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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 charles.uhrig@

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Financing for Telcos:

A Caribbean Perspective

July 15, 2008

  • Introductions :10
  • Overview of Caribbean Telco Market Environment :10
  • Panel Discussion :40
  • Audience Q&A :10

Charles Uhrig

(727) 567-5020 charles.uhrig@

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


John Cole

(770) 618-3213

Michael Prior

(978) 619-1301


Analysys Mason

Telecom Consultant



Howard Armstrong

(876) 999-8775


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


overview of caribbean telecom environment
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
share price performance of caribbean latam telcos



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.

telecom penetration a growth opportunity
Telecom Penetration: A Growth Opportunity

Wireless Penetration

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

Source: International Telecommunications Union

telecom penetration a growth opportunity8
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

telecom penetration a growth opportunity9
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

other factors driving interest in caribbean telcos
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
caribbean telecom transactions
Caribbean Telecom Transactions

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

public company valuations
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

factors influencing valuation
Factors Influencing Valuation
  • Public company valuations provide investors and acquirers with a benchmark utilized when evaluating investment opportunities.
  • Reasons for valuation variations include:
debt and equity investor considerations
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