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Financing for Telcos: A Caribbean Perspective. July 15, 2008. Agenda. Introductions :10 Overview of Caribbean Telco Market Environment :10 Panel Discussion :40 Audience Q&A :10. Introductions. Charles Uhrig (727) 567-5020 [email protected]

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Financing for Telcos:

A Caribbean Perspective

July 15, 2008

Agenda l.jpg

  • Introductions :10

  • Overview of Caribbean Telco Market Environment :10

  • Panel Discussion :40

  • Audience Q&A :10

Introductions l.jpg

Charles Uhrig

(727) 567-5020 [email protected]

Full-service investment bank offering equity capital raising, M&A, and strategic advisory services.

Lender to communications, agricultural, and rural energy businesses with approximately $60 billion in total assets.

Offers wireless, local telephone, and international long distance voice and data services in the Caribbean and U.S.

Raymond James

Telecom Investment Banking


Lender / Communications Division

Atlantic Tele-Network

Telco Perspective

Justin Cadman

(727) 567-5102

[email protected]

John Cole

(770) 618-3213

[email protected]

Michael Prior

(978) 619-1301

m[email protected]

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Analysys Mason

Telecom Consultant



Howard Armstrong

(876) 999-8775

[email protected]

Offers strategic advice, technical design, operations support, and market intelligence to telecoms, IT, and media and in over 90 countries worldwide.

A leading North American financial institution serving customers in 50 countries worldwide and offering personal, commercial, corporate and investment banking services.

Tim Lorimer

(416) 866-6755

[email protected]

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Overview of Caribbean Telecom Environment

  • Competitive landscape varies widely by country

    • Dependent in part on state of telecom liberalization & government

    • Few multinational players (including Digicel and C&W)

    • Numerous other participants

  • Significant growth opportunity fueled by wireless and Internet/data

    • Attracting increased attention from investors

    • Better growth profile than North America/Western Europe due to lower penetration rates

  • Unique set of considerations for operators and investors alike

    • Political/regulatory outlook

    • Consolidation opportunities

    • Opportunities from continuing market liberalization/privatization

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Share Price Performance of Caribbean/LatAm Telcos

Wireless +77%

Wireline +69%

C&W +59%

S&P +3%

Shares of publicly traded Caribbean / Latin American companies have outperformed the U.S. stock market.


(1) Wireless index includes AMX, NIHD, TMB, TSU, and VIV.

(2) Wireline index includes ATNI, AXTEL, BRP, GVT, MXT, TMX, TNE, and TSP.

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Telecom Penetration: A Growth Opportunity

Wireless Penetration

Wireless penetration has significant upside opportunity across much of the Caribbean/Latin America.

Source: International Telecommunications Union

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Telecom Penetration: A Growth Opportunity

Wireline Penetration

While wireless growth should eclipse wireline growth in the region, there should continue to be modest, steady wireline growth.

Source: International Telecommunications Union

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Telecom Penetration: A Growth Opportunity

Internet Users

Many Caribbean / Latin American countries have very low Internet usage, reflecting low penetration of data services. There is significant opportunity for broadband/data growth.

Source: International Telecommunications Union

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Other Factors Driving Interest in Caribbean Telcos

  • Countries are closely aligned to larger economies in North American and Europe

  • Legal and political systems are generally advanced and parallel North American / Western European systems

  • Underlying economies and populations are growing steadily

  • Market liberalization/privatization creating new opportunities

  • Valuations generally still reasonable

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Caribbean Telecom Transactions

The Caribbean telecom industry is a hotbed of investment and M&A activity.

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Public Company Valuations

Enterprise Value / 2008E EBITDA

Carib./LatAm Wireless

Carib./LatAm Wireline

  • Valuations vary depending on country and company specific factors

  • Caribbean & Latin American average 2008E Enterprise Value / EBITDA:

    • Wireless: 5.3x

    • Wireline: 3.3x

  • Valuations are still reasonable, and represent a discount to corresponding U.S. multiples despite a more robust growth profile.

Wireless Average

Wireline Average

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Factors Influencing Valuation

  • Public company valuations provide investors and acquirers with a benchmark utilized when evaluating investment opportunities.

  • Reasons for valuation variations include:

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Debt and Equity Investor Considerations

  • Debt investors like stable cash flows and a certain regulatory/political environment.

    • Capacity for Caribbean telcos to take on debt depends on these factors

  • Equity investors are also very interested in growth opportunities.

Leverage ─ Debt / 2008E EBITDA

Wireless Average

Wireline Average

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Charles Uhrig 727-567-5020Justin Cadman 727-567-5102