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
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TMT Global Expertise
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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