Supported an incumbent operator for an industry-leading transaction by developing a business plan for the creation of an active wholesale mobile network

The problem

• Polkomtel (Plus), a Polish incumbent operator, was operating its mobile network through a separate, wholly-owned, entity (NetCo), and sought to maximise the value of its assets and achieve certain financial objectives
• Analysys Mason was commissioned to assist the operator by developing a business plan for NetCo that would attract investors on this industry-first transaction of an operator spinning-off its entire mobile network

The solution

• We worked closely to produce ten-year market demand forecasts for the three main products (co-location, active wholesale mobile services and backhaul connectivity) through network modelling and geo-analysis of site locations
• We developed a pricing catalogue for each product type (passive, active, backhaul) and specification (e.g., 500Mbit/s, 1Gbit/s and 2Gbit/s backhaul)
  • this was to account for underlying product costs, investment horizon and investor margins, and to reflect different marketing and discount strategies
• We created a business plan for NetCo, covering analysis of commercial (revenue, costs, opex, capex) and financial (depreciation) key performance indicators
  
  • it also assessed multiple demand and supply scenarios and remained flexible throughout the process
• After the finalisation of the business plan, we provided vendor commercial and technical due diligence services throughout the successful conclusion of the sales process

Figure: Illustrative sample slides from our assessment (anonymised)

The result

• The created business plan was used throughout the process as the platform for internal discussions to define NetCo’s scope, commercial strategy and portfolio of services. Ultimately, it formed the commercial basis for the successful sale of the company for EUR1.6 billion, marking the first large-scale disinvestment of an operator’s network to a third-party service provider.