8% in
2008 reflecting current market trends. From 2010 churn
reduces (2.0% points prepaid, 1.8% points for postpaid.
• Prices are low, increasing use of unlimited plans from
€19/month. Further drop in prices (CAGR minus 5.1%).
• ARPU ( €26.03 in „06) is declining slightly to €25.94 in „08,
before increasing to €29.00 by „16. Drivers are price
elasticity, increasing share of postpaid, fixed mobile
substitution and non-SMS data up from 6% of ARPU in „06
to 19% in 2016.
• SACs decrease from €82 in „06 to € 66 in 2016 SRCs from
6.0% of ARPU revenue to 7.2%.
• Opex in line with management case.
• Capex increases sharply in 2007/8 as per management
case before settling in long term at 10% of revenue.
• The base case scenario results in a temporary drop in
EBITDA margin to 21-20% in 2008-2009 due to
competitive pressure from Drei, before increasing to a
stable 24% in 2015.
• This produces a fair value DCF valuation of €1,064 million.
– WACC 8.72%, TV growth 1%.
• Downside risks may reduce value by €604 million (43.2%).
• Applying the challenger strategy increases the valuation
by €586 million (55%) to €1,650 million.
• The exit of Drei may increase the value by a further €350(88%) million.
Base Case Key Business Plan Assumptions Impact on Financials and Base Case Valuation
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Project Alpine 4
Summary of Base Case market evolution
2004 - 2005 2006 2007 - 2011 2012 - 2016
Growth renewed growth, penetrationreaches 105%
continued slow growth to111% penetration, wireless
broadband with HSDPA
penetration stabilises at 125% steady state
Compe-
tition
T-Mobile buys Tele.ring, Drei
and Tel2 impact, One
launches no frills Yesss
brand, increase in postpaid
Mobilkom outperforms, Drei
does well, gains for One,
minimal growth for Tele2, no
frills brand gain, postpaid up
Drei succeeds, Austria
becomes a 4 network player
market, with Tele2 exiting
Drei increases slightly to
16% of gross adds.
Regu-
latory
regulation to reduce mobile
termination rates
further reductions in mobile
termination rates
MTRs reaches 6.79 € cents,
CGAR -10%
further declines, CAGR -
5%
Churn Market churn reducing due to
trend to postpaid
steady +2 pts in ‟07 to ‟08, due to
Drei push for market share,
stable in 2009, then -1.5 pts
steady state
Prices significant price reductions Introduction of higher bundles
and unlimited tariffs, -25% av.
price per minute
CAGR -4.7% per minute, -
0.7% SMS, -18.8% Mbyte
Minutes down sl ightly,
SMS up slightly, CAGR
-1.4% per Mbyte
ARPU 4% increase in 2004, 1%
decline in 2005
11% decline CAGR 0.9%, price elastic for
prepaid, more postpaid, and
non-SMS data spend
CAGR 1.2%, price
elastic for prepaid, more
postpaid and data spend
SACs 15% increase in 2005, 2% in
2005
prepaid -79%, postpaid -9%,
but average up 34%
Decreasing reflecting existing
trends, CAGR 6.7%
slight increases, CAGR
0.3%
SRCs 4% of ARPU revenue 6.0% of ARPU revenue increasing to 6.5% of ARPU
revenue
further increase to 7.2%
of ARPU revenue
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Project Alpine 5
The management case shows considerably higher gross margin and thus results a 69%
higher EBITDA minus Capex by 2012.
• The difference in gross margin
is due to cost of sales, suchas interconnect cost, SACs
and SRCs.
• For example, by 2012
interconnect cost are 25.5%
higher in the MobileCo base
case.
€ Million Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12Model Revenue 666.4 682.6 713.6 759.5 788.2 815.3Management Revenue 658.5 681.6 710.6 747.6 781.1 813.3% Difference 1.2% 0.2% 0.4% 1.6% 0.9% 0.2%
Model Cost of Sales 289.7 298.1 310.1 322.1 331.8 344.4Management Cost of Sales 262.7 275.6 269.8 274.5 274.8 280.0% Difference 9.3% 7.5% 13.0% 14.8% 17.2% 18.7%
Model Gross Margin 376.7 384.5 403.5 437.4 456.4 470.9Management Gross Margin 395.8 406.0 440.8 473.0 506.2 533.4% Difference -5.1% -5.6% -9.2% -8.1% -10.9% -13.3%
Model Gross Margin % 56.5% 56.3% 56.5% 57.6% 57.9% 57.8%Management Gross Margin % 60.1% 59.6% 62.0% 63.3% 64.8% 65.6%
Model Opex 227.2 243.6 261.7 272.6 277.8 288.8Management Opex 232.9 247.7 262.0 273.0 278.3 290.0% Difference -2.5% -1.7% -0.1% -0.1% -0.2% -0.4%
Model EBITDA 149.5 140.9 141.8 164.8 178.6 182.0Management EBITDA 162.9 158.3 178.8 200.1 227.9 243.4% Difference -9.0% -12.3% -26.0% -21.4% -27.6% -33.7%
Model EBITDA % 22.4% 20.6% 19.9% 21.7% 22.7% 22.3%Management EBITDA % 24.7% 23.2% 25.2% 26.8% 29.2% 29.9%
% Point Difference -2.3% -2.6% -5.3% -5.1% -6.5% -7.6%Model Capex 147.8 112.2 83.8 86.2 83.4 86.3Management Capex 156.0 112.2 83.8 86.2 81.9 81.3% Difference -5.6% 0.0% 0.0% 0.0% 1.8% 5.8%
Model EBITDA minus Capex 1.7 28.7 58.0 78.7 95.2 95.7Management EBITDA minus Ca 6.9 46.0 95.0 113.9 146.0 162.1% Difference -317.6% -60.5% -63.6% -44.8% -53.3% -69.3%
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Project Alpine 6
DCF Valuation
WACC Notes
Risk free rate 4.47%Equity Risk Premium 6.00%
Cost of Equity 10.12%
Debt Spread Points 78
Debt Interest 5.25%
Tax Rate 0.00%
Cost of Debt 5.25%
Levered Beta 0.94
Debt 28.64%
Equity 71.36%
WACC 8.72%
Risk free rate based on yield of Austrian 10 year government bondBeta: MobileCo unlevered 0.7746, 28.64 Debt / Total Cap, 25% tax rate
Vodafone 1.089 (levered) 0.96 (unlevered),
Bouygues 1.047 (levered) 0.88 (unlevered)
Average unlevered 0.92
Debt: € 350 million
Effective tax rate is nil due to accumulated losses, otherwise 25%
Equity: Base on Merrill Lynch EV € 1,222 million
Date of Valuation: 1st January 2007
Valuation Based on DCF + TV Growth and DCF + EBITDA Multiple
---- TV Growth Rate ---- ---- EBITDA Multiples ----Enterprise Value € Million 0.50% 1.00% 1.50% 3.5 4.0 4.5
Discount Rate @ 8.22% 1,100 1,143 1,193 871 921 971Discount Rate @ 8.72% 1,028 1,064 1,106 842 890 938Discount Rate @ 9.22% 964 995 1,030 815 861 907
---- TV Growth Rate ---- ---- EBITDA Multiples ----EV / 2007 EBITDA 0.50% 1.00% 1.50% 3.5 4.0 4.5
Discount Rate @ 8.22% 7.4 x 7.6 x 8.0 x 5.8 x 6.2 x 6.5 xDiscount Rate @ 8.72% 6.9 x 7.1 x 7.4 x 5.6 x 6.0 x 6.3 x
Discount Rate @ 9.22% 6.4 x 6.7 x 6.9 x 5.5 x 5.8 x 6.1 x
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Project Alpine 7
One Base Case valuation range using comparables
• There are few similar pure
play mobile valuationcomparables which
means a valuation based
on comparables is
tentative.
• In the subsequent
analysis we rely on the
DCF + terminal value
growth rate model shown
on the previous page.
964
815
658
1,193
971
769
897
131
1,046
196
200 400 600 800 1,000 1,200 1,400 1,600 1,800
DCF + TV
DCF + EBITDA x
EV/EBITDA
EV/FCF
PE / EV
Average
€ Million
EV / 2007 EBITDA 1.3 x 2.7 x 4.0 x 5.4 x 6.7 x 8.0 x 9.4 x 10.7 x 12.0 x
EV / 2007 Sales 0.3 x 0.6 x 0.9 x 1.2 x 1.5 x 1.8 x 2.1 x 2.4 x 2.7 xEV / 2007 EBITDA - Capex 11.8 x 23.6 x 35.4 x 47.2 x 59.0 x 70.8 x 82.6 x 94.4 x 106.2 x
EV / 2007 Customer 94 188 282 377 471 565 659 753 847
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Project Alpine 8
1,06410
374
18 11487
604
0
200
400
600
800
1,000
1,200
B a
s e C a s e
L o s s o f W
h o l s a l e
L o w e r M a r k e t S h a r e
H i g h e r S A C s
& S R C s
L o w e r T a r i f f s
L o w e r I n t e r c o n .
R e v
e n u e
C
o m b i n e d
Downside valuation scenarios
* Combined value when modelled simultaneously
Downside Valuation Scenarios
We investigated a number of downside risks and modelled
their impact on the valuation of One
A: One loses the wholesale business of Tele2 (100% loss
of wholesale revenue)
B: One underperforms by 10% in terms of Market Share
of Gross Additions
C: Competition from Drei forces an increase of 5% in
SACs and SRCs
D: Price competition reduces tariffs by 5%
E: One fails to secure favourable terms from the regulator
for mobile termination rate regulation (5% reduction in
interconnect revenue)
Downside Valuation Scenarios
Impact of Downside Scenarios
If Drei succeeds in disrupting the market, this would have a
significant negative impact.
Based on the contribution of wholesale revenues from
Tele2 the loss of Tele2 as a wholesale customer would notbe disastrous.
The business case is not hugely impacted if termination
rates for One are ruled to be the same as Mobilkom‟s.
*
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Project Alpine 9
MobileCo proved that revenue can be increased
substantially while SACs can be lowered thus increasing
EBITDA.
We have modeled this the challenger strategy by:
Accelerate sales through distribution partners – share
of gross adds increased 2% from 2008, wholesale
partners receive a 20% discount on the prepaid tariff,
marketing spend reduced €2m.
Coverage increased outside of major ci ties – share of gross adds increased 1% from 2009, churn reduced 2%
and 1% for prepaid and postpaid respectively,
additional 100 sites and supporting opex
FTEs (Full Time Equivalent Staff) reduced through a
focus strategy – FTEs reduced by 189 in ‟08 and ‟09,
171 FTEs from customer care outsourced
ONE receives MobileCo roaming minutes – an
additional 61.7 million minutes
UMTS investment reduced – coverage limited to 91%
of pops and marketing spend reduced by €2m. 50%
slower growth of HUI take-up in ‟08 and „09
The challenger strategy (see box on right)
No roaming fee brand covering Austria, Germany,
France, Belgium targeting a segment of the market.
Optimise transmission network and generate opex
savings.
Other options such as sale of towers were investigated
but either do not add value or further information is
required to value the initiative.
Initiatives to Increase Value Challenger Strategy Assumption Set
Impact of Value Creation Initiatives
Applying the challenger strategy would considerably enhance the valuation
*
586
19377
1,064
1,6501,843 1,920 1,886
0
500
1,000
1,500
2,000
2,500
B a s e C a s e
C h a l l e n g e r
S t r a t e g y
N o r o a m i n g
f e e s
O p t i m i s e
t r a n s -
m i s s i o n
C o m b i n e d
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Project Alpine 10
586
1,650
2,001
1,064
0
500
1,000
1,500
2,000
2,500
B a s e C a s e
C h a l -
l e n g e r
D r e i E x i t
459
1,064
1,523
0
200
400
600
800
1,000
1,200
1,400
1,600
Base Case Drei Exit
The impact from 2009 onwards:
No further growth in Drei market share
One gains 3% points share of gross adds over 3 years,
reaching 27.9% by 2012
One and market churn for prepaid and postpaid
customers reduces by 1% in 2009
Postpaid handset subsidies 15% lower from 2009
onwards.
Drei is an unpredictable force in the Austrian market -
increasing investment risk and volatil ity of return
Current base case assumes that Drei maintains
significant competitive pressure on the Austrian market
This may be construed as a cautious assumption and
there is some upside should Drei be less aggressive
There is a small probability that Drei may exit in the long
run
The possibility of further market consolidation, plus the
upside from the challenger case makes this an excitinginvestment for MobileCo
Drei Market Exit Assumption Set
Drei Market Exit Valuation Impact
The view taken on Drei has a big impact on the value creation potential
The Impact of Drei Exit Compared
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Project Alpine 11
Executive Summary – Financial KPIs
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16
Financials - € Million Nominal
Revenue 667.6 650.6 666.4 682.6 713.6 759.5 788.2 815.3 840.7 863.2 880.3 892.7
Revenue Growth - -3% 2% 2% 5% 6% 4% 3% 3% 3% 2% 1%
Gross Margin 409.8 380.8 376.7 384.5 403.5 437.4 456.4 470.9 485.9 502.1 514.5 523.4Gross Margin Growth - -7% -1% 2% 5% 8% 4% 3% 3% 3% 2% 2%
Gross Margin 61% 59% 57% 56% 57% 58% 58% 58% 58% 58% 58% 59%
EBITDA 204.5 173.2 149.5 140.9 141.8 164.8 178.6 182.0 191.6 202.7 210.5 212.9Cumulative EBITDA - 173.2 322.7 463.6 605.4 770.3 948.9 1,130.9 1,322.5 1,525.3 1,735.7 1,948.7
EBITDA Growth - -15% -14% -6% 1% 16% 8% 2% 5% 6% 4% 1%EBITDA Margin 31% 27% 22% 21% 20% 22% 23% 22% 23% 23% 24% 24%
EBIT 47.5 29.6 12.7 5.2 14.3 27.0 35.3 31.0 53.3 97.1 101.0 100.8EBIT Growth - -38% -57% -59% 175% 90% 30% -12% 72% 82% 4% 0%
EBIT Margin 7% 5% 2% 1% 2% 4% 4% 4% 6% 11% 11% 11%
PBT 18.0 5.0 (11.4) (19.5) (10.2) 4.3 15.2 13.8 39.5 87.1 93.6 94.4PBT Growth - -72% -328% -71% 48% n/a 254% -9% 186% 120% 7% 1%PBT Margin 3% 1% 0% 0% 0% 1% 2% 2% 5% 10% 11% 11%
PAT 13.1 3.3 (11.4) (19.5) (10.2) 4.3 15.2 13.8 39.5 87.1 93.6 94.4PAT Growth - -75% -441% -71% 48% n/a 254% -9% 186% 120% 7% 1%PAT Margin 2% 1% 0% 0% 0% 1% 2% 2% 5% 10% 11% 11%
Cash Flow from Ops - 181.0 164.1 136.0 139.7 174.0 178.3 183.3 191.3 201.5 210.1 213.0Capex (Cash Flow) 61.6 147.8 112.2 83.8 86.2 83.4 86.3 88.4 90.5 91.6 92.7
Free Cash Flow - 119.4 16.3 23.7 55.9 87.8 94.9 97.0 102.8 111.0 118.5 120.2
FCF Growth - - -86% 45% 135% 57% 8% 2% 6% 8% 7% 1%Cumulative FCF - 119.4 135.8 159.5 215.4 303.2 398.1 495.1 597.9 708.9 827.4 947.6
Capex / Sales 10% 8% 20% 15% 11% 11% 10% 10% 10% 10% 10% 10%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Project Alpine 12
Executive Summary – Penetration, Market Share and Churn
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16
Mobile PenetrationPopulation '000 8,233 8,270 8,306 8,343 8,380 8,417 8,444 8,472 8,499 8,527 8,555 8,581
Mobile Subscribers '000 8,605 9,220 9,668 9,974 10,186 10,338 10,440 10,517 10,578 10,630 10,675 10,715
Mobile Penetration 105% 111% 116% 120% 122% 123% 124% 124% 124% 125% 125% 125%
Installed Base '000One 1,664 1,817 1,932 2,076 2,196 2,260 2,300 2,326 2,367 2,395 2,415 2,432
Mobilkom 3,392 3,631 3,749 3,782 3,789 3,756 3,726 3,700 3,639 3,592 3,553 3,524T-Mobile 3,097 3,180 3,268 3,335 3,372 3,374 3,352 3,333 3,314 3,298 3,284 3,274
Tele2 171 202 192 96 0 0 0 0 0 0 0 0
Drei 281 391 527 685 829 949 1,062 1,158 1,257 1,344 1,424 1,486Total 8,605 9,220 9,668 9,974 10,186 10,338 10,440 10,517 10,578 10,630 10,675 10,715
Share of BaseOne 19% 20% 20% 21% 22% 22% 22% 22% 22% 23% 23% 23%
Mobilkom 39% 39% 39% 38% 37% 36% 36% 35% 34% 34% 33% 33%
T-Mobile 36% 34% 34% 33% 33% 33% 32% 32% 31% 31% 31% 31%Tele2 2% 2% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0%
Drei 3% 4% 5% 7% 8% 9% 10% 11% 12% 13% 13% 14%Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Share of Gross AddsOne 25% 26% 24% 25% 25% 24% 24% 24% 24% 24% 23% 23%
Mobilkom 26% 35% 34% 32% 32% 32% 31% 31% 31% 31% 31% 31%
T-Mobile 36% 29% 32% 32% 31% 31% 31% 30% 30% 30% 30% 30%Tele2 4% 3% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Drei 8% 7% 9% 11% 12% 13% 14% 15% 15% 16% 16% 16%Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Churn
One Prepaid Churn 29% 34% 34% 34% 34% 33% 33% 32% 32% 31% 31% 31%One Postpaid Churn 23% 19% 19% 19% 19% 18% 18% 18% 17% 17% 17% 17%
One Blended Churn 25% 27% 26% 25% 26% 25% 24% 24% 23% 23% 23% 23%
One Customers by Type %
Prepaid 48% 45% 41% 44% 45% 45% 44% 43% 43% 42% 41% 41%Postpaid 43% 45% 50% 52% 54% 55% 56% 56% 57% 57% 58% 58%
Wholesale 9% 10% 9% 4% 0% 0% 0% 0% 0% 0% 0% 0%Machines 0% 0% 0% 0% 0% 0% 0% 1% 1% 1% 1% 1%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Project Alpine 13
Executive Summary – ARPU and Usage
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16
Monthly ARPU - € Nominal
Prepaid 9.85 9.60 9.43 9.12 9.03 9.11 9.21 9.30 9.48 9.64 9.77 9.84Postpaid 47.59 43.39 41.40 39.97 39.66 40.88 41.38 41.99 42.38 42.58 42.65 42.62
Average 29.28 26.03 26.17 25.94 25.69 26.53 27.09 27.68 28.16 28.53 28.82 29.00Prepaid ARPU - % Change - -2.5% -1.7% -3.4% -0.9% 0.8% 1.1% 1.0% 1.8% 1.7% 1.4% 0.8%
Postpaid ARPU - % Change - -8.8% -4.6% -3.4% -0.8% 3.1% 1.2% 1.5% 0.9% 0.5% 0.2% -0.1% AverageARPU - % Change - -11.1% 0.6% -0.9% -1.0% 3.3% 2.1% 2.2% 1.7% 1.3% 1.0% 0.6%
Monthly ARPU - € Nominal
Subscription & Voice 16.43 13.78 13.79 13.81 13.74 13.84 14.01 14.12 14.25 14.37 14.48 14.57
SMS 1.57 1.27 1.26 1.18 1.04 0.93 0.83 0.74 0.67 0.63 0.59 0.56Other Data 0.70 1.48 2.25 2.74 3.12 3.63 4.05 4.43 4.81 5.13 5.40 5.60
Content, VAS, Roaming 2.81 2.61 2.74 2.61 2.55 2.51 2.49 2.54 2.59 2.64 2.68 2.71Total From Customers 21.52 19.15 20.04 20.35 20.45 20.91 21.38 21.83 22.32 22.77 23.15 23.44
Interconnect 7.76 6.88 6.14 5.58 5.23 5.62 5.71 5.85 5.84 5.77 5.67 5.56Monthly ARPU 29.28 26.03 26.17 25.94 25.69 26.53 27.09 27.68 28.16 28.53 28.82 29.00
Monthly ARPU by Type of Service
Subscription & Voice 82% 78% 75% 74% 73% 73% 72% 72% 71% 70% 70% 69%
SMS 6% 6% 6% 5% 5% 4% 3% 3% 3% 2% 2% 2%Other Data 2% 6% 9% 11% 12% 14% 15% 16% 17% 18% 19% 19%
Content, VAS, Roaming 10% 10% 10% 10% 10% 9% 9% 9% 9% 9% 9% 9%Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Monthly Usage per Customer
Outbound Minutes 103 115 148 167 173 178 182 187 192 196 201 205Inbound Minutes 55 56 59 67 71 81 87 94 99 103 106 110
Total Minutes 158 171 207 234 244 259 269 281 291 299 307 315Total SMS 21 21 22 22 19 17 15 13 12 11 10 9Total MMS 1 1 1 2 2 3 4 4 5 6 6 6
Packet Data - Mbytes 0.4 1.7 7.9 15.3 20.8 27.5 33.8 39.9 44.5 48.2 51.2 52.8Video Telephony Minutes 0 0 0 0 0 0 0 0 0 0 0 0
Mobile TV Months 0 0 0 0 0 0 0 0 0 0 0 0PTT Calls 0 0 0 0 0 0 0 0 0 0 0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Project Alpine 14
Executive Summary – SACs and SRCs
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16
SAC per Gross Add - Nominal €
Prepaid SAC 17 4 2 3 3 3 2 1 1 1 1 1
Postpaid SAC 198 180 157 148 147 147 147 146 146 146 146 146
Average SAC 61 82 87 64 66 66 66 65 66 66 66 66 Annual Change - 34% 6% -27% 3% 1% 0% 0% 0% 0% 0% 0%
Prepaid Payback & Customer Lifetime Value Average Customer Life - Years 3.5 2.9 3.0 3.0 3.0 3.0 3.1 3.1 3.2 3.2 3.2 3.2
Net ARPU - Nominal € 7.8 7.3 7.2 7.1 7.0 6.9 7.0 7.0 7.2 7.3 7.5 7.5
Payback - Months 2.2 0.5 0.2 0.4 0.5 0.4 0.3 0.1 0.1 0.1 0.1 0.1
Customer Life Value Nominal € 312 252 257 250 246 250 255 262 273 283 288 291
Postpaid Payback & Customer Lifetime Value Average Customer Life - Years 4.4 5.2 5.3 5.3 5.3 5.5 5.6 5.6 5.9 6.1 6.1 6.1
Net ARPU - Nominal € 31.6 29.3 27.8 26.1 26.1 27.0 27.3 27.4 27.6 27.7 27.8 27.8Payback - Months 6.2 6.1 5.7 5.7 5.6 5.4 5.4 5.3 5.3 5.3 5.3 5.3
Customer Life Value Nominal € 1,457 1,662 1,615 1,516 1,519 1,623 1,693 1,700 1,803 1,868 1,874 1,874
Average Payback & Customer Lifetime Value
Average Customer Life - Years 3.9 3.7 3.8 3.9 3.9 4.0 4.1 4.2 4.3 4.4 4.4 4.4
Net ARPU - Nominal € 20.7 17.9 17.7 17.5 17.4 17.9 18.2 18.4 18.7 19.0 19.2 19.3
Payback - Months 2.9 4.6 4.9 3.6 3.8 3.7 3.6 3.6 3.5 3.5 3.4 3.4
Customer Life Value Nominal € 915 709 725 759 750 794 830 854 900 936 951 962
Retention Cost per Customer / Year - Nominal €
Prepaid 4.50 4.00 3.25 3.30 3.42 3.55 3.68 3.81 3.95 4.09 4.20 4.29
Postpaid 50.60 47.59 42.60 42.26 43.22 44.00 44.82 45.78 46.60 47.53 48.30 48.93Blended 31.19 26.91 24.81 26.55 26.96 27.56 28.36 29.22 30.03 30.87 31.64 32.31
SACs & SRCs € Million Nominal
SACs 34.7 49.4 51.3 40.5 42.6 40.4 38.9 37.9 38.3 37.3 37.2 37.3SRCs 34.9 32.6 33.3 38.2 41.7 45.4 48.5 51.0 53.6 56.5 58.6 60.4SACs + SRCs 69.7 82.0 84.6 78.7 84.3 85.8 87.3 89.0 91.9 93.8 95.8 97.7
Subs. Acquisition & Retention CostSACs / ARPU Revenue 6.2% 9.1% 8.7% 6.5% 6.5% 5.7% 5.2% 4.9% 4.8% 4.6% 4.5% 4.4%SRCs / ARPU Revenue 6.3% 6.0% 5.7% 6.1% 6.3% 6.4% 6.5% 6.6% 6.8% 6.9% 7.0% 7.2%
SACs+SRCs / ARPU Reven. 12.5% 15.1% 14.4% 12.6% 12.8% 12.1% 11.8% 11.6% 11.6% 11.5% 11.5% 11.6%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Coleago Consulting
Project Alpine 15
Executive Summary – Tariffs and Interconnect Rates
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16Revenue: Average Tariffs - € Nominal
Outbound Minute 0.16 0.12 0.09 0.08 0.08 0.08 0.08 0.08 0.07 0.07 0.07 0.07
Interconnect per Minute 0.14 0.12 0.10 0.08 0.07 0.07 0.07 0.06 0.06 0.06 0.05 0.05
Outbound SMS 0.10 0.09 0.08 0.08 0.08 0.08 0.08 0.08 0.09 0.09 0.09 0.09Packet Data per Mbyte 1.41 0.74 0.25 0.16 0.13 0.12 0.11 0.10 0.10 0.10 0.09 0.09
Change in Nominal Average TariffsOutbound Minute - -24.7% -22.2% -11.5% -3.7% -2.0% -1.2% -2.1% -1.5% -1.5% -1.5% -1.5%
Interconnect per Minute - -13.6% -16.0% -19.5% -11.6% -5.3% -5.2% -5.1% -5.1% -5.1% -5.1% -5.1%Outbound SMS - -14.7% -5.0% -3.5% 0.5% -0.5% 0.8% 2.0% 3.5% 1.2% 1.1% 2.2%
Packet Data per Mbyte - -47.9% -66.4% -36.5% -15.8% -11.1% -8.7% -7.0% -2.8% -1.6% -1.2% 0.0%
Interconnect Cost Per Outbound Minute
Interconnect Cost - Nominal € 0.105 0.094 0.074 0.063 0.056 0.053 0.052 0.051 0.049 0.047 0.045 0.044
Change in Nominal Terms - -11% -21% -14% -11% -5% -2% -2% -3% -5% -4% -4%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Coleago Consulting
Project Alpine 17
The Austrian telecoms end-user market is worth €1.4 billion and is showing very small
signs of decline
• The sharp decline in fixed voice telephony revenue
is largely offset by broadband and mobile.However, the overall telecoms market value is
starting to show signs of decline.
• There is already a substantial trend away from fixed
to mobile.
• The mobile market growth in 2006 is estimated to
be around 1.6%, compared to 5.5% in 2005.
• Mobile price pressure with introduction of unlimited
tariffs in 2006 and very low per Mbyte prices.
Fixed Phone & Boradband Penetration
37.3% 36.9% 36.6% 36.2% 36.0% 35.7% 35.2%
9.4% 10.2% 10.9% 11.7% 12.7% 13.5% 14.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006
Fixed Lines per Capita
Broadband Con. Per Capita
End-User Market Value
365 358 345 336 338 341 324
209 203 192 183 187 190 176
95 100 104 111 113 126 127
731 761 745 777 771 775757
1,401 1,421 1,386 1,407 1,409 1,4321,383
0
200
400
600
800
1,000
1,200
1,400
1,600
Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006
€ M i l l i o n
Fixed Line Rental Fixed Call Charges Broadband Mobile Line Rent & Calls
Market Value Value Year
on Year Change Q4 2005 Q1 2006 Q2 2006
Fixed Line Rental -7.5% -4.6% -6.1%Fixed Call Charges -10.8% -6.2% -8.3%
Broadband 18.9% 25.6% 21.4%Mobile Line Rent & Calls 5.5% 1.8% 1.6%Total 0.6% 0.7% -0.2%
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Project Alpine 19
The mobile market is innovative and highly competitive with relatively tariffs, high MOUs
and well advanced towards fixed-mobile substitution
• Highly competitive 4 MNO +1 MVNO market and
discount brands (Bob, eety, Yesss, etel,Schwarzfunk), T-Mobile maintains the tele.ring
brand as a low cost brand.
• Mobilkom and T-Mobile kept lead during „06 while
One increased its market share to nearly 20%.
• Tele2, MVNO hosted by One, gained little market
share finished the year with 202k customers.
• Driven by price discounts, the impact of Dreiincreased its customer base from 281k to 390k.
• Postpaid customers account for over half the
market. The three main players (T-Mobile,
Mobilkom, One) increased the postpaid proportion
from 51.3% in 2003 to 58.8% in 2006
• Average churn is relatively low, high proportion of
postpaid, 2 year contracts, One above aver. churn.
• Price pressures: Market ARPU declined by around
6%, unlimited tariffs are becoming prevalent.
• SACs are relatively low, with Mobilkom reporting a
€78 average and SRCs are reasonable
Key Market Facts 2003 2004 2005 2006
Population '000 8,118 8,175 8,233 8,270Mobile Subs '000 7,257 7,925 8,605 9,220Penetration 89% 97% 105% 111%3G Enabled 0% 2% 10% 22%
Market Share
One 20% 19% 19% 20%Mobilkom 44% 41% 39% 39%T-Mbile + Tele.ring 36% 37% 36% 34%Drei 0% 2% 3% 4%Tele2 1% 1% 2% 2%
Postpaid %
One 56.1% 56.1% 47.3% 47.3%Mobilkom 53.2% 54.3% 56.9% 60.8%T-Mbile + Tele.ring 46.8% 48.2% 50.0% 61.7%
Churn %
One n/a 25% 26% 28%Mobilkom 16% 17% 17% 17%T-Mbile + Tele.ring 19% 20% 20% 21%
ARPU € / Month
One 35 34 31 28Mobilkom 37 37 37 34T-Mobile 31 34 34 33
Data % of ARPUOne n/a 10.2% 11.5% 13.7%Mobilkom 11.4% 12.6% 17.4% 21.8%T-Mbile + Tele.ring 10.0% 9.0% 11.0% 13.0%
SACs €
One n/a 177 60 84Mobilkom 92 110 107 78T-Mbile + Tele.ring 121 133 141 128
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Project Alpine 20
• 51 shops
• 43 shops
• 60 shops
• 21 shops
• 30 shops
MNO owned shops play a major role in distribution, but distribution partners are also
important
• Operator owned shops are concentrated in major
cities.
• At the end of 2006, 200 out of One Group‟s 870 full
time staff worked in One World Shops.
• Large retailers such as Saturn and Media Markt are
significant as well as small chains such as
Niedermeyer and Cosmos.
• A1 has a distribution deal with the post office, whichdelivers reach into small towns and villages.
MNO Own Shops
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One GmbH – The Company to be Acquired
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g g
Project Alpine 22
One GmbH Overview
• One focuses on customer facing activities, strong
customer care and distribution. Multi-brand (Yesss) and
MVNO (Tele2, eety) strategy to increase to totalnetwork customers.
• End 2006 population coverage of 98% with 4,100 BTS,
UMTS coverage 62% with 1,400 node Bs, HSDPA
mobile broadband coverage in key cities.
• 3.2 MHz GSM 900 & 29 MHz GSM 1800spectrum. Total
of 32.2 MHz similar to Mobilkom / T-Mobile, but relies
more on 1800 MHz, giving slight cost disadvantage. 2 x15 MHz UMTS frequencies.
• At the end of June 2006 ONE had roaming agreements
with about 311 partners in 144 countries.
• Distribution through 51 ONE Worlds (One owned shops)
and about 1,600 other distribution points.
• ONE Bank GmbH, 100% subsidiary.
• Paybox: 16.67% stake (joint m-payment solution
together with Mobilkom).
• eety-Telecommunications GmbH: 25.1% stake. Low-
cost international services to ethnic communities,
launch Apr. 06.
• E.ON (50.10%),• Telenor (17.45%)
• Orange (17.45%)• TDC (15%).
One Shareholders
One Key Facts 2003 2004 2005 2006
Revenue € Million 664 705 652 650
Growth % 7.1% 6.2% -7.5% -0.2%
ARPU € / Month 35 34 31 28Growth % n/a -2.9% -8.1% -10.8%
EBITDA € Million 196 202 175 161Growth % n/a 2.7% -13.2% -8.2%Margin 29.6% 28.6% 26.8% 24.7%
Capex € Million 93 70 68 62% of Revenue 14.1% 9.9% 10.4% 9.5%
Staff 1,322 900 857 870Growth % -5.6% -32.0% -4.7% 1.6%
Subscribers '000 1,430 1,502 1,664 1,817MVNO Users '000 47 97 171 202Network Users '000 1,477 1,599 1,834 2,019
Growth % 10% 8.3% 14.7% 10.1%
Market Share 19.7% 19.0% 19.3% 19.6%
Postpaid Customers 56.1% 56.1% 47.3% 47.3%
One Group Brands MVNO Brands
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Project Alpine 23
One GmbH Timeline 1/2
• Aug 1997: Connect Austria awarded third GSM license for AS 2.3 billion / € 167 million
• Oct 1998: Commercial launch of its Nokia-supplied GSM 1800 network
• Nov 1999: Launch of wireless Internet services (i-ONE)
• Nov 2000: 3G UMTS license (AS 1.652 billion / € 120 million )
• Feb 2001:Launch of GPRS (Nokia platform)
• Oct 2001: Acquisition of eWave.at Telekommunikations AG (broadband wireless operator) to bundle W-
Lan/Wi-Fi service with 3G. As the plan did not work out, eWave (renamed as Yesss!) functions as a low-
cost voice telephony service and a discount enhanced mobile service provider.• Apr 2002: Partnership with Liwest (broadband cable operator) and launch of Trio 24 (package of fixed-line,
Internet & mobile telephony service)
• Jul 2003: Launch of W-LAN / Wi-Fi services (300 hotspots, ONE W-LAN)
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Project Alpine 24
One GmbH Timeline 2/2
• Nov 2003: Seven-year outsourcing contract with Alcatel for management & maintenance of its network
( €472 million, took effect from January 1, 2004) for a seven year period to 2010. Around 200 staff were
transferred from One to Alcatel. Alcatel has taken full responsibility for: The core network, mobile and fixedaccess network. Alcatel has taken turnkey responsibility for the planning and rollout of network extensions
of the GSM and UMTS networks the network control centre and all its field activities on its network. Alcatel
operates all sites. The contract also covers facility management for One‟s headquarters, regional offices
and One shops. One can order capacity from Alcatel at an agreed price, with an agreed quality and in the
agreed geography.
– In 2006, One decided to purchase back transmission network assets from Alcatel.
• Dec 2003: Launch of 3G UMTS service in 7 cities (25% population coverage).
• Oct 2004: Completion of financing through a € 700 million syndicated bank loan facility.
• Apr 2005: Launch of YESSS, One‟s no-frills ESP. Distributes via uses Hofer's retail sales presence (370
outlets in Austria), a retail discount chain, part of the ALDI group. YESSS is 100% owned by One.
• June 2005: ONE Bank GmbH, a 100% ONE subsidiary, forming the basis of mobile payment applications.
• Jan 2006: One outsourced the operation of the IT to Siemens, transferring 28 employees to Siemens.
• Jun 2006: Launch of HSDPA mobile broadband. One will invest (Ericsson) during 2006, 2007, 2008 €260
million to roll out mobile broadband (up to 7.2 Mbit/s). By end 2008, population coverage will reach 90%
• Jun 2006: Launch of aggressively prices 4:0 tariff with unlimited elements.
• Nov 2006: “One to go” distribution arrangement through Tschibo.
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Project Alpine 25
Around 10% of One’s network customer base at the end of 2006 are wholesale MVNO
customers.
One Network Customer Base
• Yesss is a service provider rather than an
MVNO. It is a wholly owned subsidiary
consolidates in One‟s accounts. Consequently
we have modelled Yesss customer as One
customers, i.e. all costs and revenue appear.
• Tele2 ad eety are MVNOs. We assumed the
only revenue One receives are the wholesale
traffic revenue. There are also no cost of sales
such as SACs and SRCs. Therefore we have
modelled MVNO revenue as wholesale
revenue.
• We have assumed that Tele2 pays One for the
use of the radio network, regardless of the
direction of traffic and that Tele2 receives andpays its own interconnect revenue and cost.
• Key indicators such as ARPU, MOUs, churn
SACs, SRCs etc are calculated on One‟s
customer base including Yesss, which correctly
reflects business situation.
There are a number of service providers / enhancedservice providers in the Austrian market, but they are
not MVNOs. Examples include, Bob and Schwarzfunk.
Service Providers
One Netw ork Customers
811.0 842.1 787.5 871.0
619.0 660.1558.5 423.3
34.0
317.8488.797.2
170.8
202.3
47.0
1,477.01,599.4
1,834.5
2,019.2
0
500
1,000
1,500
2,000
2003 2004 2005 2006
C u s t o m e r s ' 0 0 0
One Postpaid One Prepaid Yesss Pos tpaid Yesss Prepaid MVNO
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Project Alpine 26
A mixed marketing performance
• In line with market trends ARPU declined and the
share of non-voice ARPU increased
– At the end of 2006 One had 16,000 UMTS data
card customers
• Prepaid and postpaid SACs declined.
– There is evidence that SACs declined in the
Austrian market as a whole.
• One‟s churn is above market average.
ARPU
3 5
3 4
3 1
2 8
10.2%
11.5%
13.7%
0
5
10
15
20
25
30
35
40
2003 2004 2005 2006
A R P U
0%
2%
4%
6%
8%
10%
12%
14%
16%
ARPU Non-Voice ARPU %
Annual Churn
24.6%26.5%
27.6%
0%
5%
10%
15%
20%
25%
30%
2004 2005 2006
SACs284
210196
4936
18
0
50
100
150
200
250
300
2004 2005 2006
€
Pos tpaid SACs Pr epaid SACs
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Project Alpine 27
Financially, One did not perform well during past two years
• The Austrian market is highly competitive and as a
result One‟s revenues were flat.
• Due to tariff declines and higher than average churn
One‟s performance showed a negative development
during the past two years.
– EBITDA and EBITDA margin declined.
– Gross margin (defined as revenue minus direct
variable costs) declined in absolute and in
percentage terms.
4 2 0
4 4 1
3 9 8
3 9 0
63% 63% 61% 60%
0
50
100
150
200
250
300
350
400
450
500
2003 2004 2005 2006
€ M i l l i o n
0%
10%
20%
30%
40%
50%
60%
70%
Gross Margin Gross Margin %
6 6
4
7
0 5
6 5
2
6 5 0
1 9 6
2 0 2
1 7 5
1 6 1
29.6%
26.8%
24.7%
28.6%
0
100
200
300
400
500
600
700
800
2003 2004 2005 2006
€ M i l l i o n
0%
5%
10%
15%
20%
25%
30%
Revenue EBITDA EBITDA Margin
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Project Alpine 28
Despite the less than satisfactory performance at EBITDA level, cash flow increased to
2005 due to lower capex. However, the situation in 2007 will be very different.
• Lower capex lead to an increase in free cash flow.
However, in 2006 free cash flow also declined,despite slightly lower capex.
• During 2007, capex will be significantly higher due
to
– UMTS investment,
– the buy back of transmission network assets
from Alcatel.
• According to the management case, capex will jump
to €156 million and free cash flow will drop to €22
million.
• However, the savings in opex on the outsourcing
contract will have a positive impact on EBITDA.
9 3
7 0
6 8
6 2
6 4
9 8
1 2 8
1 0 8
0
20
40
60
80
100
120
140
2003 2004 2005 2006
€ M i l l i o n
Capex Free Cash Flow
14%
10%10%
9%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2003 2004 2005 2006
C a p e x
/ S a l e s
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One Base Case Forecast
The “as is” case
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Project Alpine 30
Total market and market share
• Penetration increasing to 125%, including data
cards• Tele2 MVNO customer modelled as competing
operator, wholesale revenue accrued to One
• One increases to 23% share of the base withown customers.
• Tele2 assumed to exit the market completely byend ‟08.
• Drei 16% of gross adds, reaching 14% of baseby 2016.
Mobile Penetration
111%116% 120% 122% 123% 124% 124% 124% 125% 125% 125%
0%
20%
40%
60%
80%
100%
120%
140%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
P e n e t r a t i o n o f P o p u l a t i o n
Market Share of Gross Additions
25% 26%24% 25% 25% 24% 24% 24% 24% 24% 23% 23%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
One Mobilkom T-Mobile Tele2 Drei
Market Share of Base
19% 20% 20% 21% 22% 22% 22% 22% 22% 23% 23% 23%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
One Mobilkom T-Mobile Tele2 Drei
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Project Alpine 31
One customers and churn
• One‟s share of base gradually increases towards
its share of gross adds.• Churn assumed to decrease by 2 % points
during 2007/2008 as a result of a favourable mix
shift towards postpaid and further reductions to
23% by 2016.
• Churn settling in at 31% for prepaid and 17% for
postpaid.
Churn 2002 2003 2004 2005 2006
T-Mobile Monthly Churn Average 1.7% 1.8% 1.8% 1.9% 1.9%Postpaid 1.3% 1.4% 1.3% 1.0% 1.0%
Mobilkom Annual Churn Average 17.0% 16.1% 17.0% 17.2% 17.2%Postpaid 10.2% 10.8% 11.9% 10.9% 10.9%Prepaid 24.2% 22.0% 22.8% 25.2% 25.2%
One Group Annual Churn
Average n/a n/a 24.6% 26.5% 27.6%
One Customers '000
2,0192,125 2,174 2,200 2,267 2,310
2,339 2,382 2,412 2,433 2,452
0
500
1,000
1,500
2,000
2,500
3,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Prepaid Postpaid Wholesale Machines
Churn & Disconnections
4 5 1
4 7 6
4 9 2 5
3 0
5 4 9
5 5 1
5 5 3
5 4 2
5 3 8
5 4 2
5 4 5
0
100
200
300
400
500
600
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
D i s c o n n e c t i o n s
0%
5%
10%
15%
20%
25%
30%
One Disconnections '000 One Churn % of av . Base
Historic Reported Churn Rates
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Project Alpine 32
ARPU
• ARPU declines, slightly driven by lower voice per minute rates and lower interconnect rates.
• Beyond 2009 the decline in voice ARPU offsetby:
– Price elasticity of demand, minutes of useincrease substantially.
– Non-voice, which increases to 30% by2016, with non-SMS data ARPU accountingfor 19%.
T-Mobile ARPU € 2003 2004 2005 2006
Prepaid 12 11 11 10Postpaid 53 59 58 49Blended 31 34 34 33
Mobilkom ARPU € 2003 2004 2005 2006
Prepaid 11 11 11 10Postpaid 60 60 57 52Blended 37 37 37 34
One ARPU € 2003 2004 2005 2006
Prepaid n/a 12 11 11Postpaid n/a 50 50 47Blended n/a 34 33 33
Monthly ARPU - € Nominal
29.3
26.026.2
25.9 25.726.5 27.1 27.7 28.2 28.5 28.8 29.0
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Subscription & Voice SMS Other Data Content, VAS, Roaming Interconnect
% of ARPU Non-SMS Data
2%
6%
9%
11%12%
14%15%
16%17%
18%19% 19%
0%
5%
10%
15%
20%
25%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Historic Reported ARPU
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Project Alpine 33
Voice tariff 2006-2016 CAGR minus 5.1%, and data tariff CAGR minus 18.6%
• Unlimited tariffs are increasingly common,depressing the effective per minute prices.
• Drei exerts price pressure in prepaid andpostpaid, but Mobilkom first introduced anunlimited tariff.
– For prepaid low users One‟s per minuteprice is 40 to 20 cents compared to Dreiwith 20 cents
– For high users One lowest postpaid minuteis effectively zero cents for calls to fixed and
4 cent for all to other mobiles. – Billing interval is generally 60 seconds for
the 1st minute and 30 seconds thereafter.
• Average per Mbyte tariffs are projected todecline sharply.
– Austria had historically low GPRS pricesand differentiated by APN, i.e. WAP vs.WEB.
– An increasing proportion of traffic isgenerated by mobile broadband which ispriced low.
– Packet data tariffs for low volume handsettraffic (WAP) will decline sharply.
Outbound Minute Voice Tariff (Exl. Roaming) - Nominal
0.16
0.12
0.090.08 0.08 0.08 0.08 0.08 0.07 0.07 0.07 0.07
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
0.18
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€
Average Packet Data Tariff per Mbyte - Nominal
0.74
0.25
0.160.13 0.12 0.11 0.10 0.10 0.10 0.09 0.09
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€
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Project Alpine 34
Interconnect rates are regulated to decline further, One termination rate 2006-2016
CAGR minus 6.5%
• Mobile termination rates for the period 2004 to
2006 have been regulated as cost orientedaccording to the LRAIC of a single hypothetical
efficient operator, Mobilkom, to reach 6.79 cents
in 2007.
• The regulator proposes that the figure of 6.79
cents is to be reached on a Gliding Path Model
by all operators by 2008. However, as part of the
current consultation, this is being opposed by
One, who is seeking a higher (asymmetric) MTR.
• Currently there are several ongoing proceedings
in order to recalculate the LRAIC-level and
therefore also the Gliding Path Model for the
upcoming years.
• In the model we have assumed that based on
the strength of their argument, One will retain a
slightly higher termination rate for a longer period.
• Fixed termination rates are already low and
further declines have not been factored in.
Mobile Termination Rates
€ Cent
to
31.10.05
to
31.12.05
to
30.6.06
to
31.12.06
One 13.80 13.28 12.28 11.28Mobilkom 10.86 10.34 9.34 8.34T-Mobile 13.18 12.66 11.66 10.66tele.ring 13.80 13.80 12.80 11.80
Hutchison 19.62 19.62 17.79 15.95
Telekom Austria Fixed Termination € Cent Peak Off-Peak
Local 0.820 0.480Single Transit 1.280 0.710Double Transit 2.250 0.870
Average per Minute Interconnect Revenue - Nominal
0.14
0.12
0.10
0.080.07 0.07 0.07 0.06 0.06 0.06 0.05 0.05
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€
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Project Alpine 35
Aggressive data pricing will drive mobile broadband adoption
One HSDPA Data Card Starter Surfer XL Unlimit.
Monthly Fee 10.00 28.00 40.00 75.00 Incl MB for WEB 100 500 1,024 10,000 Implied Price per Mbyte 0.250 0.160 0.112 0.025 Outside Bundle Mbyte WEB 0.400 0.200 0.200 0.200 Outs. Bund. per 10 kb WAP 0.200 0.200 0.200 0.200
Drei HSDPA Datacard S M L XXL PrepaidEuro / Month 3.50 9.50 14.50 24.50 - Mbytes Included 30 250 500 3,000 - Implied Euro / Mbyte 0.117 0.038 0.029 0.008 -
Outside Bundle Mbyte 0.400 0.300 0.100 0.100 0.80 Unused Mbyte Carry Over no no no no n/aBilling Interval kbytes 51.2 51.2 51.2 51.2 51.2
• All Austrian operators have an
aggressive mobile broadband strategy
with extremely low HSDPA data card
offerings
• One‟s largest data bundle offers an
implied per Mbyte price of 2.5 cents
• Drei‟s largest bundle has a super low
implied per Mbyte price of 0.8 cents
• Low user WAP pricing per Mbyte isconsiderably higher, e.g. € 20 / Mbyte
for One
T-Mobile Mobil Internet Small Medium XL
Euro / Month 17.00 35.00 45.00 Mbytes Included 250 800 1,500 Implied Euro / Mbyte 0.068 0.044 0.030 Outside Bundle Mbyte 0.500 0.200 0.200 Unused Mbyte Carry Over no no no
Billing Interval kbytes 50 50 50
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Project Alpine 36
Trends in voice minutes and data traffic
• MOUs are increasing and are projected to
increase further driven by a decline in tariffs and a
significant price elasticity effect.
– Prepaid price elasticity coefficient -0.80,
declining to -0.54
– Postpaid assumed at -0.79, declining to -0.45
• The dramatic decline in per Mbyte prices driven by
relatively low priced data card internet traffic.
Mobilkom Chargeable MOUs
104109
119 123 124135
156
0
20
40
60
80
100
120
140
160
180
2000 2001 2002 2003 2004 2005 2006
M i n u t e s / C u s t o m e r / M o n t
Minutes of Use per Customer per Month
1 0 3
1 1 5
1 4 8 1
6 7
1 7 3
1 7 8
1 8 2
1 8 7
1 9 2
1 9 6
2 0 1
2 0 5
5 5 5
6
5 9
6 7 7
1 8 1 8 7 9
4 9 9
1
0 3
1 0 6
1 1 0
158171
207
234244
259269
281291 299 307 315
0
50
100
150
200
250
300
350
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
I n & O u t M i n u t e s
Outbound Minutes Inbound Minutes
Packet Data Traffic per Customer per Month
2
8
1521
28
34
40
4548
51 53
0
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
M b y
t e s p e r M o n t h
Historic Reported MOUs
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Project Alpine 37
Revenue CAGR 3.2%
• The net effect of the assumptions results in a
steady increase in revenue (CAGR 3.2%).• Revenue from customers remain the most
important element with wholesale revenues and
interconnect revenues both declining
• From a segment perspective, revenues related to
postpaid customer are of overwhelming
importance.
Revenue
668 651 666 683714
760 788
815 841 863 880 893
0
100
200
300
400
500
600
700
800
900
1,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€ M i l l i o n
Revenue by Source
0%
10%
20%30%
40%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
From Cus tomer s Inter con. & V isitor Roam. 3r d Par ty & Telematic sWholesale Equipment Other Revenue
Revenue by Source
1 6 %
1 8 %
1 7 %
1 7 %
1 8 %
1 7 %
1 7 %
1 6 %
1 6 %
1 6 %
1 6 %
1 5 %
7 0 %
6 9 % 7
4 %
7 8 %
7 9 %
8 0 %
8 1 %
8 1 %
8 1 %
8 2 %
8 2 %
8 2 %
1 4 %
1 3 %
8 %
5 %
4 %
3 %
3 %
3 %
3 %
3 %
3 %
3 %
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Prepaid Related Postpaid Related From Other Sources
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Project Alpine 38
Cost of Sales: Subscriber Acqusition Costs (SACs) and Subscriber Retention Costs
(SRCs)
• Based on benchmarks from T-Mobile Austria and
Mobilkom, SACs for prepaid and postpaid havedeclined in „06, however due to an increased
share of postpaid One‟s blended SAC increased.
• SACs are expected to remain flat during the
remainder of the forecast period
• Increasing focus on customer retention leads to
higher SRCs.
T-Mobile SAC € 2003 2004 2005 2006
Prepaid 41 47 37 14Postpaid 211 233 245 221 Average 121 133 141 128
Mobilkom SAC € 2003 2004 2005 2006
Average 92 110 107 78
One SAC € 2003 2004 2005 2006
Prepaid n/a 49 36 18Postpaid n/a 284 210 196 Average n/a 177 149 172
Subscriber Acquisition Cost (Nominal) & Payback
8 2 8
7
6 4 6
6 6 6
6 6
6 5
6 6
6 6
6 6
6 6
0
10
20
30
40
50
60
70
80
90
100
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€
0.0
1.0
2.0
3.0
4.0
5.0
6.0
M o n t h s t o P a y b a c k
Average SAC Payback - Months
SACs & SRCs % of ARPU Revenue
0%
2%
4%
6%
8%
10%
12%
14%
16%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
SRC SAC SAC & SRC
Historic Reported SACs
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Project Alpine 39
From revenue to gross margin
• The net effect of the assumptions are a slight
increase in revenue during the forecast periodand also increasing cost of sales.
– Cost of sales are defined as costs that vary
directly with customer activity, such as
interconnect cost or SACs
• The largest cost of sales item is interconnect,
accounting for around 18-16% of cost of sales,
following by SACs and SRCs.
• The margin on off-net minutes narrows, but an
increasing number of incoming minutes and flat
SACs results in a modest increase in gross
margin.
• Overall cost of sales increase slower than
revenue and the gross margin settles at 58-59%.
• Within the overall cost of sales trend certain costsare becoming more important, notably
interconnect and SRCs.
Cost of Sales & Gross Margin
( 2 7 0 )
( 2 9 0 )
( 2 9 8 )
( 3 1 0 )
( 3 2 2 )
( 3 3 2 )
( 3 4 4 )
( 3 5 5 )
( 3 6 1 )
( 3 6 6 )
( 3 6 9 )
59%57% 56% 57% 58% 58% 58% 58% 58% 58% 59%
(400)
(350)
(300)
(250)
(200)
(150)
(100)
(50)
02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€ M i l l i o n
0%
10%
20%
30%
40%
50%
60%
70%
Total Cost of Sales Gross Mar in
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Project Alpine 40
From gross margin to EBITDA
• Opex assumptions are in line with the
management case.• Operating expenses increase throughout the
forecast period
• Increased competition and underperformance by
One results in margins falling to 20% in 2009
before recovering to settle at 24% by the end of
the forecast period.
• EBITDA 2006-2016 CAGR plus 2.1%.
Cost of Sales , Operating Expenses, EBITDA
( 2 5 8 )
( 2 7 0 )
( 2 9 0 )
( 2 9 8 )
( 3 1 0 )
( 3 2 2 )
( 3 3 2 )
( 3 4 4 )
( 3 5 5 )
( 3 6 1 )
( 3 6 6 )
( 3 6 9 ) ( 2
0 5 )
( 2 0 8 )
( 2 2 7 )
( 2 4 4 )
( 2 6 2 )
( 2 7 3 )
( 2 7 8 )
( 2 8 9 )
( 2 9 4 )
( 2 9 9 )
( 3 0 4 )
( 3 1 0 )
(800)
(700)
(600)
(500)
(400)
(300)
(200)
(100)
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€ M i l l i o n
0%
5%
10%
15%
20%
25%
30%
35%
Total Cost of Sales Operating Expenses EBITDA Margin
EBITDA
2 0 4
1 7 3
1 4 9
1 4 1
1 4 2 1
6 5
1 7 9
1 8 2
1 9 2 2 0
3 2 1
0
2 1
3
31%
27%
22%21% 20%
22% 23% 22% 23% 23% 24% 24%
0
50
100
150
200
250
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€
M i l l i o n
0%
5%
10%
15%
20%
25%
30%
35%
EBITDA EBITDA Margin
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Project Alpine 41
Capital expenditure
• There is a sharp increased in capex in 2007 and
2008, mainly due to UMTS / HSDPA investment.• Long term capex / sales 10%.
• T-Mobile is currently spending 13% of revenue on
capex, whereas the figure for Mobilkom, the
market leader, is only 8%.
Historic Reported Capex / Sales
2003 2004 2005 2006
T-Mobile 11% 15% 16% 13%Mobilkom 13% 6% 7% 8%One n/a 10% 10% 9%
Capital Expenditure ( Cash Flow)
6 2
1 4 8
1 1 2
8 4
8 6
8 3
8 6
8 8
9 1
9 2
9 3
8%
20%
15%
11% 11%10% 10% 10% 10% 10% 10%
0
20
40
60
80
100
120
140
160
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€ M i l l i o n
0%
5%
10%
15%
20%
25%
C a p e x / S a l e s
Capex (Cash Flow ) Capex / Sales
EBITDA minus Capex
112
2
29
58
79
95 96103
112119 120
0
20
40
60
80
100
120
140
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
€ M i l l i o n
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One Base Case Projected Financial Statements
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Project Alpine 43
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16
Profit & Loss Account - Nominal € Mi llion
Revenue
Net Connection Fees 6.8 9.0 9.3 9.7 10.1 9.6 9.4 9.2 9.4 9.2 9.2 9.3
Subscription & Voice 312.2 287.9 310.2 332.2 352.3 370.0 383.4 392.0 401.3 410.6 417.9 423.7SMS 29.9 26.6 28.4 28.5 26.8 24.8 22.6 20.5 18.8 17.9 17.1 16.2
Other Data 13.2 30.9 50.6 66.0 79.9 97.1 110.7 122.9 135.4 146.7 156.0 162.9
Content, VAS, Roaming 53.4 54.6 61.5 62.9 65.3 67.1 68.1 70.5 72.9 75.3 77.2 78.9
From Customers 415.5 408.8 460.1 499.2 534.4 568.6 594.2 615.2 637.8 659.7 677.4 690.9Interconnect 152.2 149.2 142.7 138.0 137.5 153.4 159.2 165.2 167.4 167.6 166.3 164.4
Visitor Roaming 36.3 34.5 28.7 17.8 18.0 16.6 14.3 15.0 15.2 15.7 16.2 16.7
Intercon. & Visitor Roam. 188.5 183.7 171.4 155.8 155.5 170.0 173.5 180.2 182.6 183.2 182.5 181.1
3rd Party 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Telematics 0.0 0.0 0.0 0.1 0.2 0.4 0.5 0.6 0.7 0.8 0.9 0.9Wholesale 5.1 5.5 7.3 5.9 2.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Equipment 12.3 13.2 13.9 16.6 16.6 16.1 16.0 16.2 16.6 16.3 16.5 16.7
Other Revenue 46.1 39.4 13.8 5.2 4.9 4.5 4.0 3.0 3.0 3.1 3.1 3.2
Total From Other 63.5 58.1 35.0 27.6 23.8 20.9 20.6 19.8 20.3 20.2 20.4 20.8
Revenue Discounts 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Revenue 667.6 650.6 666.4 682.6 713.6 759.5 788.2 815.3 840.7 863.2 880.3 892.7
Cost of Sales
Subscriber Acquisition Cost 8.0 0.3 0.7 (0.2) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1)Interconnect (113.8) (124.1) (140.8) (148.5) (150.4) (158.3) (166.2) (175.3) (180.6) (183.5) (184.7) (185.0)
Roaming (24.7) (21.9) (21.2) (23.5) (25.6) (27.4) (26.7) (27.6) (28.4) (29.1) (29.7) (30.2)
Retail Commissions (5.3) (5.9) (5.6) (5.7) (6.1) (6.4) (6.5) (6.6) (6.8) (7.0) (7.1) (7.2)
Subscriber Retention Costs (10.1) (18.8) (19.3) (22.5) (24.9) (27.6) (29.9) (31.9) (34.0) (36.4) (38.1) (39.6)
Content Cost (8.1) (7.0) (8.1) (9.2) (10.3) (11.3) (12.3) (12.8) (13.3) (13.8) (14.3) (14.7)Billing & Collection (1.0) (1.0) (1.2) (1.3) (1.4) (1.5) (1.6) (1.7) (1.7) (1.8) (1.8) (1.9)
Bad Debt (4.7) (5.8) (4.1) (4.5) (4.8) (5.1) (5.4) (5.6) (5.8) (6.0) (6.1) (6.3)
Prepaid Voucher Cost (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0)
Other Cost of Sales (11.3) 0.1 (0.9) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5)Host Network Cost 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Customer Equipment Cost (86.7) (85.7) (89.2) (82.2) (86.0) (83.8) (82.8) (82.5) (83.7) (82.8) (83.3) (84.0)
Sales Related Taxes 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Cost of Sales (257.7) (269.8) (289.7) (298.1) (310.1) (322.1) (331.8) (344.4) (354.9) (361.1) (365.8) (369.3)
Gross Margin 409.8 380.8 376.7 384.5 403.5 437.4 456.4 470.9 485.9 502.1 514.5 523.4Gross Margin % 61% 59% 57% 56% 57% 58% 58% 58% 58% 58% 58% 59%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Project Alpine 44
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16
Profit & Loss Account - Nominal € Million
Operating Expenses
Payroll & Related Costs (55.4) (51.4) (58.1) (61.6) (64.4) (66.5) (67.8) (68.9) (70.0) (71.1) (72.2) (73.4)Network Operations (76.3) (81.0) (87.5) (98.2) (110.9) (119.2) (122.8) (131.9) (135.0) (137.6) (139.8) (143.7)
Spectrum Fees & Similar (5.2) (5.2) (5.3) (5.3) (5.3) (5.3) (5.3) (5.3) (5.3) (5.3) (5.3) (5.3)IT Cost (12.0) (12.2) (12.4) (12.6) (12.8) (13.0) (13.3) (13.5) (13.7) (13.9) (14.1) (14.3)
Marketing Costs (38.5) (40.7) (41.8) (43.4) (45.5) (45.7) (45.5) (45.9) (46.6) (47.4) (48.1) (48.9)Sales & Distribution Costs (1.4) (2.4) (2.9) (2.7) (2.7) (2.7) (2.8) (2.9) (3.0) (3.0) (3.1) (3.1)
Billing & Customer Care Costs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Occupancy Costs (2.0) (2.1) (2.3) (2.4) (2.5) (2.5) (2.6) (2.6) (2.7) (2.7) (2.7) (2.8)
General Office Expenses (5.7) (3.5) (7.4) (7.8) (7.8) (7.8) (7.8) (7.9) (8.0) (8.1) (8.3) (8.4)Travel, Vehicles & Transport (2.7) (2.4) (2.9) (2.9) (2.9) (2.9) (2.9) (2.9) (2.9) (3.0) (3.0) (3.0)
Fees, Dues, Subscriptions (3.6) (3.8) (4.7) (4.7) (4.8) (4.9) (5.0) (5.1) (5.1) (5.2) (5.3) (5.4)Non-Income Taxes (2.6) (2.8) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1)
Operating Expenses (205.4) (207.6) (227.2) (243.6) (261.7) (272.6) (277.8) (288.8) (294.3) (299.3) (304.0) (310.4)
Total Expenses (463.1) (477.4) (516.9) (541.7) (571.7) (594.7) (609.6) (633.3) (649.1) (660.4) (669.8) (679.8)
EBITDA 204.5 173.2 149.5 140.9 141.8 164.8 178.6 182.0 191.6 202.7 210.5 212.9EBITDA Margin 30.6% 26.6% 22.4% 20.6% 19.9% 21.7% 22.7% 22.3% 22.8% 23.5% 23.9% 23.9%
Depreciation (114.7) (117.7) (108.4) (105.4) (95.7) (107.4) (119.0) (127.1) (114.6) (82.3) (86.0) (88.7) Amortisation (42.3) (25.9) (28.4) (30.3) (31.9) (30.4) (24.4) (24.0) (23.7) (23.4) (23.4) (23.4)
Depreciation & Amortisation (157.0) (143.6) (136.8) (135.7) (127.6) (137.8) (143.4) (151.1) (138.3) (105.7) (109.5) (112.1)
Exchange Rate Gain (Loss) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Exceptional Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBIT 47.5 29.6 12.7 5.2 14.3 27.0 35.3 31.0 53.3 97.1 101.0 100.8EBIT Margin 7.1% 4.6% 1.9% 0.8% 2.0% 3.6% 4.5% 3.8% 6.3% 11.2% 11.5% 11.3%
Interest Income 3.1 3.0 2.0 0.8 0.1 0.1 0.1 0.1 0.1 2.1 4.7 5.7Interest Expenses (30.3) (25.9) (24.3) (23.7) (22.8) (21.1) (18.4) (15.5) (12.2) (10.4) (10.4) (10.4)Financing Fees & Bank Charges (2.3) (1.7) (1.7) (1.7) (1.7) (1.7) (1.7) (1.7) (1.7) (1.7) (1.7) (1.7)
Profit (Loss) Before Tax 18.0 5.0 (11.4) (19.5) (10.2) 4.3 15.2 13.8 39.5 87.1 93.6 94.4
Income Taxes (4.9) (1.6) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Net Profit (Loss) After Tax 13.1 3.3 (11.4) (19.5) (10.2) 4.3 15.2 13.8 39.5 87.1 93.6 94.4
Dividends 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.6) (84.2) (90.7) (91.5)Retained Profit (Loss) 13.1 3.3 (11.4) (19.5) (10.2) 4.3 15.2 13.8 38.9 2.9 2.9 2.9
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Coleago Consulting
D 05 D 06 D 07 D 08 D 09 D 10 D 11 D 12 D 13 D 14 D 15 D 16
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Project Alpine 45
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16
Balance Sheet - Nominal € Million
Fixed Assets
Tangible Assets 545.9 482.8 506.8 506.4 487.3 460.0 418.4 371.6 339.4 341.7 341.2 339.3Intangible Assets 261.4 242.5 229.4 206.4 181.7 157.4 139.0 121.0 103.3 85.9 68.5 51.1
Deferred Tax Asset 18.6 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9Fixed Assets 825.8 742.2 753.2 729.7 685.9 634.3 574.3 509.6 459.7 444.5 426.7 407.3
Current Assets
Stocks 17.2 16.0 11.9 11.6 15.1 15.3 14.5 14.1 14.0 14.3 14.0 14.1Trade Debtors 103.4 99.4 102.2 104.7 109.1 104.0 108.0 111.7 115.2 118.2 120.6 122.3
Other Debtors & Assets 28.4 28.2 22.4 20.1 20.1 20.1 20.1 20.1 20.1 20.1 20.1 20.1Cash 34.9 47.6 37.0 2.0 2.0 2.0 2.0 2.0 2.6 103.0 129.8 153.0
Current Assets 183.9 191.2 173.6 138.5 146.3 141.4 144.6 148.0 151.9 255.7 284.6 309.5
Current Liabilities
Trade Creditors (84.6) (96.0) (103.6) (98.6) (104.2) (108.5) (111.3) (116.0) (119.1) (121.2) (122.9) (124.7)Capital Expenditure Creditors 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
IncomeTax Creditor (0.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Non-Income Tax Creditor 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Dividend Creditor 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.6) (84.2) (90.7) (91.5)Other Creditors & Liabilities (144.9) (136.1) (136.1) (136.1) (136.1) (136.1) (136.1) (136.1) (136.1) (136.1) (136.1) (136.1)
Short Term Finance 0.0 0.0 0.0 (18.8) (60.2) (45.1) (40.3) (30.5) 0.0 0.0 0.0 0.0Current Liabilities (229.6) (232.1) (239.7) (253.5) (300.5) (289.8) (287.7) (282.6) (255.7) (341.5) (349.6) (352.2)
Net Current Assets (45.7) (40.8) (66.1) (114.9) (154.2) (148.3) (143.1) (134.6) (103.8) (85.8) (65.0) (42.7)
Net Assets 780.1 701.4 687.1 614.7 531.7 486.0 431.2 375.0 355.9 358.8 361.7 364.6
Debt
€ Shareholder Loans 376.2 293.2 290.3 287.4 284.5 234.5 164.5 94.5 36.5 36.5 36.5 36.5US$ Shareholder Loans 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
€ Long Term Debt 350.0 350.9 350.9 300.9 230.9 230.9 230.9 230.9 230.9 230.9 230.9 230.9US$ Long Term Debt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Debt 726.2 644.1 641.2 588.3 515.4 465.4 395.4 325.4 267.4 267.4 267.4 267.4
Shareholder Funds
Share Capital Issued 836.2 836.2 836.2 836.2 836.2 836.2 836.2 836.2 836.2 836.2 836.2 836.2Profit & Loss Account (782.3) (778.9) (790.3) (809.8) (819.9) (815.6) (800.4) (786.6) (747.7) (744.9) (741.9) (739.0)
Shareholder Funds 53.9 57.3 45.9 26.4 16.3 20.6 35.8 49.6 88.5 91.3 94.3 97.2
Capital Employed 780.1 701.4 687.1 614.7 531.7 486.0 431.2 375.0 355.9 358.8 361.7 364.6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Coleago Consulting
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Value Creation Options
Coleago Consulting
S iti it l i th B C i di t th t O i iti t th l i
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Project Alpine 48
Sensitivity analysis on the Base Case indicates that One is sensitive to the classic
levers of value
• We ran a 10% upside and a 10%
downside across all key model
assumptions and examined the impact
on Enterprise Value against the Base
Case
• The identified key levers of value are:
– Drivers of market share
– Voice spend
– Voice tariffs
– Date spend
– Interconnection rates
– Network operating costs
Effect of Scenarios on Enterprise Value
-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%
Penetration Ceiling
Share of Gross AddsOne Churn
Competitor Churn
Packet Data Take-Up
3G % of Gross Adds
Voice Tariff
Data Tariff s
Voice Spend
Data, Content, VAS Spend
Interconnect Revenue Rates
3rd Party Revenue
Telematics Revenue
Wholesale Customers
Other Revenue per User
Other Revenue Margin
Service Retail Commissions
Subscriber Acquisition Cost
Subscriber Retention Cost
Staff Costs
Marketing Cost
Sales & Distribution
Interconnect & Wholesale Cost
Network Operations Cost
IT Cost
Billing & Customer Care Cost
Incremental Tangible Capex
Low Case High Case
Coleago Consulting
B h ki k l f l
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Project Alpine 49
Benchmarking key levers of value
• Detailed and comprehensive benchmarking of operational performance indicators was limited by the lack
of detailed management information from One and also by limited publicly available data for comparable
operators
• We were able to examine a number of areas but at a very high level
– Staff levels
– Leased line costs
– Capital expenditure
• A more comprehensive benchmarking study would be feasible during a more in-depth analysis with accessto management information
Coleago Consulting
The ability to create value through additional outsourcing is limited
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Project Alpine 50
The ability to create value through additional outsourcing is limited
• In February 2002 and again in May 2004 One
announced extensive measures to control costs,
notably by reducing headcount
– Distribution and customer care have been
specifically excluded
• In 2003, One outsourced the radio network
operation to Alcatel Austria
• This lead to a significant drop in headcount from
1,322 end 2003 to 857 end 2005, reducing staff
costs by € 37.3 million
• On the 1st of January 2006, One outsourced the
operation of the IT infrastructure to Siemens,
transferring 28 employees to Siemens
• One appears to have outsourced most material
elements of its operations that it believes do not
confer competitive advantage
1 , 3
2 2
9 0 0
8 5 7
8 7 0
1,136
1,670
1,9422,088
0
200
400
600
800
1,000
1,200
1,400
2003 2004 2005 2006
F T E ' 0 0
0
500
1,000
1,500
2,000
2,500
EOP FTEs ONE Group Customers per Staff EOP
Presonnel Costs
90.5
69.9
53.2 51.2
0
10
20
30
40
50
60
70
80
90
100
2003 2004 2005 2006
€ M i l l i o n
Coleago Consulting
Evaluation of Options
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Project Alpine 51
Evaluation of Options
# Description Modelling EV €
million
Incre-
mental
Value €
million
Proportion
of Base
Case
Comment
0 Base case 1,064 0 0.0% Stand alone
case
1 MobileCo
style
challenger
strategy
Prepaid SACs - €5 in '08, wholesale SACs €4.3 instead of
€28; prepaid tariffs -5% in '08, postpaid -5% in '09; 15%
wholesale tariff discount; market share +3% points from
08, +2% from 2011; additional customers are mostly
prepaid wholeale; in '09 One churn -0.5% pts,
competitors +0.5% points; marketing spend - €10 mn;
headcount - 100 FTEs in '08 and €3 million redundancycharge
1, 650 586 55.1% Demonstrated
in Germany
2 European no
roaming fees
+1.5% point share of gross adds, -5% visitor roaming
revenue
1,257 193 18.2% Depends on
group
3 Optimise
transmission
reduce transmission costs by 10% from 2008, €5 million
capex in 2008
1,141 77 7.2% Further work
required
4 Synergies Insufficient information Further work
required
5 Sell tower
assets
release €70 million of network capex in 2008, eliminating
site sharing revenue, network opex up by €3.5 million
1,064 0 0.0% no value
All Scenarios excluding double counting of effects 1,886 822 77.3%
Coleago Consulting
Option 1: Challenger strategy
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Project Alpine 52
Option 1: Challenger strategy
• MobileCo encouraged wholesale partners onto the network and launched value for money fixed mobilesubstitution tariffs plans.
• MobileCo reduced SACs and SRCs (-68% for prepaid and – 29% for postpaid) and gave customers
additional value in terms of lower tariffs. This sits well with a fixed mobile substitution scenario since itreduces the mobile premium.
• The effect on MobileCo market share during the first three months of 2006 was positive:
– Gain in market share of service revenue: 1.1% points
– Gain in market share of revenue: 0.3% points
– Gain in market share of base: 1.5% point
• Demand was highly price elastic: – Prepaid tariffs declined by 33.3% but prepaid ARPU remained constant. In terms of the Coleago
model this implies a price elasticity coefficient of -1.
– Postpaid tariffs declined by 34.7% but postpaid ARPU declined by only 8.6%. In terms of the Coleagomodel this implies a price elasticity coefficient of -0.72.
• In Austria voice tariffs are around 15% lower than in France and MOUs are around 50% higher. Thereforethe price elasticity is likely to be less pronounced, and the pull element of the Challenger strategy is likelyto be less effective.
• However, additional elements of the Challenger Strategy are likely to yield benefits in addition to morefocused sales and marketing and customer segmentation as well as reductions in the cost base and capitalexpenditure plans
Coleago Consulting
Modelling of the Challenger Strategy for One
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Project Alpine 53
Modelling of the Challenger Strategy for One
• Multi Channel Strategy: Accelerate sales through distribution partners using their brand (leverages
existing dedicated IN); share of gross adds increased 2% from 2008, all additional customers are prepaid
(postpaid base unchanged), these additions have a wholesale SAC of €4.3; wholesale partners receive a
20% discount on the prepaid tariff; resulting saving in marketing spend - €2 million.
• Reduce Cost Base and Focus Strategy: a) Instead of being all things to all men, focus on mass market
with fewer products. Cut in direct sales force, less product & development operations, less communication
spend because less product advertising. b) FTE cuts as a result of cutting fat, focus on mass market
(sharply reduced direct sales force), less product development, some functions taken on by MobileCo e.g.
major technical planning, procurement.
– The effect: Less 189 FTEs (see detail on separate worksheet) with €30k redundancy charge per FTE,50% of the impact in '08 and 50% in '09; outsource remaining customer care 171 FTEs with 7%
saving on employment costs; minus €2 million marketing spend.
• Roaming Synergy: One receives MobileCo group roaming traffic, bringing MO minutes to 61.7 million and
corresponding MT uplift.
• Reduce UMTS Investment: Reduced Network Capex - aligned with Challenger Case IIb to provide 91%
data coverage with possible penalty risk; reduce marketing spend for UMTS - €2 million. 50% slower
growth of HUI broadband take-up in 2008 and 2009, thereafter back to normal. Opex savings on slowdown of roll-out - aligned with Challenger Case IIb network opex forecast
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Coleago Consulting
Option 3: Optimisation of transmission network
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Project Alpine 55
Option 3: Optimisation of transmission network
• It may be possible to reduce leased line costs in the transmission network using WiMax.
• Due to lack of information at this stage, we cannot place a value on this with any degree of certainty.
• We have modelled this by reducing transmission costs by 10% from 2008 onwards and adding a one off €5
million of network capex in 2008.
Coleago Consulting
Option 4: Synergies with MobileCo
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Project Alpine 56
Option 4: Synergies with MobileCo
• The size of the Austrian market with a population of 8.2 million is 34% smaller than that of Bavaria (12.5
million pops) and in the medium to long term One could be run as division of MobileCo.
• The top management of MobileCo could also be the top management of One.
• Departments could be merged, for example technical operations, with One‟s operation being akin to a
regional office.
• Some functions, such as pricing and distribution, legal, HR, regulatory would remain specific to Austria.
• We have not modelled this scenario since further investigation is required.
• In the longer term the network could be merged, notably if the network moves to an all IP network. Thiscould produce further savings in the longer term.
• There may be other synergies, or example lower purchase cost of network equipment, handsets, SIMs etc.
Coleago Consulting
Option 5: Selling towers - rejected
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Project Alpine 57
p g j
• One could sell its tower assets and release some value in 2008.
• Lehman Brothers, 10 Jan 2007• We calculate a gross value of EUR 38bn for the tower assets, which are owned by mobile operators across
the core European markets. We estimate that the potential spin-off of these assets based on anEV/EBITDA multiple of 10x could realise a value of around EUR 13bn, equivalent to 5% valuation upsidefor the sector. This is below the valuation suggested for the potential demerger of the tower business of National Grid (around 12x EBITDA) and below the 20x multiple that tower businesses trade on in the US(albeit for much higher growth, larger sites and longer lease lengths). We believe there is more of avaluation than a cost savings opportunity from potential tower spin-offs in Europe. Renting back access tothe tower assets will incur an operating expense, and there are also likely to be higher commercial risks
compared to network outsourcing or sharing. However, the basic characteristics of the industry should befairly similar to those of the US, with the obvious difference that in Europe the towers are very much still owned by the operators. Hence, maximisation of tower yields is likely to be far behind the US. As a result,we argue that this should lead to some potential for yield enhancement over time. In our view, theseindustry characteristics are likely to appeal strongly to private-equity and infrastructure funds.
• MobileCo investigated the sale of its mobile tower assets but rejected the option because the price thatcould be obtained was not good enough and would have reduced MobileCo‟s market value.
• In the case of one we have modelled this scenario by releasing €70 million of network capex in 2008,
eliminating the site sharing revenue and increasing network opex by €3.5 million.
Coleago Consulting
Option 6: Upgrade path for core network
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Project Alpine 58
p pg p
• If one still runs GSM Release 99, an upgrade to 4 would be required.
– Outsource core? – Merge with MobileCo?
• Release 4 brings IMS capability and is a major step to an all IP network / NGM.
• Due to lack of information at this stage, we cannot place a value on this.
Coleago Consulting
Option 7: Outsource customer service - rejected
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Project Alpine 59
• Option rejected
– One focuses on customer service and distribution, this would a major change of strategy – Customer service appears to be a source of competitive advantage, leading to low churn
– Unlike, French, English or Spanish speaking European countries, there are no low cost German
speaking countries
Coleago Consulting
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Appendices
Coleago Consulting
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Appendices
Austrian Market Data
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Coleago Consulting
Austrian Telecom Market Value
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Project Alpine 63
• The sharp decline in fixed voice telephony revenue is largely offset by broadband and mobile. However,
the overall telecoms market value is starting to show signs of decline.
Fixed Lines & Broadband Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006
Fixed Lines '000 3,048 3,021 3,001 2,976 2,964 2,949 2,920
Broadband Connections '000 769 835 893 964 1,048 1,118 1,171Fixed Lines per Capita 37.29% 36.89% 36.58% 36.22% 36.00% 35.69% 35.23%Broadband Con. Per Capita 9.41% 10.20% 10.89% 11.73% 12.73% 13.54% 14.13%
End-User Market € Million Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006
Fixed Line Rental 365.0 357.7 345.2 336.4 337.7 341.1 324.1Fixed Call Charges 209.5 202.8 191.7 183.3 186.9 190.3 175.7Broadband 95.4 100.0 104.3 110.9 113.4 125.6 126.6Mobile Line Rental & Call Charges 730.8 760.9 744.8 776.5 771.3 774.8 756.5Total 1,400.7 1,421.5 1,386.0 1,407.1 1,409.4 1,431.9 1,382.9
Change p.a. Based on Quarters Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006
Fixed Line Rental -7.5% -4.6% -6.1%Fixed Call Charges -10.8% -6.2% -8.3%Broadband 18.9% 25.6% 21.4%Mobile Line Rental & Call Charges 5.5% 1.8% 1.6%
Total 0.6% 0.7% -0.2%
Coleago Consulting
One Consolidated Accounts – Expenses - € Million
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Project Alpine 64
Opex 31-Dec-03 31-Dec-04 31-Dec-05 31-Dec-03 31-Dec-04 31-Dec-05
Interconnect, Roaming, Leased Lines etc (158.762) (192.604) (192.848) 33.1% 37.9% 39.1%Handsets, SIMs, Etc (104.659) (107.982) (110.822) 21.8% 21.3% 22.5%Dealer Commission (13.408) (16.800) (11.514) 2.8% 3.3% 2.3%
Subtotal Mostly Cost of Sales (276.829) (317.386) (315.184) 57.6% 62.5% 64.0%Personnel (80.583) (62.228) (46.796) 16.8% 12.3% 9.5%Recruitment (0.266) (0.109) (0.168) 0.1% 0.0% 0.0%Training (2.083) (1.073) (0.988) 0.4% 0.2% 0.2%Temporary Staff (1.944) (1.091) (0.833) 0.4% 0.2% 0.2%
Subtotal Employment (84.876) (64.501) (48.785) 17.7% 12.7% 9.9%Support Network Operations (25.207) (23.604) (25.671) 5.2% 4.7% 5.2%Network Maintenance & Operation (6.344) (23.034) (23.448) 1.3% 4.5% 4.8%Energy for Network (4.183) (5.022) (8.101) 0.9% 1.0% 1.6%
Subtotal Network Operations (35.734) (51.660) (57.220) 7.4% 10.2% 11.6%
Advertising, Market Research, Promotion (40.600) (38.493) (40.303) 8.5% 7.6% 8.2%Motoring Expenses (2.478) (1.691) (1.210) 0.5% 0.3% 0.2%Travel (1.150) (0.877) (0.492) 0.2% 0.2% 0.1%Rent (5.359) (4.233) (3.900) 1.1% 0.8% 0.8%Postage & Telecoms (6.420) (5.849) (5.084) 1.3% 1.2% 1.0%Office Expenses (0.354) (0.280) (0.271) 0.1% 0.1% 0.1%Insurance (1.117) (0.931) (0.747) 0.2% 0.2% 0.2%Memberships (0.910) (1.033) (0.833) 0.2% 0.2% 0.2%Consulting Services (5.979) (5.806) (4.339) 1.2% 1.1% 0.9%Legal, Audit, etc (1.505) (1.138) (1.385) 0.3% 0.2% 0.3%
Other (9.624) (7.901) (7.068) 2.0% 1.6% 1.4%Other taxes (0.538) (0.521) (1.176) 0.1% 0.1% 0.2% Accruals (6.782) (5.277) (4.603) 1.4% 1.0% 0.9%
Subtotal Other Opex (42.216) (35.537) (31.106) 8.8% 7.0% 6.3%Total Opex (203.426) (190.191) (177.415) 42.4% 37.5% 36.0%Total Expenses (480.255) (507.577) (492.599) 100.0% 100.0% 100.0%
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Coleago Consulting
Mobilkom Austria - Key Data
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Project Alpine 66
Mobilkom Austria 2000 2001 2002 2003 2004 2005 2006
Market share (Subs) n/a n/a 44.4% 43.3% 41.0% 39.1% 38.7%
Penetration in Austria n/a n/a 83.1% 89.7% 98.0% 106.0% 107.7%Market Subscribers n/a 6,650.0 6,759.9 7,312.5 7,984.4 8,675.7 9,381.1
Mobilkom Subscribers
Contract 1,337.0 1,439.0 1,574.9 1,682.2 1,778.8 1,929.5 2,207.0Prepaid 1,468.0 1,411.0 1,426.5 1,481.0 1,494.8 1,462.7 1,423.5Total 2,805.0 2,850.0 3,001.4 3,163.2 3,273.6 3,392.2 3,630.5
Wireless Revenues € mn 1,357.2 1,441.7 1,513.7 1,598.7 1,674.7 1,714.9 1,726.6
Wireless Adjusted EBITDA € mn 406.4 509.4 535.3 576.6 600.3 616.7 608.1
EBITDA % 29.9% 35.3% 35.4% 36.1% 35.8% 36.0% 35.2%
Monthly ARPU €
Contract 60.7 n/a 59.8 59.9 59.8 57.2 52.0Prepaid 10.6 n/a 10.3 10.9 10.9 10.6 9.5
Average 35.9 34.1 35.8 36.9 37.1 36.5 34.4
Charged MOUs 104 109 119 123 124 135 156
Churn
Contract Churn Rate 28.0% 14.0% 10.2% 10.8% 11.9% 10.9% 9.9%Prepaid Churn Rate 17.0% 38.0% 24.2% 22.0% 22.8% 25.2% 26.5%
Average Churn Rate 23.0% 26.0% 17.0% 16.1% 17.0% 17.2% 16.8%
SAC € Million 161.8 106.4 65.6 59.0 71.6 72.6 63.4SRC € Million 50.2 58.0 48.7 58.6 72.1 71.5 72.8SACs % of Revenue 12% 7% 4% 4% 4% 4% 4%
SRCs % of Revenue 4% 4% 3% 4% 4% 4% 4%
Mobile Data
Data % of Airtime Revenues 8.7% 9.7% 10.2% 11.4% 12.6% 17.4% 21.8%Number of SMS million 333.6 448.1 519.9 538.9 521.6 542.8 937.3
Data Revenue € million n/a 70.5 82.9 n/a n/a n/a n/aGPRS Users '000 0 26 223 840 1,524.1 2,294.1 n/a
MMS Users '000 n/a n/a n/a 230.0 445.2 1,029.1 1,488.0
Data Cards Sold '000 n/a n/a n/a 0 0 50 140
GPRS Users % 0.0% 0.9% 7.4% 26.6% 46.6% 67.6% n/aMMS Users % 0.0% 0.0% 0.0% 7.3% 13.6% 30.3% 41.0%
Data Cards Sold % 0.0% 0.0% 0.0% 0.0% 0.0% 1.5% 3.9%
Coleago Consulting
One Main Prepaid Tariffs
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Project Alpine 67
• The lowest per minute prepaid tariff is
available with a minimum monthly
commitment of €20 with priced for €0.05per minute.
• The billing interval is 60 seconds which
means billed minutes are an estimated
27% higher than network minutes.
• Tariffs shown include 20% VAT.
One Main Prepaid Tariffs Prep. Take
One 20
cent
Prep. Take
One 5 cent
Take One
10 Prepaid
Average
Prepaid
Monthly Commitment € - 20.00 20.00 1st & 2nd Minute On Net 0.40 0.05 0.10 0.27 Minute On Net 0.20 0.05 0.10 0.15 1st & 2nd Minute to Other Mobile 0.40 0.30 0.10 0.33 Minute to Other Mobile 0.20 0.30 0.10 0.19 1st & 2nd Minute to Fixed 0.40 0.05 0.10 0.29 Minute to Fixed 0.20 0.05 0.10 0.16 SMS On Net 0.20 0.30 - 0.19 SMS to Other Mobile 0.20 0.30 0.10 0.18 MMS on Net 0.50 0.50 0.50 0.50
MMS to Other 0.50 0.50 0.50 0.50 WAP / 10 Kbyte 0.20 0.20 0.20 0.20 WAP / Mbyte 20.00 20.00 20.00 20.00 WEP / Mbyte 2.50 2.50 2.50 2.50
Weighted Average
Average Minute On Net 0.34 0.05 0.10 0.23 Average Minute Other Mobile 0.34 0.30 0.10 0.29 Average Minute Fixed 0.34 0.05 0.10 0.25 Average Minute 0.34 0.11 0.10 0.26 Average SMS 0.20 0.30 0.02 0.19 Average MMS 0.50 0.50 0.50 0.50
Coleago Consulting
One Main Postpaid Tariffs
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Project Alpine 68
• Unlimited tariff from €19 / month.
• With 4zu0 tariffs bundled to other
mobile minutes cannot be used for
calls to Drei.
• Lowest on-net per minutes prices 0
€ cents.
• Lowest SMS bundles prices 1 €
cent.
• Large bundles yield significant
unused usage, lifting the effective
per minute revenue.
• The billing interval is 60 seconds for
the first minute and 30 seconds for
the second minute which means
billed minutes are an estimated
20% higher than network minutes.
• Tariffs shown include 20% VAT.
One Main Postpaid Tariffs Post-
paid
4zu0
Post-
paid
4zu0 Pro
ONE
Plus 20
ONE
Plus 30
ONE
Plus 40
ONE
Plus 75
Ave-rage
Monthly Fee 19.00 39.00 20.00 30.00 40.00 75.00 Any Network Minute Bundle - - 75 200 350 1,000
On-Net & Fixed Minute Bundle unlimited unlimited 1,000 1,000 1,000 1,000 To Other Mobile Minute Bundle 1,100 1,100 - - - - Implied Price On Net / Fixed Min. - - 0.02 0.03 0.04 0.08 Implied Price Other Mobile Min. i 0.02 0.04 0.27 0.15 0.11 0.08 Implied Price per Av. Minute in B - - 0.02 0.03 0.03 0.04
Incudes SMS On-Net Bundle 100 100 100 100 100 100 Includes Mbyte Bundle 1 1 1 1 1 1
1000 SMS to All Networks €/Mon - - 10.00 10.00 10.00 10.00 75 SMS to All Networks €/Month - - 5.00 5.00 5.00 5.00
Minute On Net - - 0.15 0.15 0.15 0.15 Minute to Other Mobile 0.25 0.09 0.15 0.15 0.15 0.15
Minute to Fixed - - 0.15 0.15 0.15 0.15 SMS On Net 0.19 0.09 0.15 0.15 0.15 0.15 SMS to Other Mobile 0.19 0.09 0.15 0.15 0.15 0.15 MMS on Net 0.50 0.50 0.50 0.50 0.50 0.50 MMS to Other 0.50 0.50 0.50 0.50 0.50 0.50
WAP / 10 Kbyte 0.15 0.15 0.15 0.15 0.15 0.15 WAP / Mbyte 15.00 15.00 15.00 15.00 15.00 15.00 WEP / Mbyte 1.50 1.50 1.50 1.50 1.50 1.50 Video Telephony Minute - On Net 0.50 0.50 0.50 0.50 0.50 0.50 Video Telephony Minute - Austria 0.80 0.80 0.80 0.80 0.80 0.80
Video Telephony Minute - Interna 2.00 2.00 2.00 2.00 2.00 2.00
Weighted Average Rates
Average Minute On Net - - 0.02 0.02 0.02 0.02 0.01 Average Minute Other Mobile 0.25 0.09 0.10 0.08 0.07 0.07 0.15 Average Minute Fixed - - 0.02 0.02 0.02 0.02 0.01
Average SMS On-Net 0.06 0.13 0.07 0.10 0.13 0.25 0.09 Average SMS to Other Mobile 0.19 0.09 0.15 0.15 0.15 0.15 0.16 Average SMS 0.09 0.12 0.08 0.11 0.14 0.23 0.10
Coleago Consulting
One Mobile Broadband HSDPA Tariff
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Project Alpine 69
• Lowest per Mbyte price in bundle 2.5 € cents
• Includes 20% VAT
One HSDPA Data Card Starter Surfer XL Unlimit.Monthly Fee 10.00 28.00 40.00 75.00 Incl MB for WEB 100 500 1,024 10,000
Implied Price per Mbyte 0.250 0.160 0.112 0.025 Outside Bundle Mbyte WEB 0.400 0.200 0.200 0.200 Outs. Bund. per 10 kb WAP 0.200 0.200 0.200 0.200
Coleago Consulting
Drei Tariffs
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Project Alpine 70
• Drei is pricing voice and data
aggressively.
• Data pricing is extremely with an
implied price of 0.8 € cent per Mbyte for
the largest bundle.
• Introduced no-roaming fee tariff for
broadband mobile users.
• Tariffs including 20% VAT.
Postpaid 100 200 300 600 2,000
Euro / Month 5.00 10.00 15.00 25.00 35.00
Minutes, SMS, MMS, Mbytes 100 200 300 600 2,000 Implied Price per Minute 0.05 0.05 0.05 0.04 0.02 Per Minute Outside Bundle 0.15 0.15 0.15 0.15 0.15 Billing Interval Seconds 60 60 60 60 60 Unused Minutes Carry Over no no no no no
Prepaid Basic Euro 20
Minumim Monthly Spend - 20.00 Per Minute Any Network 0.20 0.10 SMS Any Network 0.20 0.10
Billing Interval Seconds 60 60 Unused Minutes Carry Over no no
Drei HSDPA Datacard S M L XXL Prepaid
Euro / Month 3.50 9.50 14.50 24.50 - Mbytes Included 30 250 500 3,000 - Implied Euro / Mbyte 0.117 0.038 0.029 0.008 - Outside Bundle Mbyte 0.400 0.300 0.100 0.100 0.80 Unused Mbyte Carry Over no no no no n/aBilling Interval kbytes 51.2 51.2 51.2 51.2 51.2
Coleago Consulting
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Appendices
International Benchmarks
Coleago Consulting
Company comparable metrics
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Project Alpine 72
• 2007 EV / EBITDA – High 7.0x, Low 5.5x
– European average pure play mobile 5.3x (heavily influenced by Vodafone)
– Mobistar 6.9x
– Bouygues 6.0x
• 2007 EV / FCF – High 11.0x, Low 9.0x
– European average pure play mobile 7.4x (heavily influenced by Vodafone)
– Mobistar 10.1x
– Bouygues 10.3x
• 2007 PE – High 12.0x, Low 10.0x
– European average pure play mobile 11.6x (heavily influenced by Vodafone)
– Mobistar 14.6x
– Bouygues 12.3x
Coleago Consulting
Recent transaction results
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Project Alpine 73
Company Date Country Buyer
mp e
Price for 100% (US$
mn)
Subs-cribers
(000)
US$/Subs-
criber
Western Wireless Jan-05 USA / Int'l Alltel 6,000 3,000 2,000Europoltan (Vodafone) Mar-03 Sweden Vodafone 2,254 1,325 1,701Libertel (Vodafone) Mar-03 Netherlands Vodafone 4,382 3,275 1,338Telecel (Vodafone) Mar-03 Portugal Vodafone 2,205 3,085 715TIM Hellas (80.87%) Apr-05 Greece Apax/Texas Pacific 1,694 2,276 744Telfort (100%) Jun-05 Netherlands KPN 1,205 2,417 499Turk Telekom (55%) Jul-05 Turkey Oger Telecom 11,909 24,000 496US Unwired Jul-05 USA Sprint Corp. 1,300 550 2,364
Meteor (100% from Alltel) Jul-05 Ireland Eircom 500 410 1,220 Amena (80%) Jul-05 Spain France Telecom 13,038 9,778 1,333Gulf Coast Wireless Aug-05 USA Sprint Corp. 288 95 3,026IWO Aug-05 USA Sprint Corp. 427 237 1,802Tele.ring (100%) Aug-05 Austria DT 1,599 968 1,652Vod Sweden (100%) Oct-05 Sweden Telenor 1,273 1,500 849O2 (100%) Oct-05 UK/Germany Telefonica 30,798 24,534 1,255Telsim Dec-05 Turkey Vodafone 4,550 9,760 466Digitel Jan-06 Venezuela Private Investor 425 1,700 250Mobitel Feb-06 Sudan MTC 2,180 1,900 1,148Xfera Jun-06 Spain Telia-Sonera 113 100 1,125
Recent Transactions
Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
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Project Alpine 74
g
Monthly ARPU € Prepaid Postpaid Average Prepaid Postpaid Average Prepaid Postpaid Average
Mobilkom Austria 10.6 57.2 36.5 9.5 52.0 34.4 -10% -9% -6%Mobilkom Croatia 13.7 53.1 19.9 10.7 47.8 16.7 -22% -10% -16%
Bouygues France 19.0 57.0 45.0 17.7 52.0 42.0 -7% -9% -7%SFR France 15.5 48.0 35.8 16.8 49.7 37.9 9% 3% 6%T-Mobile Austria 11.0 58.0 34.0 10.0 49.0 33.0 -9% -16% -3%T-Mobile Germany 9.0 38.0 23.0 7.0 35.0 20.0 -22% -8% -13%T-Mobile UK 14.0 61.0 28.0 13.0 66.0 29.0 -7% 8% 4%T-Mobile Czeck Republic 8.0 38.0 16.0 8.0 38.0 17.0 0% 0% 6%T-Mobile Hungary 9.0 47.0 20.0 9.0 38.0 18.0 0% -19% -10%T-Mobile Netherlands 11.0 63.0 37.0 12.0 59.0 37.0 9% -6% 0%T-Mobile Croatia 12.0 68.0 24.0 11.0 56.0 21.0 -8% -18% -13%T-Mobile Slovakia 5.0 32.0 15.0 5.0 32.0 16.0 0% 0% 7%T-Mobile Poland 6.0 30.0 14.0 6.0 27.0 13.0 0% -10% -7%
T-Mobile USA 21.0 44.0 41.0 17.0 44.0 40.0 -19% 0% -2%Vodafone Germany 8.9 39.3 23.8 7.4 37.8 21.7 -17% -4% -9%Vodafone Italy 25.0 75.7 29.3 22.6 70.7 26.7 -10% -7% -9%Vodafone Spain 15.3 57.4 35.6 15.1 53.5 35.1 -1% -7% -2%Vodafone UK 14.3 68.8 36.4 13.5 65.9 34.7 -6% -4% -4%Telefonica Spain 17.4 48.1 33.1 16.4 46.2 32.9 -6% -4% -1%Telefonica O2 UK 17.0 64.0 33.2 17.5 63.3 33.3 3% -1% 0%Telefonica O2 Germany 10.0 41.0 27.7 8.8 39.5 24.3 -13% -4% -13%Orange France 14.9 48.1 35.3 14.0 46.2 34.2 -6% -4% -3%Orange UK 13.4 69.4 32.4 13.5 68.7 31.5 0% -1% -3%Orange Belgium 38.0 38.7 2%
Orange Spain 10.9 40.1 25.1 9.8 41.3 25.1 -10% 3% 0%Orange Poland 7.8 26.8 15.9 7.0 25.8 14.5 -11% -4% -9%KPN E-Plus Germany 6.0 35.0 21.0 6.0 32.0 19.0 0% -9% -10%KPN Mobile Netherlands 8.0 63.0 30.0 9.0 56.0 29.0 13% -11% -3%KPN Base Belgium 15.0 61.0 24.0 14.0 60.0 24.0 -7% -2% 0%Swisscom Switzerland 14.2 67.8 47.9 12.1 59.8 41.1 -15% -12% -14%Cosmote Greece 29.7 29.9 1%
Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
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Project Alpine 75
g
Sales € Million
Mobilkom Austria 1,719 1,727 0%Mobilkom Croatia 422 475 13%
Bouygues France 4,144 4,539 10%SFR France 8,242 8,678 5%T-Mobile Austria 885 1,149 30%T-Mobile Germany 8,621 8,215 -5%T-Mobile UK 4,153 4,494 8%T-Mobile Czeck Republic 938 1,043 11%T-Mobile Hungary 1,090 1,050 -4%T-Mobile Netherlands 1,064 1,138 7%T-Mobile Croatia 512 556 9%T-Mobile Slovakia 378 429 13%T-Mobile Poland 1,672 1,830 9%
T-Mobile USA 11,887 13,628 15%Vodafone Germany 7,924 8,233 4%Vodafone Italy 8,012 8,406 5%Vodafone Spain 5,101 6,381 25%Vodafone UK 6,797 8,103 19%Telefonica Spain 8,834 9,199 4%Telefonica O2 UK 5,474 6,268 15%Telefonica O2 Germany 2,831 3,427 21%Orange France 9,774 9,882 1%Orange UK 5,650 5,874 4%Orange Belgium 1,310 1,549 18%
Orange Spain 3,271 3,353 3%Orange Poland 1,650 1,934 17%KPN E-Plus Germany 2,744 2,698 -2%KPN Mobile Netherlands 2,456 2,867 17%KPN Base Belgium 540 609 13%Swisscom Switzerland 2,692 2,557 -5%Cosmote Greece 1,517 1,631 7%
Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
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Project Alpine 76
Customers '000 Prepaid Postpaid Total Prepaid Postpaid Total Prepaid Postpaid Total
Mobilkom Austria 1,463 1,929 3,392 1,424 2,207 3,631 -3% 14% 7%Mobilkom Croatia 1,361 252 1,613 1,583 330 1,912 16% 31% 19%
Bouygues France 2,424 5,454 7,878 2,474 6,248 8,722 2% 15% 11%SFR France 6,312 10,886 17,198 6,265 11,618 17,883 -1% 7% 4%T-Mobile Austria 1,044 1,046 2,090 1,218 1,962 3,180 17% 88% 52%T-Mobile Germany 15,228 14,295 29,523 16,306 15,092 31,398 7% 6% 6%T-Mobile UK 13,719 3,439 17,158 13,190 3,715 16,905 -4% 8% -1%T-Mobile Czeck Republic 3,346 1,288 4,634 3,240 1,809 5,049 -3% 40% 9%T-Mobile Hungary 2,870 1,324 4,194 2,886 1,545 4,431 1% 17% 6%T-Mobile Netherlands 1,096 1,221 2,317 1,215 1,337 2,552 11% 10% 10%T-Mobile Croatia 1,487 416 1,903 1,603 555 2,158 8% 33% 13%T-Mobile Slovakia 1,235 787 2,022 1,236 965 2,201 0% 23% 9%T-Mobile Poland 6,698 3,503 10,201 7,697 4,531 12,228 15% 29% 20%
T-Mobile USA 3,266 18,424 21,690 3,830 21,211 25,041 17% 15% 15%Vodafone Germany 15,545 13,620 29,165 16,658 13,964 30,622 7% 3% 5%Vodafone Italy 21,855 1,823 23,678 24,108 2,068 26,176 10% 13% 11%Vodafone Spain 6,642 6,281 12,923 6,274 8,190 14,464 -6% 30% 12%Vodafone UK 10,024 6,301 16,325 10,265 6,674 16,939 2% 6% 4%Telefonica Spain 9,186 10,704 19,890 9,304 12,142 21,446 1% 13% 8%Telefonica O2 UK 10,479 5,502 15,981 11,415 6,218 17,633 9% 13% 10%Telefonica O2 Germany 4,798 4,970 9,768 5,544 5,481 11,025 16% 10% 13%Orange France 8,575 13,855 22,430 8,554 14,714 23,268 0% 6% 4%Orange UK 9,881 4,977 14,858 10,365 4,968 15,333 5% 0% 3%Orange Belgium 1,643 1,270 2,913 1,526 1,613 3,139 -7% 27% 8%
Orange Spain 5,305 4,996 10,301 5,694 5,420 11,114 7% 8% 8%Orange Poland 5,884 4,035 9,919 7,718 4,803 12,521 31% 19% 26%KPN E-Plus Germany 5,174 5,574 10,748 6,649 6,005 12,654 29% 8% 18%KPN Mobile Netherlands 4,812 3,260 8,072 4,787 3,855 8,642 -1% 18% 7%KPN Base Belgium 1,572 429 2,001 1,897 461 2,358 21% 7% 18%Swisscom Switzerland 1,641 2,640 4,281 1,827 2,805 4,632 11% 6% 8%Cosmote Greece 2,926 1,718 4,644 3,339 1,878 5,218 14% 9% 12%
Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
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Project Alpine 77
Prepaid vs. Postpaid Prepaid Postpaid Total Prepaid Postpaid Total Prepaid Postpaid Total
Mobilkom Austria 43.1% 56.9% 100.0% 39.2% 60.8% 100.0% -9% 7%Mobilkom Croatia 84.4% 15.6% 100.0% 82.8% 17.2% 100.0% -2% 10%
Bouygues France 30.8% 69.2% 100.0% 28.4% 71.6% 100.0% -8% 3%SFR France 36.7% 63.3% 100.0% 35.0% 65.0% 100.0% -5% 3%T-Mobile Austria 50.0% 50.0% 100.0% 38.3% 61.7% 100.0% -23% 23%T-Mobile Germany 51.6% 48.4% 100.0% 51.9% 48.1% 100.0% 1% -1%T-Mobile UK 80.0% 20.0% 100.0% 78.0% 22.0% 100.0% -2% 10%T-Mobile Czeck Republic 72.2% 27.8% 100.0% 64.2% 35.8% 100.0% -11% 29%T-Mobile Hungary 68.4% 31.6% 100.0% 65.1% 34.9% 100.0% -5% 10%T-Mobile Netherlands 47.3% 52.7% 100.0% 47.6% 52.4% 100.0% 1% -1%T-Mobile Croatia 78.1% 21.9% 100.0% 74.3% 25.7% 100.0% -5% 18%T-Mobile Slovakia 61.1% 38.9% 100.0% 56.2% 43.8% 100.0% -8% 13%T-Mobile Poland 65.7% 34.3% 100.0% 62.9% 37.1% 100.0% -4% 8%
T-Mobile USA 15.1% 84.9% 100.0% 15.3% 84.7% 100.0% 2% 0%Vodafone Germany 53.3% 46.7% 100.0% 54.4% 45.6% 100.0% 2% -2%Vodafone Italy 92.3% 7.7% 100.0% 92.1% 7.9% 100.0% 0% 3%Vodafone Spain 51.4% 48.6% 100.0% 43.4% 56.6% 100.0% -16% 17%Vodafone UK 61.4% 38.6% 100.0% 60.6% 39.4% 100.0% -1% 2%Telefonica Spain 46.2% 53.8% 100.0% 43.4% 56.6% 100.0% -6% 5%Telefonica O2 UK 65.6% 34.4% 100.0% 64.7% 35.3% 100.0% -1% 2%Telefonica O2 Germany 49.1% 50.9% 100.0% 50.3% 49.7% 100.0% 2% -2%Orange France 38.2% 61.8% 100.0% 36.8% 63.2% 100.0% -4% 2%Orange UK 66.5% 33.5% 100.0% 67.6% 32.4% 100.0% 2% -3%Orange Belgium 56.4% 43.6% 100.0% 48.6% 51.4% 100.0% -14% 18%
Orange Spain 51.5% 48.5% 100.0% 51.2% 48.8% 100.0% -1% 1%Orange Poland 59.3% 40.7% 100.0% 61.6% 38.4% 100.0% 4% -6%KPN E-Plus Germany 48.1% 51.9% 100.0% 52.5% 47.5% 100.0% 9% -8%KPN Mobile Netherlands 59.6% 40.4% 100.0% 55.4% 44.6% 100.0% -7% 10%KPN Base Belgium 78.6% 21.4% 100.0% 80.4% 19.6% 100.0% 2% -9%Swisscom Switzerland 38.3% 61.7% 100.0% 39.4% 60.6% 100.0% 3% -2%Cosmote Greece 63.0% 37.0% 100.0% 64.0% 36.0% 100.0% 2% -3%
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Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
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Project Alpine 79
Annual Churn Prepaid Postpaid Average Prepaid Postpaid Average Prepaid Postpaid Average
Mobilkom Austria 25.2% 10.9% 17.2% 26.5% 9.9% 16.8% 5% -9% -2%Mobilkom Croatia
Bouygues France 13.9% 14.2% 2%SFR France 11.9%T-Mobile Austria 14.5% 19.6% 14.5% 20.6% 0% 5%T-Mobile Germany 13.5% 16.6% 13.5% 17.6% 0% 6%T-Mobile UK 29.8% 31.5% 22.5% 33.1% -24% 5%T-Mobile Czeck Republic 7.0% 12.4% 8.1% 15.6% 16% 25%T-Mobile Hungary 10.3% 16.6% 9.2% 16.6% -11% 0%T-Mobile Netherlands 23.4% 31.5% 16.6% 28.9% -29% -8%T-Mobile Croatia 11.4% 12.4% 12.4% 12.4% 9% 0%T-Mobile Slovakia 14.5% 20.6% 11.4% 17.6% -22% -14%T-Mobile Poland 13.5% 25.3% 7.0% 25.3% -48% 0%
T-Mobile USA 24.4% 29.8% 23.4% 29.8% -4% 0%Vodafone Germany 23.9% 14.6% 19.4% 26.8% 15.1% 21.4% 12% 4% 10%Vodafone Italy 18.2% 16.1% 18.1% 20.8% 15.0% 20.4% 14% -7% 13%Vodafone Spain 27.8% 13.7% 21.1% 37.8% 13.8% 25.4% 36% 1% 20%Vodafone UK 38.1% 22.6% 32.0% 43.8% 19.5% 34.3% 15% -14% 7%Telefonica Spain 16.6%Telefonica O2 UK 27.0%Telefonica O2 Germany 14.0% 14.5% 4%Orange France 32.0% 11.6% 19.4% 12.2% 21.2% 5% 9%Orange UK 32.2% 23.8% 26.9% 24.0% 28.8% 1% 7%Orange Belgium
Orange Spain 26.0% 21.5% 23.8% 24.9% 25.5% 16% 7%Orange PolandKPN E-Plus Germany 30.0% 16.0% 23.0% 27.0% 22.0% 25.0% -10% 38% 9%KPN Mobile Netherlands 43.0% 15.0% 32.0% 35.0% 19.0% 29.0% -19% 27% -9%KPN Base Belgium 20.0% 16.0% 17.0% 20.0% 19.0% 20.0% 0% 19% 18%Swisscom Switzerland 8.6% 8.9% 8.2% 10.2% -5% 15%Cosmote Greece 19.6% 19.6% 0%
Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
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Project Alpine 80
Capex € Million
Mobilkom Austria 174 133 -24%Mobilkom Croatia 71 55 -23%
Bouygues France 584 613 5%SFR France 840 T-Mobile Austria 138 155 12%T-Mobile Germany 457 582 27%T-Mobile UK 459 496 8%T-Mobile Czeck Republic 101 129 28%T-Mobile Hungary 181 140 -23%T-Mobile Netherlands 168 165 -2%T-Mobile Croatia 71 54 -24%T-Mobile Slovakia 75 88 17%T-Mobile Poland 228 224 -2%
T-Mobile USA 3,886 5,297 36%Vodafone Germany 1,102 973 -12%Vodafone Italy 1,145 991 -13%Vodafone Spain 758 833 10%Vodafone UK 852 901 6%Telefonica Spain 728 750 3%Telefonica O2 UK 905 761 -16%Telefonica O2 Germany 772 1,139 48%Orange France 1,026 1,011 -1%Orange UK 887 481 -46%Orange Belgium 207 Orange Spain 549 554 1%Orange Poland 319 281 -12%KPN E-Plus Germany 401 486 21%KPN Mobile Netherlands 159 218 37%KPN Base Belgium 117 123 5%Swisscom Switzerland 216 207 -4%Cosmote Greece 110 139 26%
Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
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Project Alpine 81
Capex / Sales
Mobilkom Austria 10.1% 7.7% -24%Mobilkom Croatia 16.9% 11.6% -31%Bouygues France 14.1% 13.5% -4%SFR France 10.2% n/aT-Mobile Austria 15.6% 13.5% -13%T-Mobile Germany 5.3% 7.1% 34%T-Mobile UK 11.1% 11.0% 0%T-Mobile Czeck Republic 10.8% 12.4% 15%T-Mobile Hungary 16.6% 13.3% -20%T-Mobile Netherlands 15.8% 14.5% -8%T-Mobile Croatia 13.9% 9.7% -30%T-Mobile Slovakia 19.8% 20.5% 3%T-Mobile Poland 13.6% 12.2% -10%T-Mobile USA 32.7% 38.9% 19%Vodafone Germany 13.9% 11.8% -15%Vodafone Italy 14.3% 11.8% -18%Vodafone Spain 14.9% 13.1% -12%Vodafone UK 12.5% 11.1% -11%Telefonica Spain 8.2% 8.2% -1%Telefonica O2 UK 16.5% 12.1% -26%Telefonica O2 Germany 27.3% 33.2% 22%Orange France 10.5% 10.2% -3%Orange UK 15.7% 8.2% -48%Orange Belgium 15.8% n/aOrange Spain 16.8% 16.5% -2%
Orange Poland 19.3% 14.5% -25%KPN E-Plus Germany 14.6% 18.0% 23%KPN Mobile Netherlands 6.5% 7.6% 17%KPN Base Belgium 21.7% 20.2% -7%Swisscom Switzerland 8.0% 8.1% 1%Cosmote Greece 7.2% 8.5% 18%
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Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
EBITDA M i
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Project Alpine 83
EBITDA Margin
Mobilkom Austria 35.7% 35.2% -1%Mobilkom Croatia 40.0% 40.1% 0%Bouygues France 29.7% 27.6% -7%SFR France 38.3% 41.2% 8%T-Mobile Austria 25.4% 28.8% 13%T-Mobile Germany 41.8% 40.2% -4%T-Mobile UK 31.4% 21.8% -31%T-Mobile Czeck Republic 43.7% 43.1% -1%T-Mobile Hungary 39.6% 40.2% 2%T-Mobile Netherlands 16.5% 16.6% 1%T-Mobile Croatia 46.5% 42.6% -8%T-Mobile Slovakia 42.1% 40.3% -4%T-Mobile Poland 39.4% 31.1% -21%T-Mobile USA 27.7% 27.5% -1%
Vodafone Germany 45.4% 44.4% -2%Vodafone Italy 51.6% 49.0% -5%Vodafone Spain 35.7% 34.4% -4%Vodafone UK 32.3% 30.7% -5%Telefonica Spain 46.7% 44.9% -4%Telefonica O2 UK 29.1% 33.8% 16%Telefonica O2 Germany 21.9% 20.0% -8%Orange France 39.8% 38.8% -3%Orange UK 30.0% 27.2% -9%Orange BelgiumOrange Spain 31.0% 27.8% -10%
Orange PolandKPN E-Plus Germany 23.8% 31.3% 31%KPN Mobile Netherlands 37.4% 36.6% -2%KPN Base Belgium 37.2% 42.4% 14%Swisscom Switzerland 44.4% 44.8% 1%Cosmote Greece 42.1% 43.1% 2%
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Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
%
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Project Alpine 85
Non-Voice ARPU % Prepaid Postpaid Average Prepaid Postpaid Average Prepaid Postpaid Average
Mobilkom Austria 17.4% 21.8% 25%Mobilkom Croatia
Bouygues France 16.4%SFR France 12.9%T-Mobile Austria 11.0% 13.0% 18%T-Mobile Germany 17.0% 18.0% 6%T-Mobile UK 18.0% 18.0% 0%T-Mobile Czeck Republic 21.0% 21.0% 0%T-Mobile Hungary 14.0% 14.0% 0%T-Mobile Netherlands 14.0% 17.0% 21%T-Mobile Croatia 15.0% 15.0% 0%T-Mobile Slovakia 15.0% 15.0% 0%T-Mobile Poland 15.0% 16.0% 7%
T-Mobile USA 8.0% 11.0% 38%Vodafone Germany 19.8% 21.9% 11%Vodafone Italy 16.2% 17.9% 11%Vodafone Spain 14.4% 15.2% 5%Vodafone UK 19.8% 21.8% 10%Telefonica Spain 13.3% 13.8% 4%Telefonica O2 UK 21.0% 30.9% 47%Telefonica O2 Germany 20.0% 23.7% 19%Orange France 13.9% 15.3% 10%Orange UK 19.4% 20.3% 5%Orange Belgium 14.8% 15.3% 3%
Orange Spain 13.6% 12.1% -11%Orange Poland 19.6% 20.7% 5%KPN E-Plus Germany 15.0% 17.0% 13%KPN Mobile Netherlands 14.0% 16.0% 14%KPN Base Belgium 14.0% 14.0% 0%Swisscom Switzerland 14.5% 16.6% 14%Cosmote Greece 12.0% 11.1% -8%
Coleago Consulting
Mobile Operator Benchmarks
2005 2006 Change 2005-2006
Non Messaging Data Prepaid Postpaid Average Prepaid Postpaid Average Prepaid Postpaid Average
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Non-Messaging Data Prepaid Postpaid Average Prepaid Postpaid Average Prepaid Postpaid Average
Mobilkom AustriaMobilkom Croatia
Bouygues FranceSFR FranceT-Mobile AustriaT-Mobile GermanyT-Mobile UKT-Mobile Czeck RepublicT-Mobile HungaryT-Mobile NetherlandsT-Mobile CroatiaT-Mobile SlovakiaT-Mobile PolandT-Mobile USAVodafone Germany 4.7% 7.2% 54%Vodafone Italy 3.4% 4.5% 33%Vodafone Spain 4.6% 6.0% 29%Vodafone UK 4.9% 6.1% 25%Telefonica Spain 5.2% 6.1% 17%Telefonica O2 UK 2.6% 4.0% 55%Telefonica O2 Germany 4.3% 5.3% 21%Orange FranceOrange UKOrange BelgiumOrange SpainOrange PolandKPN E-Plus GermanyKPN Mobile NetherlandsKPN Base BelgiumSwisscom Switzerland 7.7%Cosmote Greece