Spectrum Allocation, Infrastructure Sharing and Industry Consolidation. Hong Kong, January 2014

The Data TsunamiSpectrum Allocation, Infrastructure Sharing and Industry Consolidation

Mobile data traffic is doubling every two years

© Copyright Coleago 2014

TMT Finance & Investment - Asia 2014 - Hong Kong 1

Source: Ericsson (November 2013)

Smartphones and LTE drive traffic growth




Asia Pacific subscriptions (m)

64%


85%

Asia-Pacific traffic will grow 11x by 2019



Operators need to act now

Increase revenues?

� Data tariffs that reflect bandwidth and volume needs

� New services

Increase capacity and bandwidth to respond to demand

� Re-farm spectrum

� Add small cells

� Invest in transmission

� More spectrum

� Introduce LTE and LTE-A

Revenues will not keep pace with costs

� Engage Managed Service providers

� Share network infrastructure

� Merge or acquire



$

Time

Costs

Active RAN sharing on the increase?

� Technology/licence-driven

� Spectrum sharing is in the minority

� Few regulators set policy

� A few cases of PPP wholesale networks



Source: Coleago

Will 2014 show an uptick in M&A?

� Chart only shows intra-country M&A excluding Fixed/Cable-Fixed/Cable M&A

� Increasing number of MNO-MNO M&A

� Increasing number of MNO-Fixed/Cable acquisitions



Source: Coleago

Regulators have a difficult balancing act



ClarityStability

How Coleago helps operators

Spectrum

� Spectrum strategy, valuation and auction support

� More than 50 projects worldwide, on every continent

M&A

� Strategy and business planning

� DD

� Implementation planning/execution

� More than 20 projects to date

Network sharing

� From feasibility analysis through to implementation

� Projects completed in 8 markets

We've written the book!



Key messages



Data traffic will increase dramatically

$

Time

Costs

EBITDA will be squeezed and ROI will fall unless operators act now

Sharing and consolidation will change the face of the industry

Coleago helps operators respond to these challenges

Thank you

Recent relevant reports

� Ericsson Mobility Report, Nov. 2013, www.ericsson.com/mobility-report

� Ericsson Mobility Report Appendix, Northeast Asia, Nov. 2013



Chris Buist

+43 664 352 1068chris.buist @coleago.comwww.coleago.com

DirectorColeago Consulting Ltd