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6 Lessons Learned from the Mobile Industry Commonwealth Digital Broadcasting Switchover Forum 2015 Rostan Schwab, IFC Senior Investment Officer

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6 Lessons Learned from the Mobile Industry

Commonwealth Digital Broadcasting Switchover Forum 2015

Rostan Schwab, IFC Senior Investment Officer

IFC Overview

• IFC is the member of the World Bank Group focused on the private sector

• Founded in 1956 with 184 member countries

• Largest multilateral source of loan/equity financing in Emerging Markets

• Over $97 Billion Invested Since 1956

• AAA-rated by S&P and Moody’s

• Equity, quasi-equity, loans, risk management and local currency products

• Takes market risk with no sovereign guarantees

• Promoter of environmental, social, and corporate governance standards

• Resources and know-how of a global development bank with the flexibility of a merchant

bank

• Holds equity in over 756 companies worldwide across the following sectors:

- Agriculture - Financial Markets

- Manufacturing Service - Health & Education

- Infrastructure - Oil, Gas and Mining

- Telecoms, Media & Technology

2

4

Greenfield Projects to Corporate Expansions

IFC Financing in TMT

Telecoms Media Technology

Satellite Infrastructure Data Centers

Submarine Cable Applications e/m Payment Systems

Wireless/Cellular Content Information Security

Fiber Backbones Incubators IT Services

Broadband Hardware/Devices

Managed Services

TowersMVNO's

Cross Cutting Venture Investments

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Lesson 1: New Technology / Increased Access

• The introduction of mobile technology has led to a dramatic increase in access to voice

services. In 2014, total mobile subscriptions amounted to 6.8 billion, a 93% global

penetration.

Source: Ericsson Mobility Report, 2014

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Lesson 2: New Technology / New Growth

• The introduction of mobile technology has led to a significant growth in the global

telecom market, and a switch from developed to emerging markets.

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Lesson 3: A Change in Players Dynamics 1/2

• The introduction of mobile technology has led to a change in players dynamics, with

larger players increasingly dominating the space.

Source: Delta Partners, 2011

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Lesson 3: A change in Players Dynamics 1/2

• Today, a select club of global titans has emerged together with a strong group of multi-

region emerging challengers. And some of the “big dormants” are waking up.

Source: Delta Partners, 2011

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Lesson 4: New Technology / New Devices and New Uses

• Mobile technology was initially designed for voice services on a cellphone. It is now

increasing used for data and with multiple devices (smartphones, tablets, PCs).

Source: Ericsson Mobility Report, 2014

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Lesson 5: Ever-Evolving Business Models

• The introduction of mobile technology has led to the emergence of ever evolving

business models, seeking to better adapt to the promises of the technology / customer

demands.

State-Owned

Telecom Operator

Private Mobile

Network Operator

(MNO)

Mobile Virtual

Network Operator

(MVNO)

Independent

Tower Company

Mobile Outsourced

Network Operator

(MONO)

E-COMMERCE

MOBILE

ADVERTISING

INTERNET OF

THINGS

FINANCIAL

SERVICES

CONTENT

SOCIAL NETWORKS

OTT

COMMUNICATIONS

VIRTUALIZATION

MNO

Fi. Services

Primary Infrastructure play

Primary digital play Etc…

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Lesson 6: the Need for a Rigorous Approach to Investment

• Despite the overall success of mobile telephony, a rigorous approach to investment was

and still is today required. Below are the main topics of an IFC due diligence.

• Adequate technology vs Market

conditions (ex GSM vs CDMA) ?

• Track record of the sponsor in managing

/ investing in similar ventures ?

• Overall macro-political and regulatory

environment / Timing ?

• Business model ?

Existence of successful precedents ?

Greenfield / Proof of concept /

Established operations ?

Replicability ?

• Size of the market opportunity

• Competition

• Credibility / Consistency of Business Plan

• Quality of Management Team

• Environment & Social due diligence

• Others