Coleago Consulting - Spectrum Services Summary

Spectrum Services
Coleago’s service in relation to spectrum auctions, refarming
and spectrum licence renewal
Stefan Zehle, CEO
Coleago Consulting
January 2014

© copyright Coleago 2014 1
Coleago's Spectrum Services
Stefan Zehle, MBA
Tel: +44 7974 356 258
stefan.zehle@coleago.com
CEO, Coleago Consulting Ltd
Contact
Graham Friend, MA, M.Phil. (Cantab), ACA
Tel: +41 79 855 1354
graham.friend@coleago.com
Managing Director, Coleago Consulting Ltd
Further information: www.coleago.com
Scott McKenzie, BE, MBA
Tel: +44 7825 294 576
scott.mckenzie@coleago.com
Director, Coleago Consulting Ltd

Content
1 Introduction
2 Spectrum Consultation
3 Spectrum Valuation
4 Auction Strategy and Readiness
5 Live Auction Support
6 Coleago’s Project Team and Relevant Experience
7 About Coleago Consulting

© copyright Coleago 2014
Spectrum refarming, spectrum licence renewal and
spectrum auctions
Introduction
3
1

Spectrum issues are moving centre stage
Spectrum is moving centre stage
Spectrum was always a key resource for mobile operators and a
factor that explained differences in coverage, notably the ownership
of lower band spectrum. Spectrum is now moving centre stage again
driven by a number of factors:
 New Mobile Spectrum: Spectrum is being freed for mobile
services, notably in 2.5 / 2.6 GHz and the digital dividend
spectrum in 700 / 800 MHz.
 Mobile Broadband: The development in technology notably
HSPA and LTE enabled the development of a mobile broadband
market which drives spectrum needs.
 Refarming: In most countries GSM licences were not technology
neutral, i.e. the licence only allowed operators to run GSM. GSM
is now nearing the end of its life cycle. HSPA and LTE are being
introduced in former GSM bands.
 Licence Expiry: In many countries the 900 and 1800 MHz GSM
licences are near to expiry and some 2.1 GHz licences are a few
years away from expiry.
 Complex Spectrum Auctions: The primary manner of allocating
spectrum is no longer beauty contests but auctions. Some of
these are highly complex auctions, including combinatorial
auctions.
Developing a spectrum strategy is not the only challenge
The spectrum related evolution is challenging in its own right, but
other factors contribute to the complexity of the business decisions
with regards to the acquisition, renewal and redeployment of
spectrum:
 Mature Markets: Many mobile markets are no longer
experiencing revenue growth as mobile broadband revenues
simply offset declining voice revenues.
 Large Investment Decisions: The acquisition of new spectrum
and subsequent technology deployment results in significant
capex. Corporate governance demands high standards of due
diligence with regard to investment appraisal of this magnitude.
 Demand Uncertainty: There is uncertainty with regards to
iPhone-like device penetration, tablet penetration, traffic volumes.
 Technology Uncertainty: The evolution of the technology eco-
system, e.g. the number of bands and technologies that will be
incorporated in devices, LTE band aggregation path, future
spectrum availability, software defined radio, and other technology
factors is uncertain.
 Operational Complexity: The multiplication of bands and
technologies within these bands, as well as rolling off GSM results
in operational challenges.
 Traffic Offload: The degree to which traffic offload is possible via
WiFi or femto cells may mitigate mobile network demand.
4
Introduction
Events require
operators to make
complex decisions
which require
expertise to ensure
that shareholder
value is not
destroyed
Licence Expiry and
Renewal
Spectrum Reframing
Auctions for New
Spectrum
Major Investment
Appraisal Decisions
Spectrum Strategy
Decisions
Technology Strategy
Decisions
Regulatory Consultation
& Lobbying
Spectrum Valuation
Auction Strategy &
Auction Support
Increase
Shareholder
Value
Events
DecisionsRequired
RequiredExpertise

Coleago’s services in relation to spectrum auctions, licence renewal and refarming
What is the issue at hand?
Coleago worked with operators who faced
different issues, namely spectrum auctions,
licence renewal, and refarming. In some
cases these three issues are addressed by
the regulator as part of a single process. In
each case spectrum strategy and valuations
are likely to be key components in
successfully addressing the issue at hand.
Allocation of New Spectrum
Obtaining new spectrum often consists of
bidding for it in an auction. For operators
facing a spectrum auction, Coleago offers a
well defined service set at the different
stages in the run up to the spectrum auction
as set out in the table on the right.
Licence Renewal
Coleago can help you to negotiate with the
regulator to retain spectrum without going to
auction, e.g. by arguing the case for an
Administered Incentive Pricing (AIP)
process looking at the Optimum Deprival
Value (ODV) and Best Alternative Use
(BAU) based renewal fees. Good
regulatory advocacy can save millions of
dollars in auction spend.
Refarming
Coleago can help to argue your case with
regards to refarming. Often this is
associated with renewal or redistribution of
lower band spectrum. Coleago AIP pricing
methodologies and spectrum auction
valuation techniques are an important part
of this service.
5
Introduction
Coleago’s spectrum
related services are
structured into four
blocks, supporting
you when facing
licence renewal,
refarming or
allocation of new
spectrum by means
of an auction or an
administered
process
Coleago’s Spectrum Auction Related Services
Spectrum
Strategy &
Consultation
The objective is to influence the process of allocating spectrum in a
favourable manner consistent with your spectrum needs. Questions
that need to be answered include:
 What spectrum blocks do we need in which bands?
 What auction format should be argued for?
 Should there be restrictions, e.g. caps?
 In the case of renewal, can an auction be avoided?
 In the case of Administered Incentive Pricing, what should the
spectrum renewal fee be; should we argue for ODV, BAU or
benchmarking?
 What arguments can be presented consistent with regulatory policy
objectives, economic rationale and international best practice?
Spectrum
Valuation
The objective of any investment decision is to increase or at least
maintain shareholder value. Prior to bidding in an auction you need to
answer the question how much is each block or combinations of
blocks worth to us? This allows you to set bid limits. Coleago’s
structured spectrum valuation process would give your board
confidence in making the investment decision associated with
acquiring the spectrum and subsequent technology roll-out.
Auction
Strategy
Depending on the auction format there may be dominant bid strategies
or ways to avoid negative outcomes in cases where there is
aggregation risk. This can be explored at theoretical level, through
simulations and mock auctions.
Live Auction
Support
In theory a bidder enters the auction well prepared and the auction
itself is a mechanical exercise. However, as the auction unfolds there
will invariably be some learning which needs to be processed at the
end of each day in order to be prepared for the next day’s bidding.

How to approach a spectrum auction
Key Questions in relation to a Spectrum Auction
In respect of a spectrum auction an operator has to find an answer to
four fundamental questions:
 How much spectrum do we need in different bands? The
question relates to an assessment of spectrum need in the
context of the growth in demand, notably mobile broadband. This
needs to take account of the overall strategy, for example traffic
offload through WiFi or femto cells.
 How much is each block worth, i.e. what is the most we
should bid for it? This relates to valuing each spectrum block
in order to set the bid limit for the auction. This is quite separate
from auction strategy. Clearly, if there is not a bid limit, the auction
will be simple because a bidder would simply pay whatever it
takes to win the spectrum. However, such an approach is unlikely
to add shareholder value and does not conform to standards of
corporate governance and rigorous investment appraisal.
 How do we obtain the spectrum as cheaply as possible? This
relates to auction strategy. In any auction, the bid limits should
be set before the start of auction. The role of bid strategy is to
ensure the spectrum is obtained for less than the bid limit.
Depending on the auction format there may be an opportunity to
influence the outcome and avoid negative effects such as
aggregation risk (e.g. be stranded with unwanted blocks). This is
addressed by examining the auction rules and developing a bid
strategy which will be tested through simulations and mock
auctions.
 How do we conduct the auction? This relates to executing the
auction strategy during the auction. You enter the auction well
prepared. However, as the auction unfolds there will invariably be
some learning which must be processed at the end of each day so
that you are well prepared for the next day’s bidding. You must
ensure compliance with bid protocols and procedures and have
an effective daily communications and review process.
6
Introduction
Valuing the
spectrum is the most
critical and time
consuming task in a
spectrum auction
process.
Spectrum valuation
is quite different from
auction strategy.
How many spectrum
blocks do we need in
each band?
How much is each
block worth to us (set
the bid limit)?
How can we obtain the
optimum combination
of blocks as cheaply
as possible?
Spectrum Need
Technology assessment in
relation to mobile
broadband demand and
corporate strategy
Spectrum Valuation
Valuation of each block
and combinations of blocks
Auction Strategy
Examine auction rules, set
bid limits, develop bid
strategy, explore through
simulations and mock
auctions
Question in Relation
to Auction
Requirement to Answer
the Question
How do we conduct a
successful auction?
Auction Execution
Implement the bid strategy
incorporating the use of the
auction support tools

Valuing spectrum requires answers to difficult questions
Project Challenges
The valuation of
spectrum will raise
many questions and
the valuation
methodology and
model will need to
capture and reflect
the answers to these
key questions
Market landscape
 Will the mobile broadband landscape be more substitutional / complementary to fixed networks?
 What will be the mobile broadband penetration for handsets, tablets and other devices in 10 years time?
 How will customers value higher headline speeds, better average speeds, consistency of speed over the
coverage area, more extensive geographic coverage, better in-building coverage?
Data usage
 How much will customers use in the future and how much will they be prepared to pay?
 What services are driving forecast growth, what is likely usage by device type?
Technical
 What are likely uplifts from LTE advanced / MiMO, spectrum efficiency factors in terms of bits per Hertz?
 Which band combination will be available in devices, what bands can be aggregated and when?
 What are the limits to sit densification and small cells?
 What are the incremental costs of equipment at different bands and when will it be available?
Spectrum
 How much spectrum is needed and what is the optimal combination of frequencies and block sizes?
 How does Interference impact on specific blocks and how does it effect valuation?
 What spectrum will become available in future?
Data traffic profile
 Will the data traffic profiles continue to follow voice profiles e.g. top X% sites carrying Y% of busy hour traffic?
 Will this depend on the mix of complementary versus substitutional traffic?
Impact of network
congestion
 Will network congestion lead to higher retail prices and/or lower SACs?
 What implications does possible network congestion have on MNO’s MVNO strategies?
Relationship with
fixed broadband
 Can the fixed network be part of a mitigating strategy if spectrum is not acquired?
 Will mobile broadband and fixed broadband complement or compete?
 How much traffic can be offloaded and can you serve other mobile operators?
Mitigating
strategies
 The role of Wi-Fi and network consolidation with another operator
 Manage demand – QoS pricing, enforce caps, service restrictions
 Acquire spectrum at a later date through spectrum trading

Coleago’s expertise can help you to negotiate low spectrum renewal fees
Licence Renewal and Refarming: Developing the right
arguments
Operators faced with the expiry of their licence and refarming usually
go through a negotiation process. It is rare for regulators to re-
auction spectrum. Therefore the development of suitable arguments
for low spectrum licence renewal fees is the most important aspect.
Based on our experience, Coleago will develop a coherent set of
arguments for an appropriate form of renewal and technology
neutrality at the lowest possible cost.
Administered Incentive Pricing (AIP)
Most regulators are obliged to agree a methodology for renewal that
extracts a return for society and ensures that economic benefit is
generated. Recognising that a simple re-auction may not be
appropriate, many regulators have opted for negotiated renewal
prices using different forms of AIP such as benchmarking, Optimum
Deprival Value (ODV) or Best Alternative Use (BAU).
Optimum Deprival Value (ODV)
Deprival value is a cost-based valuation approach that answers the
question “what is the least cost system or bundle of assets needed to
provide customers with the existing level and quality of services,
should a certain existing asset be removed?”
This approach can be applied to valuing spectrum rights by
addressing the following: “If an operator was deprived of incremental
spectrum rights, what incremental costs would be incurred to
replicate the existing level and quantity of services using the
remaining spectrum rights?” These costs are “avoided” by owning the
incremental spectrum rights and so, in this context, represent the
value of those rights. That is, the rights holder should be prepared to
pay up to the value of the incremental costs to avoid being deprived
of its spectrum rights, so long as the incremental costs are less than
the present value of the free cash flows generated from the spectrum
services.
Typically ODV is based on a calculation of the deprival value of an
“average” operator. As a consequence, the value per MHz (applied to
all operators) should lie between the highest and lowest private
values of all the individual operators. ODV therefore stimulates
efficient use of the resource by incentivising spectrum hoarders to
release it or put it to more productive use.
ODV (also known as the ‘Smith-NERA’ or ‘least cost alternative’
method) is the basis of the UK’s Administered Incentive Pricing (AIP).
Best Alternative Use (BAU)
In contrast to ODV, BAU considers the value placed on an additional
amount of spectrum by alternative user(s). This could, in theory,
include:
 An alternative technological use
 A new mobile entrant
 Competitors
ODV vs. BAU
ODV represents an upper bound on what spectrum holders will be
willing to pay. ODV has the potential to encourage reallocation to the
most efficient mobile operator, but conservative (lower) valuations
should be set, given the risk of substantial negative consequences if
ODV is overestimated.
The highest of these BAU values determines the corresponding fee.
The calculation of the BAU requires modelling of the revenues and
costs of alternate uses.
Coleago’s experience in ODV and BAU modelling and
argumentation can produce substantially lower renewal fees
Coleago can help you to produce the most favourable (low) spectrum
valuations based on ODV and BAU and, depending on the situation
present well reasoned arguments for the suitability of the preferred
methodology.
8
Introduction
Operators who face
licence expiry are
usually better off
with a negotiated
settlement rather
than a re-auction.
This also appears to
be the approach
preferred by most
regulators.

Why choose Coleago Consulting?
Differentiator Benefits for You
Introduction
The main benefits of
using Coleago are:
More accurate
valuations
Greater confidence
in the valuation
range
Reduced project risk
Lower demands on
management time
Greater consensus
between group and
the operating
company
 Quickly able to establish credibility and respect
with senior management at the op co and group
 Confidence to challenge established thinking
 Project delivery is fast, efficient and accurate
 Able to resist “going native” and remain objective
 Able to identify the key challenges quickly
 We already know how to tackle the challenges
so more time can be spent on quality analysis
 We can build consensus between operating
companies and Group around the spectrum
business plan
 Time is not wasted working out how to do things
 The use of existing tools reduces the need for
modelling and so reduces risk
 More time can be spent on strategy and
developing and agreeing assumptions
 The operating company takes ownership
 The operating company becomes self reliant
 Project team learn from Coleago
 Better relationship between group and the op co
Specialists in
Spectrum
Valuation
Optimised
Methodology
and Tools
Mature,
Experienced
Consultants
Commitment to
Knowledge
Transfer
 More accurate valuation range
 Greater confidence in the valuation range
 Lower project risk
 Less time required from senior management
 Better decisions
 Management time not wasted arguing over
assumptions between the group and op co
 Greater likelihood that the business plan will be
successfully implemented
 Projects can be delivered at lower cost
 Projects are lower risk
 Greater confidence in the valuation range
 Lower expenditure on future consulting fees
 Group better able to influence future decisions
 The human capital of the business expands
Project Benefits
9

Coleago can help you to present the right arguments to
regulators at the consultation stage. Good lobbying and well
argued submissions can save large amounts of capital
expenditure.
Spectrum Consultation
10
2

Typical spectrum allocation consultation process
11
In the run-up to a
spectrum allocation
there is usually
consultation with
stakeholders.
Depending on the
jurisdiction this
ranges from informal
meetings to a well
structured multi-step
process in order to
ensure that all views
are heard.
Consultation
responses are not
only received from
operators but also
from other interested
parties, including
associations of users
and vendors.
Stage Activity Operator’s Actions
Policy
Formulation
The Government formulates policy for the allocation of spectrum.
Government departments or ministries involved may include
Telecoms, Development, Finance, Competition Commission, etc
Lobby politicians
PR campaign to influence the debate
Notice of
Consultation
At this stage the process moves to the telecoms regulatory authority
who issues a notice of consultation. This includes a description of the
consultation process and timetable. There may also be a workshop to
obtain inputs from stakeholders in an informal manner.
Lobby politicians
Prepare workshop materials
Meetings with regulatory agency
1st Round
Consultation
The regulator issues a formal consultation document which contains a
list of decisions that need to be made in relation to the spectrum
allocation, a discussion and analysis of the issues, perhaps a
preliminary conclusion (“we are minded to....”), and an invitation to
respond to questions relating to each decision that needs to made.
Analyse consultation document
Commission independent reports that
support own view point
Prepare & submit response to consultation
Cross
Submission
The regulator would normally publish the submissions received from
different stakeholders and invite cross submissions. This gives
stakeholders the opportunity to comment on points made by other
stakeholders.
Analyse other submissions quantitatively
(how many agree with x) and qualitatively
Prepare and file cross submission document
2nd Round
Consultation
The regulator issues a second consultation document which draws on
the submission received and presents its conclusion and a proposal
ahead of the final determination. If an auction is proposed this would
include a description of the auction format and rules.
Analyse consultation document
Submit response to consultation
Final
Determination
The regulator publishes the final determination, including the process,
detailed procedures and rules. The regulator answers questions for
clarification of the process, procedures and rules.
Analyse determination document
Questions for clarification
Explore legal recourse if necessary

Specific auction issues should also be addressed during the consultation stage
Understanding the objectives of the auctioneer
A response to a spectrum consultation must take account of the legal
framework and policy objectives:
 Revenue generation: The auctioneer will quite often have this as
an objective. From the bidders’ perspective an auction designed
to generate economic efficiency and maximise revenue will
minimise the profits from participation for the bidders who value
the spectrum most highly.
 Promoting participation and enhancing competition: For an
auction to be competitive there needs to be excess demand for
spectrum relative to the available supply. Greater participation can
contribute towards a more efficient outcome and may lead to
greater revenues. Amongst the measures used by auctioneers to
increase participation are:
– Setting low reserve prices
– Selecting an auction mechanism that allows for the possibility
of a weak bidder securing spectrum in the presence of a
stronger bidder
– Providing bidder credits (used in some US auctions)
– Specifying differential activity rules which favour new entrants
– Setting aside spectrum for new entrants (e.g. in Canada)
– Careful spectrum packaging and the use of spectrum caps
Spectrum packaging
If there are significant differences and generic lots are used then bid
strategy becomes more complicated as a second auction (known as
an assignment round) is required to allocate the specific blocks. The
packaging of blocks into lots may reduce aggregation risk and favour
strong bidders.
Spectrum caps and set-aside
Spectrum caps and set-aside are tools used by auctioneers to
promote competition or create a “level playing field”. Depending on
how these are applied it can increases prices or depress prices.
Sequential versus simultaneous auctions
A bidder participating in a sequential series of auctions must guess
what the future prices in later auctions will be when determining its
bid in the current auction. Sequential auctions for spectrum lots
where there are complementarities between lots in different auctions
can lead to very profound exposure risk.
Provision of information
The more information that is made available the more efficient the
outcome provided that collusion or forms of strategic bidding are not
present. A key piece of information that may have a significant impact
on bidding strategy is the number of bidders. If only the incumbents
are bidding then demand is likely to match supply and there is a
much greater chance that some spectrum lots will be sold at reserve.
Reserve prices
A high reserve price reduces the benefits of strategic demand
reduction and also reduces the opportunities for price discovery. High
reserve prices do discourage frivolous auction participation. If the
price is not met, then lots will go unsold and the auction may be
considered as a failure.
Bid increments
In multi-round auctions non-discretionary bid increments are
increasingly standard as discretionary bid increments have been
used to implement strategic bidding strategies such as signalling.
Non-discretionary bid increments also reduce the scope for human
error when submitting bids.
Spectrum trading
The assumption of spectrum trading suggests that any inefficiency in
the auction outcome can possibly be rectified afterwards although in
practice it cannot be relied on as transaction costs (e.g. capital gains
taxes) are non-negligible and there may be anti-trust issues. There
are few examples of spectrum trading and it is not obvious why a
competitor will help a rival for less than the full economic benefit.
12
Apart from the
auction format, there
are many aspects of
an auction that
should be carefully
examined and
addressed in the
response during a
spectrum
consultation

Coleago's approach to spectrum consultations
13
 Provide policy makers with evidence based information that is
necessary to make an informed opinion and decisions that take
into account your needs.
 Provide the regulatory body with evidence based information in
order to influence the contents of the formal consultation
document.
 Provide the regulator’s staff with documentation that is not just
perceived as a lobbying document but actually furthers their
understanding of the issues at hand. If the inputs are seen to be
of value by the regulator this will maximise the lobbying impact.
 Scope a PR campaign to reach a wider audience and capture the
political debate.
Objectives
Coleago will provide a written report addressing the following:
 The development of a clear statement of your desired outcome for
internal purposes.
 Analysis of the policy objectives, the regulator’s position and
desired outcome.
 Couching your desired outcome into language and arguments in
line with the stated or unstated policy objectives.
 Providing rational argumentation, including evidence from other
markets, which support your arguments.
 Advice and collateral with regards to the PR campaign.
Key Outputs
Successful lobbying is based on reconciling the
optimum outcome for the bidder with the
optimum outcome from the regulator's
perspective.
As a starting point we need to understand the
current situation. Any argumentation submitted
to the regulator must be evidence based, i.e.
precedence from other markets in a similar
situation as well as theoretical arguments.
At best, your lobbying documents are
perceived to be of value to the regulator’s staff
because they provide good insight and
evidence that will help them to successfully
execute the allocation of the spectrum. Given
most regulator's limited resources this point
may be of particular importance.
Approach
Lobbying should
take place prior to
the issue of the
formal consultation
document in order to
influence the policy
that underpins the
allocation, the shape
of the consultation
process and the
contents of the
consultation
document.
The audience
extends beyond the
regulatory agency
and includes
politicians, MPs,
NGOs and other
stakeholders.
Situation Analysis
Statement of Your
Internal Position and
Desired Outcome
Statement of Policy
Objectives and the
Regulator’s Desired
Outcome
Information and
Arguments Presented to
the Regulator
Evidence to Support the
Argumentation

Coleago’s approach to a spectrum consultation is based on analysis and rational argumentation
14
Lobbying should
start in advance of
the formal
consultation
process, however
depending on the
timing the pre-action
lobbying step may
have to be skipped
Main Tasks Deliverables
1
The spectrum
landscape
Analyse the distribution of existing spectrum among operators and
examine likely competing positions.
Understand the future availability of spectrum, which blocks in which
bands will become available at what dates
 Clear view of present future
distribution of spectrum and future
availability
2
Analysis of own
spectrum need
Utilisation of existing spectrum, band plan, analysis of technology
eco-system (band combinations in devices, spectrum aggregation),
high level analysis of demand and future spectrum need for capacity
and coverage
 High level spectrum utilisation plan
 Eco-system evolution (band
combinations in devices, spectrum
aggregation)
3
Analysis of
competing bidders
Identification of potential competing bidders and determine their likely
auction objectives and position during consultation
 Report about other bidders and their
position and likely objectives
4
Statement of
optimum outcome
Together with your management team Coleago formalises a
statement of optimal outcome from your perspective
 Statement of your desired auction
objective
5
Review regulatory
policy objectives
Analysis of the spectrum licensing policy objectives and
understanding the criteria for selection of methods of spectrum
allocation
 Report with an understanding of
spectrum allocation process
6
Lobbying prior to
formal consultation
Outline of lobbying and PR campaign and develop key messages and
produce collateral
 Document with lobbying messages
7
Response to
consultation and
cross submissions
Review of the regulator’s proposed spectrum allocation auction format
and rules
Development of argumentation in favour of your position based on
policy objectives, situation analysis, international comparisons;
 Draft submissions (1 round) and draft
cross submission
 Coleago branded independent report
8
Questions on final
determination
Analyse final determination and identify points that require further
clarification
 List of questions for clarification

Indicative duration and resource requirement
Indicative Manday Requirement
In cases where Administered Incentive Pricing (AIP) models are not
required, the mandays requirement is as follows:
 Development of high level spectrum need and spectrum strategy
would require technical and marketing consultants for 20 to 30
mandays in total over a three to four week period. It should be
noted that this work might also feed into the valuation work, i.e.
time may be saved later on depending on the requirements.
 The support during the lobbying process, including the analysis
and production of relevant documents depends entirely on the
process and whether our work commences prior to the issue of
the consultation document or afterwards and what type of
independent public reports need to be generated. In our
experience the process requires a significant number of meetings
and iterations with senior management. In the range of 20 to 40
mandays may be required. The duration would be dictated by the
consultation process.
 In cases where AIP models (ODV and BAU) and benchmarking
are required around 80 mandays would be needed to develop the
models and extract and manipulate relevant benchmarks.
Typically two full time and one part time consultant would work on
this over an eight week period.
15
The work involved
depends largely on
the scope and
whether ODV and
BAU spectrum
pricing models need
to be developed
Week 1 Week 2 Week 3 Week 4 Week 5
Analysis of spectrum landscape
Analysis of own spectrum need
Analysis of competing bidders
Statement of your optimal
outcome
Review regulatory policy
objectives
Lobbying and PR campaign
outline and collateral
Draft and submit response to 1st
consultation
Independent Coleago branded
report

Coleago’s Approach, Methodology and Deliverables
Spectrum Valuation
16
3

Overview of the spectrum valuation process
17
Spectrum Valuation
Coleago has
developed a proven
methodology for
valuing spectrum
which is summarised
here
Main Tasks Deliverables
1 Data collection
Much of the necessary data is gathered prior to the arrival of the consulting teams
through the use of templates. Once the team has arrived a series of kick-off
meetings are held to review and understand the data and identify gaps.
 Historic and current data to
populate the valuation model
 Spectrum landscape
2
Spectrum &
eco-system
review
Coleago will analyse the current spectrum holdings and future options, not only in
this auction but in the foreseeable future. We will overlay those with the evolution
of the technology eco-system, notably LTE band combinations in devices and
carrier aggregation, MiMo, etc.
 Appreciation of spectrum
options and understanding of
the implications for each
option
3
Valuation
scenarios &
business impact
Workshops to determine your business’s strategy and key assumptions for the
“with spectrum” and “without spectrum” business cases including deployment
rules, agree sources of spectrum value and the rules for impact on the business,
notably customers & revenue depending on the auction outcome.
 Agreed valuation scenarios,
assumption sets and rules for
input into valuation model
4
Marketing
modelling
Coleago uses a proprietary approach to forecasting customers, revenues, and
traffic that combines both top down and bottom up approaches. Our methodology
allows for the efficient developments of business cases with the ability to quickly
and easily examine a range of sensitivities and scenarios.
 A range of demand forecasts
for revenue and traffic for
handset and large screen
devices
5
Network
modelling
Our network planning model is integrated with our customer and revenue
forecasting. The network model examines busy hour traffic and develops roll-out
plans that combine both coverage and capacity driven network expansion.
 A populated and integrated
technical model
6
Financial model
and valuation of
different blocks
Revenue forecasts and network capex and opex forecasts are combined in our
financial modelling and valuation suite. The model develops the financial
statements and KPIs which allow us to benchmark the reasonableness of forecasts
against our database of KPIs. We value the business with and without the
spectrum using Discounted Cash Flow. The valuations are benchmarked against
our database of spectrum prices paid at previous auctions.
 A populated and integrated 15
year financial model
 A valuation of the blocks for
the different spectrum bands
 Supporting benchmarks
7 Risk analysis
We run sensitivities and scenarios to identify the key levers of value creation and
assess the business case for risk.
 A report on the sensitivity of
the valuation to assumptions

Indicative spectrum valuation project plan and milestones
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9
Kick-off meetings and agreement
of approach and valuation points
Data collection and review
Strategic and scenario planning
Marketing modelling
Technical modeling
Financial forecasting / modelling
and valuation
Initial Valuation complete
Competitor Valuations
Valuation presentations, review,
iteration, risk analysis
Final valuation review and
agreement
Milestone
Spectrum Valuation
Key milestones
include:
Data collected
Scenarios agreed
Assumptions agreed
Modelling
completed
Draft valuations
Competitor
valuations
Final valuations
18
Data collected
Demand scenarios agreed
Modelling completed
Initial valuations delivered
Valuation
presentation
Valuations
agreed
Note: The project will be conducted in English and all deliverable will be in English.
Competitor valuations complete

Resource requirement
Overview of the Team
For a spectrum valuation, Coleago are proposing a small, highly
experienced team of consultants which will interface easily with your
team. We propose 3 full time consultants and 2 part time consultants
as well as a part time project director
The team structure is as follows:
 Client Relationship – responsible for managing the relationship
with you, contractual matters and billing as well as providing a
peer review of key results and advising on methodology and
approach. This role is not full time.
 Project Management – responsible for managing the Coleago
team and interfacing with your project manager. This role also
focuses on developing the valuation framework, scenarios and
evolving the discussions around strategy as well as reporting and
presenting. This is a full time role.
 Marketing Modelling – responsible for generating the market
demand forecast and marketing forecasts down to gross margin.
This is carried out by the same person as the project management
role.
 Financial Modelling – responsible for taking the results of the
market demand forecasting and technical modelling work streams
and combining the results to develop full financial forecasts and
valuations. This is a full time role.
19
Spectrum Valuation
The project will be
delivered by a team
drawn from our
highly experienced
group of consultants.
Financial Modeling
and Valuation
(Full Time)
Technical Modeling
(Full Time)
Client Relationship
(Part-time)
Technical Strategy
(Part Time)
Project
Management,
Valuation
Scenarios, Market
Model
 Technical Strategy – responsible for advising on the spectrum and
technology strategy as well as debating and discussing key
assumptions for radio and capacity planning purposes such as
throughput and other elements of technology performance. This is
not a full time role.
 Technical Modelling – responsible for developing the technical
model and working closely with you to understand the existing
network and current network strategy and reflecting the
assumptions from the technical strategy discussions in the model.
This is a full time role.
Manday Requirement
For an indicative eight to ten week project and depending on the
scope we would require around 90-100 man-days.
On-Site Presence
The valuation work requires considerable interaction with the client‘s
team and hence almost all work would take place on-site.

Coleago helps you to develop your auction strategy to
ensure that you obtain your preferred block as cheaply as
possible
Auction Strategy and Readiness
20
4

A well defined auction strategy should take account of the key issues in an auction
Economic efficiency
Auctions are said to be economically efficient if they allocate
spectrum to the bidder who places the highest private value on the
spectrum. A well designed auction should seek to ensure the most
economically efficient outcome subject to the attainment of other
policy objectives such as maintaining or promoting competition or
raising revenue. An economically efficient auction is best for a strong
bidder, whereas a weak bidder may prefer formats that allow for
unexpected outcomes.
Exposure risk
The existence of complementary lots generates exposure risk.
Exposure risk is the risk that a bidder seeking to aggregate
complementary lots bids for the lots on the basis of their synergistic
valuation. The bidder is then outbid on one lot and is left with a
stranded lot at a price which is greater than its stand alone valuation.
For example high and low band spectrum are complementary in
terms of capacity and coverage. Contiguous spectrum lots are also
complementary. Exposure risk arises in the SMRA format and
SMRA-AS, although the latter is designed to alleviate exposure risk.
Substitution risk
Two items are said to be substitutes if an increase in the price of one
item leads to an increase in demand for the second item. For
example 800 and 900 MHz spectrum are seen as potential
substitutes. Substitution risk arises when bidders are unable to
arbitrate between two substitutable spectrum lots in response to
changes in price. Substitution risk is present in SMRA auctions.
Threshold risk for new entrants
A potential response to the issue of exposure risk is to allow bidders
to make package bids for combinations of lots which together deliver
synergies. Package bidding will favour bidders targeting large
packages of spectrum lots. Auction designers can overcome this by
setting aside spectrum for new entrants but this may drive up
demand for the remaining lots.
Transparency and certainty over outcomes
Uncertainty over outcomes is particularly high in the CCA format
which uses package bidding and prices are determined using a
second price rule. When bidders place a specific bid in an auction
there is a preference for certainty as to what will be the outcome of
that bid in terms of which lots will be won and at what price.
Pricing rules
A lack of uniformity in prices is a particular issue in the CCA format
where there is the potential for embarrassing outcomes. Operators
generally have a preference for low prices for themselves and,
possibly, higher prices for other bidders for similar spectrum lots. The
worst outcome is usually regarded as paying a higher price relative to
other bidders for similar lots.
Activity rules
Activity rules are a key element of all multi-round auctions and
govern the behaviour of participants during each round. Generally
they are used to promote honest or sincere bidding and to manage
the speed of the auction but they can also be used to enable bidders
to manage exposure or continuity risk. It may be possible to “park”
eligibility points on spectrum blocks with (relative) impunity to prevent
a rise in the price of desired blocks.
Corporate governance issues
A very significant challenge with combinatorial or package auctions
(e.g. CCA) is that the set of required valuations can quickly become
computationally burdensome or indeed infeasible. As the number of
available lots increases, the number of possible combinations grows
exponentially. Setting bid limits and approving bids are a corporate
governance challenge in CCA auctions.
21
The issues
surrounding a
spectrum auction
depend on the
particular auction
design

Different spectrum auction formats pose different challenges for operators
Auction Formats and Rules
The format and rules of spectrum auctions flows from policy
objectives and regulatory intent. Depending on the spectrum on
offer, the existing spectrum landscape , the expected level of
competition in the auction, and the Client’s spectrum need particular
auction formats may be preferred.
Auction formats may have specific rules that may or may not serve
the Client’s interests and these should be analysed carefully in order
to influence these rules to support the Client’s objectives.
The table below summarises key aspects associated with SMRA,
SMRA-AS and CCA auction formats.
22
Auction design can
have a significant
impact on auction
outcomes
Design Principle SMRA SMRA-AS CCA
Simultaneous award of spectrum PPP PPP PPP
Flexibility over the use of specific or generic lots PP PP P
Consistent with proposed spectrum packaging PPP PPP PPP
Capable of implementation without package bidding PPP PPP O
Transparency of bidders and bids PPP PPP PP
Certainty over prices paid PPP PPP O
Certainty over lots awarded PPP PPP O
Certainty over total expenditure PPP PP P
Simplicity and ease of presentation and transparency of results PPP PP O
Aggregation risk PPP PPP O

Bidding strategy, bid limits, valuations and value creation
23
In developing a
bidding strategy and
potential bid limits
the business must
trade off value
creation against the
likelihood of
acquiring the
spectrum
Theoretical maximum
value of the spectrum
Bid limit
Amount actually paid
Value created
In an auction with a second price rule the amount actually paid is
determined by the value the next highest bidder places on the spectrum
To estimate the potential for value creation it is important to value the
spectrum to other bidders
The theoretical bid limit is calculated by comparing the business with the
spectrum against the business without the spectrum – if you bid this
much you would create zero value
The operator’s board will determine the proportion of the maximum they
are prepared to pay in the case of certain auctions such as a first price
auction, in order to secure the spectrum – but they hope to pay less
The value created by acquiring the spectrum is the difference between
the theoretical maximum value of the spectrum and the amount paid to
acquire that spectrum.
Bid Limits and Value Creation
Valuation, valuation, valuation
Auction design has improved dramatically in recent years and within
Europe the focus has been on economic efficiency – awarding
spectrum to those operators who can generate the maximum value
from its use (subject to considerations of competition). In order to
achieve economic efficiency auction designers have sought to
develop auctions where operators are encouraged to bid “honestly”
or “sincerely” which means that they bid based on the value they
place on the spectrum and only retire from the auction once auction
prices have exceeded their valuation. If the auction designer has
developed a good auction then bidding strategy should be relatively
straightforward but valuation will remain critical. Most game theorists
will stress to their clients that confidence in their valuations is
paramount.
Spectrum valuation however is not a simple task even in the most
straightforward of auctions. Valuation presents very significant
challenges when multiple bands are being auctioned simultaneously.
In light of the fact that spectrum is both substitutable and
complementary auction designers often adopt a combinatorial auction
design and even when such a design is not chosen the bidders must
adopt a combinatorial or package based approach to bidding. The
result of this package or combinatorial approach is that bidding
strategy may well require the operators (at least in theory) to value
every conceivable combination of spectrum. Furthermore this task
may well have to be repeated for competitors. The result is that
valuation points can in theory multiply into the hundreds and even
thousands.

Auction strategy, an introduction
Setting bid limits
Valuation is the most important aspect of a spectrum auction and
essential to bid limits. However, with multiple lots on offer setting bid
limits becomes complex. A bidder’s board will delegate the task of
bidding to a bid team and the board will provide the bid team with a
bid limit which cannot be exceeded. From a corporate governance
perspective it is essential for the bid team to have certainty that their
total potential expenditure when they participate in an auction will not
exceed their given budget limit.
In an SMRA auction, the combination of lots awarded and prices paid
together determine the total expenditure for an auction participant,
while in a CCA auction, it will be determined by the most expensive
package bid submitted in the supplementary or assignment rounds.
Learning
Bidders typically do not avail themselves of the information that is
made available by multi-round auctions. The auction may reveal how
other bidders value lots and what they want. A critical question for
bidders is to what extent you regard your valuations as common and
whether you would alter your valuation to reflect information revealed
in an auction process.
Bidding “sincerely”
Auction design has improved dramatically and the focus has been on
economic efficiency – awarding spectrum to those operators who can
generate the maximum value from its use (subject to considerations
of competition). In order to achieve economic efficiency auction
designers have sought to develop auctions where operators are
encouraged to bid “honestly” or “sincerely” which means that they bid
based on the value they place on the spectrum and only retire from
the auction once auction prices have exceeded their valuation. Pay-
offs from strategic bidding may be low and unexpected
consequences could be costly. However, most auctions have
features which means operators have to develop an auction strategy.
Considerations for strategic bidding
Strategic bidding can arise in all auction formats. There are many
different examples of strategic bidding and can generally be defined
as seeking to “game” the auction to achieve a better result than
sincere and straightforward bidding based on the value placed on the
spectrum. Examples of strategic bidding are provided below.
Collusion: A SMRA can be viewed as a negotiation between bidders
as to how to allocate lots amongst themselves. Bidders have been
observed to use signalling through coded bids to coordinate the
division of licences. If tacit collusion can be coordinated quickly
through signalling the auction will end quickly with low prices.
Parking: Bidding on lots that are low priced but high in eligibility
points which are not of interest to the bidder but are valuable for
preserving eligibility. Parking strategies are used to avoid bidding on
desired lots in order not to increase their price (demand reduction),
whilst retaining the ability to increase demand on desired lots at a
later stage. Parking can also be used for punishing.
Predation: A strong bidder has an incentive to develop a reputation
for aggressiveness in order to reinforce its advantage. If a bidder has
a reputation for aggressiveness this will discourage others from
participating in an auction or bid less aggressively. In CCA auctions,
strong bidders can at almost no risk to themselves drive up the prices
for weaker players by submitting bids for very large packages that
they do not really want.
Strategic demand reduction: In auctions for multiple lots where
prices are uniform bidders have an incentive to shade their bids
(reduce the bid limits below their valuations) for multiple lots. The
reason for the differential in shading is due to the fact that demanding
more lots will raise the price on all lots and so the more lots that are
demanded the greater the incentive to shade bids to reduce demand.
It is the differential in shading that generates the inefficiency .
24
In order to bid
successfully in
modern auctions a
bidder must develop
an auction strategy.
This is a process
quite distinct from
spectrum valuation.

Develop bid strategy: an integrated approach
 Formalise a bidding strategy covering all stages of the auction.
 Understanding what combination of blocks the Client should bid
for and at what thresholds bidding should switch between blocks.
 Obtain the preferred combination of blocks at the lowest possible
price and avoid being stranded with unwanted blocks.
 Be prepared to participate effectively in the actual auction, i.e. to
place bids round by round for different combinations of blocks.
Objective
Key Activities
An integrated
approach to bid
strategy
development is
needed, covering
auction analysis,
simulation, and
empirical validation
of strategic
hypotheses
 Comprehensive analysis of auction format and rules, and report
on opportunities, risks, and mitigating strategies
 Testing and validation of strategic hypotheses
 Formulate, agree and document definitive bid strategy
Key Output
25
Auction Theory: We apply the principles of economic game theory
analysis to identify a dominant bidding strategy. We test the
hypothesised dominant strategy in mock auctions and through
simulations. The iterative process is workshop and facilitation based,
and ensures a robust strategy and a well prepared and trained bid
team capable of executing the strategy effectively. These workshops
create auction awareness among your management.
Simulation
& Testing
War
Gaming
Auction
Theory
Bid
Strategy
Mock Auctions: These are the training ground for staff executing
the auction and are required to test systems. In Coleago’s experience
the participation in mock auctions is also an “eye opener” for senior
management, helping them to understand the risk associated with an
auction of either overpaying or not obtaining the desired combination
of spectrum blocks.
Auction Simulations: While a mock auction gives some strategic
insight, running hundreds or even thousands of computer simulations
produces a much better understanding of possible outcomes and
thus gives better insight into the outcomes of different bid strategies.
Auction
Objectives
Package Values
& Bid Limits
Competitor
Intelligence
Bid Play-Book
Analysis of Life
Auction Data
Updated Forecast
& Plan
Inputs for strategy
development
Strategy
design process
Live auction
execution

Overview of auction strategy development and auction readiness
26
Spectrum auctions
present operators
with considerable
risk – the risk of not
securing essential
spectrum but also
the risk of over
paying, the so called
“winners curse”.
Objectives Deliverables
1
Auction objectives,
valuations, bid limits
Understand the work of the valuation team. To agree
auction objectives. Set bid limits and explain rationale.
 Senior management workshops and statement of the
client’s primary and secondary auction objectives
 Recommended bid limits.
2
Develop competitor
intelligence
Identify competing bidders and ascertain their auction
objectives, auction strategies and bid limits relative to
own valuation.
 Report covering competitor objectives, bid limits and
likely auction strategy.
3 Develop bid strategy
Generate actionable insight into the auction format
and rules, and into the underlying opportunities, risks,
and mitigating strategies.
 Report with analysis of auction rules & format.
 Report on game theory aspects and combinatorial
properties of the auction, opportunities, risks and
mitigation and other theoretical aspects.
 Senior management presentations and workshops.
4
Develop bid
optimisation &
support tools
Create the tools that allow Coleago to validate bid
strategy and support the implementation of the bid
strategy in a live auction environment.
 Excel bid-optimisation tool and Excel based auction
tracking tool, with price-prediction capability (subject
to auction format).
5
Bid strategy testing
and refinement
Validate strategic hypotheses through auction
simulations and quantify risks and opportunities
 Testing of alternative bid strategies.
 Identification and quantification of risks and
opportunities. Empirical validation of supplementary-
bid optimisation and price prediction capabilities.
6
Mock auctions &
auction readiness
Test the bidding strategy and to train the auction team
and to test auction support tools, bid room protocols,
procedures and disaster recovery as well as providing
insight to senior management .
 Hold two mock auctions.
 A tested final bid strategy and a trained bid team with
tested auction support tools and procedures.
 Audit of the organisation’s readiness for the
impending auction.
7 Game plan
To be able to execute the bid strategy in accordance
with robust corporate governance.
 The Auction Game Plan Report covering all aspects
relevant to the successful execution of the auction.

Deliverables and resource requirement
Deliverables
Coleago will deliver the following:
 Conduct workshops with senior management to understand
valuation creation in the context of the spectrum valuation and
auction, to set bid limits, explain the implications of the auction
format, and recommended bid strategy.
 Recommended initial bid strategy hypothesis
 Simulation software and auction support tools to test the bid
strategy hypothesis
 Bid team training, including mock auctions
 The Auction Game Plan Document:
– Statement of hierarchy of primary auction objectives
– Secondary auction objectives
– Valuation matrix and bid limit matrix
– Identification and description of auction trigger points for
switching auction objectives and / or bidding strategies – e.g.
bid limits approached, risk of eligibility being compromised,
signs of strategic bidding
– Description of bidding patterns or behaviour to look out for
which might indicate forms of strategic behaviour from other
bidders
– Contingency plans in response to strategic bidding or irrational
bidding
– Competitor bid limits and triggers for re-assessment of
competitor valuations
– Triggers for bid limit escalation procedures
– Bid team roles and responsibilities
– Bidding protocols and procedures
– Disaster recovery
– Post auction press releases prepared for win / lose outcomes
27
Around 50 to 90 man
days are required for
auction strategy
Client Resource Requirement
The work requires considerable interaction with the Client’s team and
hence most of the work would take place on-site.
Because considerable interaction is required, the Client must ensure
that relevant project team members are available for the project in a
timely manner. This includes senior management with regards to
making decisions notably agreeing the auction objectives and setting
bid limits. The auction participants must be available for the mock
auctions.
The Client must make available a secure environment to discuss the
auction details and also a facility to hold the mock auctions. Typically
we expect to have two to four people per team with a minimum of
three bidding teams per mock auction.
Manday Requirement
Typically the work would be carried out during a six to eight week
period, depending on the auction format, required speed and
availability of client staff to take place in the mock auctions.
Coleago’s project team would include:
 Academic auction panel members
 Senior consultants
 Director review and oversight
Depending on the exact requirements in total we would require from
50 to 90 mandays for this work stream.
On-Site Presence
The work requires considerable interaction with the client ‘s team and
hence most of the work would take place on-site.

Indicative auction strategy and readiness project plan and milestones
We recommend
running three mock
auctions including
one with the
government
auctioneer.
The mock auctions
also provide a
chance to test
protocols and
disaster recovery.
28
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7
Auction objectives, valuations,
bid limits
Develop competitor intelligence
Develop bid strategy: analyse
auction format and rules
Develop bid optimisation &
support tools
Bid strategy testing and
refinement
Run three mock auctions (incl.
one with government) plus
check auction readiness
Write and present game plan
Auction objectives agreed
Auction support
tools complete
Mock auctions
complete
Game Plan
delivered
Bid strategy
agreed

Coleago provides you with support during the auction so
you are prepared for the next day’s bidding
Live Auction Support
29
5

Supporting the client during the auction on a round by round basis
30
Coleago will support
the Client during the
auction with on site
presence and
additional access to
the wider Coleago
team.
The Benefit of Auction Support
In theory the client enters the auction well prepared and the auction
itself is a mechanical exercise. However, as the auction unfolds there
will invariably be some learning which must be processed at the end
of each day so that the client enters each auction day well prepared
for the next day’s bidding.
A senior Coleago consultant would be part of the auction team. This
team member would support the bid team by:
 Ensuring compliance with bid protocols and procedures
 Selection of optimal bid
 Providing support should the unexpected happen
 Input on daily communications
 Input in the daily strategy review
Unexpected Events
During the auction the client needs to be able to manage unexpected
events which may arise within or outside of the auction process and
review the results of each round as they conclude.
Ideally the client will have a clear bid strategy and well trained team
and no unanticipated events occur. However, Coleago will participate
as a full time member of the bid team to advise on round-by-round
tactical bid decisions as well as how to respond to external and
internal events which may alter the view of valuation and therefore
bid limits.
Daily Bid Strategy Review Meeting
Coleago will moderate daily bid strategy review meetings which will
provide the client with an “insurance policy” if the auction does not
proceed as anticipated.
We propose to hold the review meetings at the end of each day, so
that additional experts from Coleago’s team can dial in as and when
needed. This gives the client the benefit of access to a wider team
without having the costly on-site expense.
Daily Reporting and Strategy Review
At the end of each day the client will need to analyse the days
bidding and review its strategy going forward. The client can access
a broader Coleago team if required to provide inputs to the daily
strategy review.
Communications
At the end of each days bidding the auction team will need to inform
senior management on the days activity and provide insights on the
likely auction outcomes.
The client will need to develop an internal communication strategy
which covers:
 Recipients
 Timings
 Format and medium
 Content
In addition to internal communications the client should prepare its
external communications prior to auction should the client acquire/not
acquire spectrum.

Deliverables and resource requirement
Deliverables
Coleago will deliver the following:
 On-site presence of one Coleago expert for the duration of the
auction - the consultant will have been part of the team working on
the previous phases.
 Moderate daily bid strategy review meetings.
 Access to the wider Coleago team for end-of day reviews via
telephone.
Manday Requirement
The man-days required for this phase depend on the length of the
auction. We would expect one consultant to be present on-site
throughout the auction and further consultants, directors and
academic auction panel members to be on call for the end-of-day
review session as needed.
Fees will be charged on a time basis for each category of consulting
staff and expenses at cost.
31
Example, on-site auction support in India
A Coleago consultant was on-site with the client for the duration
of the BWA auction. The Coleago consultant organised daily
review meetings at the end of each auction day. The purpose of
the review meetings was:
 to update auction tools,
 analyse and review the results,
 make decisions for next day’s bidding.
It is important to bear in mind that the purpose of the review
meeting was not to review bid limits; these had been previously
set.
In addition, Coleago conducted two sessions via video links with
Coleago’s UK based auction expert. The main purpose of these
meetings was to review bid strategy and issues such as
complementarity and scale with the view to avoid being stranded
with unwanted blocks.

Coleago has conducted spectrum consultations,
valuations and auctions world-wide. Our experience
includes projects as recent as this year thus ensuring
that we are familiar with latest developments.
Coleago’s Relevant Experience
32
6

A powerful combination of skills and experience
A powerful combination
Ensuring success in the forthcoming consultation and auction will
require an effective partnership between the Client and Coleago .
Coleago delivers a rare combination of the skills and experience
described below. In this section we seek to demonstrate that Coleago
is uniquely placed to offer this combination.
Business planning expertise
Developing spectrum valuations involves developing a supporting
business plan. Coleago’s consulting team has been developing
telecoms business plans since 1994 and the lead project Director,
Graham Friend, along with Coleago co-founder Stefan Zehle are the
co-authors of the award winning “The Economist’s Guide to Business
Planning.” The proposed consulting team all have extensive business
planning expertise.
Business modelling expertise
To support a business planning project and to develop spectrum
valuations Excel business modelling skills are required. Given the
likely large number of valuation points, the need to value spectrum to
all likely auction participants and the need to develop a range of
alternative scenarios to deal with uncertainty over issues such as
demand and technology the consulting team must have exceptional
modelling skills.
Coleago’s Excel modelling credentials are unrivalled. The firm
develops best practice Excel business models based on the
methodologies and approaches which are described in “The
Economist’s Guide to Business Modelling”. Coleago’s models are
based on the Coleago MAPPED Modelling Methodology which
delivers user friendly, modular and therefore, flexible models which
are fit for purpose. Coleago also provides training to telecoms
companies such as France Telecom, Telefonica and Vodafone.
Telecoms experience
Our business planning and modelling expertise has been developed
exclusively within the telecoms sector. We are not just experts in
business planning and modelling but experts in deploying these skills
in the context of the telecoms sector. Furthermore, our consultants
are drawn exclusively from the telecoms industry itself.
Spectrum related experience
Coleago consultants have been focusing their telecoms business
planning and modelling expertise on spectrum related projects for 17
years. Our experience encompasses some of the most challenging
spectrum valuation projects that have taken place which have
combined not only combinations of different spectrum bands but
regional and temporal combinations as well adding additional layers
of complexity. We are sought out by industry publications for our
insight on spectrum auctions and for access to our spectrum auction
database. Recent press comment and white papers include:
 “Making sense of recent European spectrum auctions”
 “German spectrum auction prices – demand is the key driver”
 “Spectrum auctions and shareholder value”
 “Digital Dividend 2013 timeline”
 “Austrian 2.6GHz spectrum auction”
 “A fundamental flaw in the Indian 3G spectrum auction”
 “3G spectrum prices in India”
Spectrum consultation related reports
 Coleago produced a report for the World Bank on “Best Practice
in Spectrum Renewal and Pricing” (2011).
 “A Critical Assessment of Alternative Auction Formats”, on behalf
on a mobile operator in Australia (2011).
 “ComReg Auction Design Analysis - A review of the proposed
ComReg auction and commentary on the suitability of the design”
on behalf of a mobile operator in Ireland (2010)
33
Coleago’s experience
Coleago combines
expertise in business
planning and
modelling with
extensive
experience in
telecoms and
spectrum valuation
Guide to Business
Planning named
Outstanding Academic
Title 2009
The Guide to Business
Planning, which recently
appeared in its 2nd edition
was named as one of the
"Outstanding Academic
Titles, 2009 (Business and
Economics)" by Choice, the
US academic review journal.
Source: Choice, 5th of
January 2010

About Coleago Consulting
34
7

A leading boutique telecoms consulting and training firm
Operators and regulators
Telecoms operators around the world trust Coleago to
provide insight and advice on key strategic and commercial
issues through our broad range of consulting and training
services.
Experience based consulting approach
We do not use inexperienced associates or analysts – all our
consultants have a minimum of 10 years experience and
most have over 15 years, often at board level in operational
businesses. Our insight and advice is therefore based on
practical experience and proven processes and
methodologies developed over many years. Clients can be
confident that their project will be delivered by Partner and
Senior Manager level consultants from start to finish and our
solutions and recommendations will be credible, relevant,
realistic and practical.
Developed and developing market experience
Coleago has worked with clients in developed markets and
also in some of the most challenging emerging markets
including the Yemen and the Sudan and we have launched
and operated GSM businesses in countries such as Algeria.
Small, effective teams
Our consultants are highly experienced, multi-skilled and
have extensive project management experience. This allows
Coleago to deploy smaller teams as we do not require the
hierarchy of traditional consultancies to manage large teams
of juniors. Clients find our small teams easier to work with
and integrate into their own project teams.
Exceptional value
By eliminating many of the overheads of traditional firms we
are able to offer end-to-end partner level consulting at fee
rates that provide exceptional value.
35
Coleago Consulting
Based in the UK
Coleago provides
consulting and
training services to
global and regional
telecoms, media and
technology players
Advice covering a broad range of technologies
We have advised clients on wireless, fixed, cable, satellite and fibre based
technologies. We have specialist expertise in spectrum valuations and
spectrum auctions have participated in more than 50 awards since 1994.
Media and technology experience
We have developed strategies and business plans for media companies, TV
channels and web based businesses as well as technology companies.
Innovative training services
Coleago has developed a range of training and management development
programmes, including a War Game (business simulation)
Junior Consultant
Senior Consultant
Manager
Senior
Managers
Partner
Analyst
Traditional
Consulting Firm
Model

We provide a broad range of consulting services
36
Coleago Consulting
We specialise in
telecoms business
analysis, planning
and modelling to
ensure that our
advice and
recommendations
deliver increased
shareholder value
Strategy & Business
Planning
Marketing & Customer
Management
Regulation &
Interconnect
Business
Transformation &
Cost Reduction
Due Diligence
Improving Network
Performance
Spectrum and
Licences
Digital Content &
Media
Fund Raising
Strategy Development,
Marketing Strategy
War Gaming Business Planning Business Modelling
Spectrum Strategy
Spectrum Valuation for
Auctions
Spectrum Auction Bid
Strategy
Licence Applications
Market Forecasting &
Market Planning
Market Segmentation &
Customer Insight
Customer Life Time
Management
Improving Customer
Care
Commercial Due
Diligence
Technical Due Diligence
Cost Reduction Restructuring Turnaround
Network Audit Network Sharing Outsourcing
Interconnect Cost
Modelling
Interconnect
Agreements and RIO
Regulatory Strategy Accounting Separation
TV Business Planning Digital Media Strategy
Digital Content
Monetisation
Information
Memorandum
Equity Fund Raising Debt Fund Raising

We offer an innovative suite of training, development and coaching services
Specialist Telecoms Trainers
Our trainers are first and foremost telecoms industry
experts who are able to gain the respect of
programme participants. They are also outstanding
trainers with a passion for their subjects.
Telecoms Focus
Our programmes are developed exclusively for the
telecoms sector and use real life telecoms case
studies, examples and benchmarks throughout.
Bespoke Solutions
We develop bespoke solutions for clients often
utilising information about their specific markets to
illustrate key points.
Tailored Deliver
We provide pre-course questionnaires and hold
telephone interviews with every participant to ensure
that each and every delivery contains the right
content delivered at the appropriate level.
Innovative Programmes
We use simulation tools, role plays and challenging
case studies to provide an entertaining and
rewarding learning experience.
War Gaming
Our War Game process is the most realistic
simulation of a telecoms market currently being
offered and is the closest thing to running a
telecoms business after actually running a telecoms
business!
37
Coleago Consulting
Our telecoms War
Game is a unique
and exceptional
management
development
platform and our
Dragons’ Apprentice
offers a new
approach to team
building
The Telecoms Mini-
MBA
War Gaming & The
Dragons‘ Apprentice &
Coaching
Finance for Non-
Financial Managers
Technology
Investment
Appraisal & Excel
Modelling

Coleago has delivered assignments for global operators and smaller players
38
Coleago Consulting
Our clients include
fixed and mobile
operators, MVNOs,
equipment vendors,
regulators and
content providers
P4 Poland
Gibraltar
Regulatory
Authority
VIP-Net
GSM d.o.o
Croatia
Kuwait
Sudan
Saudi Arabia

Coleago’s consultants lead and shape the industry
39
Coleago Consulting
Coleago is regularly
asked to speak at
key telecoms
conferences around
the world as well as
sitting on
governmental
working groups and
industry bodies that
shape the future of
the industry
Business texts written by the founders of Coleago
Guide to Business Planning named Outstanding Academic
Title 2009
The Guide to Business Planning, a book authored by Graham
Friend and Stefan Zehle the Directors of Coleago, which recently
appeared in its 2nd edition was named as one of the "Outstanding
Academic Titles, 2009 (Business and Economics)" by Choice, the
US academic review journal.
Source: Choice, 5th of January 2010
www.lib.uwo.ca/news/business/2009/12/23/outstandingacademictit
les2009businesseconomics.html
Participating in shaping the telecoms industry
 Coleago’s consultants are actively involved in telecoms
industry events. For example, Stefan Zehle, Coleago CEO,
spoke at over 20 conferences and forums, and most recently
at the GSMA Spectrum Workshop in London (June 2010).
 Coleago consultants are cited in the press world-wide
including Total Telecom, Wall Street Journal, Wall Street
Journal Asia, Deutsche Welle, Business & Economy India,
Financial Times, New York Times, BBC News.

Coleago Consulting - Spectrum Services Summary

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Coleago Consulting - Spectrum Services Summary