Company Presentation

SVP Advisors

October 2011

Contents

Experience in Regulation 2

Experience in Economic Modelling 3

About Us 1

Experience in Business Strategy 4

Experience in Corporate Finance 5

3

SVP Advisors is an international management

consulting firm for the TMT sector1, with expertise in

regulation, economic modelling, business strategy

and corporate finance

Established by seasoned professionals in 2006, we

have earned over time a solid reputation within the

TMT sector thanks to our quantitative and practical

approach to problem solving

Our work combines various disciplines such as

economics, econometrics, finance, accounting,

marketing and engineering

Who we are

1 Telecommunications, Media and Technology

4

Areas of Expertise

REGULATION

CORPORATE FINANCE

ECONOMIC MODELLING

BUSINESS STRATEGY

Regulatory Strategy

Competition & Market

Analysis

Policy Setting

Transaction Support

& Placement

Due Diligence

Valuation &

Benchmarking

Commercial Strategy

Business Planning

Business & Product

Development

Costing Systems

Pricing Models

Margin & Profitability

Analysis

5

Approach

Partnership

We believe in the potential of effective teams

(designed as networks of value, to best serve the interests of our Clients)

Focus

Our services are built around our core competencies and experience

(so that we can have a tangible, positive impact on the results of our Clients)

Independence

We provide impartial and sound advice

(so that our Clients can take fully informed decisions)

Fact-driven

We use clear and measurable evidence to reach relevant conclusions

(using sound arguments and with the support of quantitative analytical tools)

Practicality

We conceive solutions for the real world

(taking into full account constraints and specific circumstances)

6

International Footprint

SVP Advisors Assignments (15 countries)

Previous Team Experience (26 countries)

Miami

Madrid

(HQ)

Bangalore

Associate office

SVP Advisors Offices

7

We work with some of the world’s largest and well-

respected institutions and operators, and we are

often invited to present at international conferences and

workshops addressing the latest topics in the TMT sector

Our international client base includes:

Telecom Operators such as Telecom Italia, Telefónica

and Turkcell

Media and Internet Companies such as Babelgum

and BetonLive

Telecom Regulators such as AGCOM, CMT, CITC, EETT

and NITA

Int’l Organizations such as the European Commission

and the IADB

Financial Institutions such as Santander and Citibank

Clients

Clients distribution, by type

8

People

Dimitri Kallinis

Partner

Business Strategy Expert

Julio Villalobos

Partner

Technology & Regulatory Expert

Over 10 years experience in

technology and regulation in the

TMT sector

Extensive international track-

record of modelling, regulatory

and strategy consulting projects

for fixed and mobile operators in

several Countries worldwide.

Former Team Leader of

Technology Strategy at Telefónica

Areas of expertise: fixed and

mobile networks, regulatory

strategy, regulatory accounting

and techno-economic modelling

Over 10 years experience in

strategy advice and financing in

the TMT sector

Telecoms financing expert,

participated in over 10 large M&A

transactions and in over 20

syndicated loan transactions over

the last few years. He has actively

participated in innovative ventures

through an investment fund

Areas of expertise: new

technology and media ventures,

start-ups, innovation, financial

transactions

Francisco Velázquez

Partner

New Ventures & Financing Expert

Over 10 years experience in

strategy advice and operations in

the TMT sector

Has lead several international

strategy consulting assignments.

Former Head of Residential Unit at

On Telecoms, a leading Greek

3Play Operator, responsible for

Content, Pricing, Sales Strategy

and MarkComms

Areas of expertise: broadband,

MVNO, IPTV, business planning,

commercial strategy and market

analysis

Contents

Experience in Regulation 2

Experience in Economic Modelling 3

About Us 1

Experience in Business Strategy 4

Experience in Corporate Finance 5

10

Price Squeeze Analysis of Narrowband and Broadband Offers

Results & Benefits

Analysis of bundles fixed-line offers comprising

narrowband and broadband services, using an ad hoc

developed prize squeeze tool which calculated costs and

revenue of a reasonably efficient operator

The tool takes into account a vast array of wholesale

services including narrowband origination and

termination, broadband bitstream access and LLU

Additionally to the analysis, we assisted the Regulator in

drafting the methodology on margin squeeze

Allows the Regulator to assess whether an alternative

operator can market its services profitably based on the

wholesale inputs provided by the incumbent operator

Project Description

Note: chart has been altered for confidentiality purposes

Margins of a typical double-play offer considering economies of scale and technology choice

Client

NITA (Telecoms Regulator) - Denmark

Key words: competition analysis, margin squeeze

11

Audit of the Regulatory Cost Accounts of a Mobile Operator

Results & Benefits

Audit of the cost accounts for the year 2007 of a mobile

operator, prepared using the fully distributed cost

methodology under both the HCA and CCA1 standards.

The audit included the following main tasks:

Review of the methodology employed in the

preparation of the cost accounts

Reconciliation of financial and other relevant data

Review of the re-valuation of assets at current costs

Review of the full cost allocation process

We identified necessary and/or suggested amendments

to the operator’s costing systems and quantified the

impact of such changes on the cost of regulated services

Project Description

Schematic Overview of the Mobile Operator’s Regulatory Cost Accounting System

Client

AGCOM (Telecoms Regulator) - Italy

Allocation Stage I

Allocation

Stage III

Services Cost

Centres Allocation

Stage II

Activities Inputs

Cost Accounts Activities Cost

Centres

AGCOM Results Table 1

Internal Management

System

FAR

Traffic Volumes

Revenues

AGCOM Results Table 2

Input Allocation Model Stages Output

LEGEND

1 HCA: Historic Cost Accounting, CCA: Current Cost Accounting

Key words: regulatory accounting, cost models

12

0%

20%

40%

60%

80%

100%

CDMA 450 Copper wire GSM 800 UMTS 100 WiMAX ADSL

% P

opula

tio

n c

overa

ge

Market efficiency frontier Market sustainability frontier Current coverage

Fixed telephony Mobile telephony Broadband

Assessment of the Telecommunications Policy in a Latam Country

Results & Benefits

Strategic review of the Mexican telecoms sector aimed at

identifying areas where public intervention would be

required. We established market boundaries for each of

the services considered and assessed, among others:

Benefits and costs of several alternate technologies

Role of communications in low income & rural areas

The review took into consideration the current market

situation and international best practices on technology

developments and market structure/competition

Provided recommendations on several policy areas

including regulation, social service, internet access

programs, spectrum management and education

Project Description

Market efficiency gaps with different technologies

Client

COFETEL (Telecoms Regulator) - Mexico

Key words: telecoms policy, market analysis

13

Establishment of Regulated Wholesale Tariffs

Results & Benefits

Development of a Discount Cash Flow Model to support

the establishment of regulated wholesale tariffs for

broadband services based on a retail-minus methodology

The DCF model was based on the typical operations of a

fixed operator while also taking into account the specific

market and operator conditions

Further support was provided to the client in carrying out

a public consultation to ensure adequate reflection of the

views of the different stakeholders and market realities

The results of the model were used by the Regulator in

establishing the tariffs to be applied to the incumbent

operator for its broadband services

Project Description

Client

EETT (Telecoms Regulator) - Greece

Retail-Minus Calculation Model

Key words: tariffs setting, broadband, retail-minus

Contents

Experience in Regulation 2

Experience in Economic Modelling 3

About Us 1

Experience in Business Strategy 4

Experience in Corporate Finance 5

15

Bottom-Up LRIC Model for determining the cost of Mobile Services

Results & Benefits

Development of a bottom-up LRIC model to calculate the

cost of a range of mobile services including wholesale

access, origination and call termination

Based on the pure-LRIC approach, the model takes into

consideration several factors such as QoS, demand

seasonality, technology choice (2G, 3G and LTE) and the

different use of available spectrum (refarming)

The model's several applications include the calculation

of the impact of network sharing on costs

The model built is highly flexible as it can provide results

for any type of existing or hypothetical/efficient

operator, depending on the inputs provided

Project Description

Calculation flow of the Bottom-up LRIC Model Client

CMT (Telecoms Regulator) - Spain

Key words: mobile termination, bottom-up models, LRIC

16

Design of a Costing System

Results & Benefits

Design of a costing system aimed at fulfilling our client's

regulatory and operational needs

Through a step-by-step process, the system allocated

the company's actual costs to wholesale and retail

services (voice, SMS, data, etc...)

In addition to actual financial information, additional

inputs such as routing factors were used in allocating

network, retail and common costs to cost centres and

subsequently to services

The system allowed the operator to prove full compliance

with regulatory obligations and to carry out a profitability

analysis of its wholesale and retail tariffs

Project Description

General overview of the Costing System Client

Turkcell (Mobile Operator) - Turkey

FIXED ASSET REGISTER

P&L STATEMENT

BALANCE SHEET

COST ALLOCATION PROCESS

REVENUE ALLOCATION PROCESS(DIRECT TO SERVICES)

ACCOUNTING SEPARATION

REPORTS-Internal

reporting- Regulatory

reporting

SPLIT BY CHANNEL SPLIT BY SEGMENT

SPLIT BY TARIFF

STAGE 6.3 - CORP

General corporate costs

STAGE 3.2 – RET

Retail activities

Primary activities (customer related)

Support activities

COGS

Taxes & Fees

STAGE 4.2 – RET

Retail functions

Sales - Acquisition

Collections

Front-End

Rev Stim-Retention

Product Management

Back Off ice

COGS

Taxes & Fees

STAGE 2.3 – REST

Corporate Costs by Department

Allocation to business units by type of costs

Allocation of common and joint costs to activities and network elements

Allocation of support activities to functional

blocks

Allocation to internal services

Allocation to services with transfer charges and

routing factors

STAGE 2.1 – NW

NW business unit

Capital related costs by Asset

Operating network costs

Costs by Department

Other External Costs

STAGE 5.1 – NW

Internal NW services

Statements at

wholesale markets

Origination

Termination

Roaming

Other

Internal retail services

STAGE 6.2 – RET

Retail services

Statements at

retail markets

Voice & Video calls

Messaging

Data

Roaming IN

Roaming OUT

Other

STAGE 1

Stage 1.1 FAR

Fixed Assets

Stage 1.2 P&L

Organization costs

Personnel

G&A

COGS

Interconnection

Roaming

Handsets

SIM cards

Other expenses

Sales & Marketing

Other costs of sales (e.g. NW operating costs)

External expenses

Power

Taxes

Non-attributable to telecoms activity

Stage 1.3 BS

Working capital

STAGE 2.2 – RET

Retail business unit

Costs by Department

Retail costs by nature

Non-op. Assets

COGS

Taxes & Fees

STAGE 3.1 –NW

NW elements

Primary plant

Support equipment

STAGE 4.1 – NW

NW Functional Blocks

Radio Link

Backhaul

Core

Backbone

IX

DB & Platforms

STAGE 6.1 - NW

WH services

Statements WH

product 3rd parties

Voice & Video calls

Messaging

Data

Roaming IN

Roaming OUT

Other

STAGE 5.2 – RET

Internal retail services

Service-specif ic

Service Group-specif ic

Acquisition-driven

Customer-driven

Revenue-driven

Churn-driven

General & other

TC – TRANSFER CHARGES

RF – ROUTING FACTORS

RF

DW TRAFFIC DATA

OPERATINGVARIABLES

NW ROUTING

FACTORS

DW SUBSCRIBER

DATA

Key words: cost accounting, profitability analysis

17

Calculation of the net cost of Universal Broadband Service

Results & Benefits

Development of a model to determine the net cost

associated to the provision of broadband to every

European household under several technological

scenarios, including wireline and wireless technologies

The calculation of the net cost was carried out at the

Member State level and took into account several factors

including the (possible) availability of spectrum from the

Digital Dividend or a mandated minimum bandwidth in

the broadband service provision

The outcome of the model was instrumental in the

impact assessment of EU Policy options for the revision

of the Universal Service provision

Project Description

Average net cost per capita of universal broadband service, by EU Member State

Client

EU Commission - EU

Key words: cost models, universal service, broadband

0

5

10

15

20

25

30

35

40

45

50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 275

Y N

ET

CO

ST

PE

R C

AP

ITA

EU

R

EU27 MEMBER STATES

18

DEMAND

NETWORK DIMENSIONING

OUTPUTSMAPPING

TO

DRIVERS

MAPPING

TO

ACTIVITIES

COSTING

AND

ALLOCATIONResources by activity

By resourceBy cost categoryBy activityBy service

By serviceBy geo-type

List of servicesList of geo-typesList of ext. Factors

List of service groupsList of driversList of activities

List of resourcesList of Routes

List of cost types

EXTERNAL FACTORS

By geo-type

PROCESSES

By service

1. INPUTS 3. DIMENSIONING 5. OUTPUTS2. ALLOCATION MATRIXES

4. COSTING (ALLOCATION TO

SERVICES)

UNIT COSTS

By resource

GEO-MODEL

By route

CHARTS

LRIC analysisGraphsKPIs

SCENARIO ANALYSIS

Sensitivity

Bottom-Up Model for determining the Cost of Postal Services

Results & Benefits

Development of a bottom-up LRIC model covering all

services and activities of Cyprus Post in the postal value

chain: collection, sorting, transport and delivery

The model took into the account cost efficiencies

achieved in certain processes, variations in costs due to

different service parameters and geographical specifics

The model provided the following outputs: unitary cost

by service, cost by activity, cost by category, cost by

resource employed

The model was instrumental in the assessment of the

pricing policy of Cyprus Post, including compliance with

regulatory obligations and competition principles

Project Description

Calculation flow of the Bottom-up costing model Client

OCECPR (Telecoms Regulator) - Cyprus

Key words: postal services, bottom-up models, LRIC

Contents

Experience in Regulation 2

Experience in Economic Modelling 3

About Us 1

Experience in Business Strategy 4

Experience in Corporate Finance 5

20

Assessment of MVNO Business Models

Results & Benefits

Development of a tool for determining the economics of

different MVNO business models to be potentially hosted

in our client´s network

For each MVNO business model, the tool provided

financial accounts (P&L, CF statement) and KPIs

(subscribers, ARPU, MoU, etc.) over a 5-year period

The modelling tasks were preceded by the definition of

the different MVNO business models, in terms of MVNO

type, business proposition and target market segment

The tool was instrumental in assessing the viability of

different MVNO business models under different market

penetration scenarios and cost structures

Project Description

Schematic Overview of the MVNO tool Client

Private Client (Mobile Operator)– Eastern Europe

Key words: MVNO, business modelling, wholesale strategy

21

Study of Mobile Infrastructure Sharing Options

Results & Benefits

Review of mobile infrastructure sharing in EU25

countries covering different types of agreements ranging

from site sharing to national roaming, taking into

account regulatory and commercial aspects, and

identifying the best practices in different countries

This study was followed by the development of a

business case for calculating the financial gains/losses at

the wholesale and retail level associated with the nation-

wide provision of 2G national roaming

The results of this study were used by our client in

shaping the most appropriate strategy and commercial

approach with regards to infrastructure sharing

Project Description

Overview of alternate options of mobile infrastructure sharing

Client

Private Client (Mobile Operator)– Eastern Europe

Increasing depth of network sharing

MNOs share the same physical compound but install

separate masts and mobile equipment (e.g. antennas)

Site Sharing

MNOs share the same mast or other structures (e.g.

rooftops) Masts Sharing

MNOs share all access network equipment, but use

their own software and assigned frequencies RAN Sharing

A host MNO provides mobile services to the users of

the roaming MNO in areas not covered by its network

National Roaming

Site sharing

Masts sharing

Radio Access

Network sharing

Nationalroaming

Key words: infrastructure sharing, national roaming

22

Development of a business plan for an international

betting company for a “real” live interactive football

betting application, provided over the Internet

As part of our work, we assessed and provided inputs on

the business model selected for the new application

Following that, we identified and analysed national

markets showing greater potential for the application

based on the broadband penetration, average spend per

user and features of multiservice platforms

Year 1 Year 2 Year 3

Addressable market (Units) 000 4,000.0 4,800.0 5,600.0

Active users 000 86.4 178.6 282.2

Penetration % 2.2% 3.7% 5.0%

Net ARPU (mth) € 4.7 4.6 4.4

Total net revenue € 000 4,915.0 7,282.6 12,048.6

Total recurring costs € 000 1,161.7 2,228.1 3,635.1

Total one-off costs € 000 798.1 1,040.0 1,388.4

Gross Margin € 000 2,955.2 4,014.5 7,025.0

Gross Margin % % 60% 55% 58%

Business Plan for an Internet Content Provider

Results & Benefits

The model produced a full range of financials based on

different scenarios, and was instrumental in the

definition of our client’s markets entry strategy

Project Description

Overview of the key economics of the Business Plan Client

Private Client (Internet Company) - UK

Key words: interactive services, business planning

Note: figures have been altered for confidentiality purposes

23

100%

60%

25%

15%

7%

100%

60%

15%10%

5%

100%

60%

8%5%

3%

Hypothesis Licensing / upfront payment

Phase I-II Phase III Market Authorization

BEST

BASE

WORST

Business Plan for a Biotech Company

Results & Benefits

Development of a business plan reflecting the new

enhanced operations of our client, a biotech company

generating medicinal products through an innovative

Internet-based technology platform

In addition to opex and capex, the model calculated

revenue and costs for each single product in the

company’s pipeline based on the development lifecycle

and discounting the probabilities of success in each

clinical phase up to market authorization

The business plan was instrumental in successful capital

increase round made by our Client for financing its future

planned operations

Project Description

Illustrative graph of % of products achieving milestones under different scenarios

Client

Private Client (Biotech Company) - Switzerland

Key words: biotech, business planning

Contents

Experience in Regulation 2

Experience in Economic Modelling 3

About Us 1

Experience in Business Strategy 4

Experience in Corporate Finance 5

25

Due Diligence of a Mobile Operator

Results & Benefits

Technical and market due diligence of a mobile operator

undergoing a round of re-financing through a $600

million syndicated loan

We reviewed the operator’s business plan, focussing on

revenue, opex and capex forecasts, using market

information and int’l benchmarks as appropriate

The assignment included on-site visits to perform

management interviews, on the ground market analysis

as well as network and operational facilities’ monitoring

We produced a due diligence report and a revised

business case based on our recommended values for

some sensible hypotheses and parameters

Project Description

Illustrative example of the analysis carried out during the Due Diligence process

Client

Inter-American Development Bank - Colombia

Argentina

Colombia

Chile

Ecuador

Peru

Venezuela

Brazil

Mexico

Argentina

Colombia

Chile

Ecuador

Peru

Brazil

Mexico

Company A

Company B

0%

10%

20%

30%

40%

50%

60%

0% 20% 40% 60% 80%

EBIT

DA m

arg

in

market share

Key words: due diligence, market analysis, business planning

26

Content

Target market

Niche / Specialist

Professionally-generated

User-generated

Mainstream / Hit

Transaction Support in the Sale of an Online Video Company

Results & Benefits

SVP Advisors acted as financial advisor in the sale of an

integrated web and mobile video platform providing

innovative, professionally produced and curated content

to a global audience

From preparation to execution, we supported the

company throughout the transaction process

Our activities included drafting due diligence material,

identifying and contacting potential buyers, and setting

up meetings and negotiations rounds

Based on an assessment of the company’s market value

and potential, we defined a clear sale strategy and

provided a narrowed-down list of potential investors

Project Description

Competition Map – US Online Video Market Client

Private Client (Media Company) - USA

Note: Size of the bubbles indicates Monthly Unique Users in the US

Key words: transaction support, online video

For further information please contact:

SVP Advisors Ltd.

Almagro, 15 Madrid, Spain

Rafael Gonzalez

Senior Manager

Rafael.Gonzalez@svpadvisors.com