Finanzierung digitaler Infrastruktur - Mario Wilhelm NetCologne Gesellschaft für Telekommunikation mbH

Finanzierung digitaler Infrastruktur   Mario Wilhelm
                                       NetCologne Gesellschaft für
                                       Telekommunikation mbH

                                       Wolfgang Behler
                                       KfW IPEX-Bank GmbH

Referent                               Gastgeber

November 21st, 2018

Planning, Financing & Monetizing Fibre Investments

Mario Wilhelm, CFO NetCologne

Who we are.
 One of the most successful regional
 telecommunication providers in Germany.

  We have our own fibre network,
     constantly increasing
  We build the futureproof digital
     infrastructure for Cologne & region
  We are a digital pioneer                          Founded     - October 31st, 1994
                                                  Shareholder    - GEW Köln AG (100%)
  We care for the people and                        Location    - Cologne
     citizenship in our region                     Employees     - 898
                                                     Turnover    - 266 Mio. Euro (2017) of which 2/3 B2C, 1/3 B2B
  We are real experts – 25 years of       Earnings before tax   - 7,2 Mio. Euro (2017)
     expertise                                   Subsidiaries    - NetAachen (84%; full service telecoms)
                                                                 - NetCologne IT Services (100%; IT services)
Seite 2 | 11.09.18
                                                                 - NetRegio (100%; infrastructure)
  SEITE 2      15.11.2018

Our footprint and subscribers.
We make our region digital.
And we grow steadily.
                                                  Düsseldorf

 We have 26.500 km of fibre
  deployed.
                                                       Köln
 We have ~30-40 Mio. Euro
  Capex per annum
 1,2 Mio. Homes Passed own              Aachen
                                                               Bonn
  fibre based (FttC, FttB, HFC), total
  HP ~ 2,5 Mio.
 Subscribers YE 17: 371k Internet
  & Telephony B2C, 235k TV

SEITE 3   15.11.2018

B2C increase on own fibre.

       B2C subscriber base:
DTAG copper vs own fibre infrastructure

           2014                        2017
                                              32%
     45%            55%
                                 68%

           DTAG
           Own infrastructure (FttB, FttC, HFC)

 4

Multi Access Technologies.

    18 Mbit/s   100 Mbit/s   500 Mbit/s   500 Mbit/s

5

Planning fixed line fibre investments.

Business Case:
 Key question: upgrade area with
  existing customer base or „new
  build“ (defensive or attacking move)
 Planning win rate with B2C & B2B
  services
 Capex planning: primarily based on
  civil works (Tiefbau) and
  transmission components
 „Devil in the detail“: permission from
  building owners, construction
  permissions → time to market

6

Planning fixed line fibre investments.

Key Performance Indicators:
  ARPU, penetration rates, upselling
   rates to higher bandwidth packages
  Capex per meter
  Right marketing & sales mix:
      ability to leverage existing
       brand
      targeted sales activities given
       defined fibre footprint

7

And evaluating & financing them!

Valuation:
 Discounted Cash Flow method, 20
  year investment horizon
 Value is in delta of Buildout vs Non-
  Buildout Case. Key: expected Non-
  Buildout customer churn rate
 Main decision criteria: DCF, payback
  (relative to other projects)

8

And evaluating & financing them!

Financing:
 Infrastructure vehicle for passive
  infrastructure assets (ducts & fibre)
 Principally, depreciation funding Capex
  given the existing asset base
 Additional long term financing in line
  with project´s generally long term
  payback structure
 Cooperation ventures: Shared passive
  & active infrastructure deployment, eg
  in combination with a utility company
  → reducing Capex spend, but at the
  cost of margin reduction
9

Q&A

10

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Abendveranstaltung und Verleihung der Awards
 „CFO des Jahres“ und „Treasury des Jahres“