SVP Advisors is an international management consulting firm for the Telecommunications, Media and Technology (TMT) sector, with expertise in regulation, economic modelling, business strategy and corporate finance.
Established by seasoned professionals in 2006, we have earned over time a solid reputation within the TMT sector thanks to our quantitative and practical approach to problem solving.
Our work combines various disciplines such as economics, econometrics, finance, accounting, marketing and engineering. Our international client base includes telecom operators, media and internet companies, telecom regulators, international organisations and financial institutions.
2. Contents
1 About Us
2 Experience in Regulation
3 Experience in Economic Modelling
4 Experience in Business Strategy
5 Experience in Corporate Finance
3. Who we are
SVP Advisors is an international management
consulting firm for the TMT sector1, with expertise in
regulation, economic modelling, business strategy
and corporate finance
Established by seasoned professionals in 2006, we
have earned over time a solid reputation within the
TMT sector thanks to our quantitative and practical
approach to problem solving
Our work combines various disciplines such as
economics, econometrics, finance, accounting,
marketing and engineering
1 Telecommunications, Media and Technology
3
4. Areas of Expertise
REGULATION
Regulatory Strategy
Competition & Market
Analysis
Policy Setting
ECONOMIC CORPORATE
MODELLING FINANCE
Costing Systems Transaction Support
& Placement
Pricing Models
Due Diligence
Margin & Profitability
Analysis Valuation &
Benchmarking
BUSINESS
STRATEGY
Commercial Strategy
Business Planning
Business & Product
Development
4
5. Approach
Partnership
We believe in the potential of effective teams
(designed as networks of value, to best serve the interests of our Clients)
Focus
Our services are built around our core competencies and experience
(so that we can have a tangible, positive impact on the results of our Clients)
Independence
We provide impartial and sound advice
(so that our Clients can take fully informed decisions)
Fact-driven
We use clear and measurable evidence to reach relevant conclusions
(using sound arguments and with the support of quantitative analytical tools)
Practicality
We conceive solutions for the real world
(taking into full account constraints and specific circumstances)
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6. International Footprint
Madrid
(HQ)
Miami
Bangalore
Associate office
SVP Advisors Offices
SVP Advisors Assignments (15 countries)
Previous Team Experience (26 countries)
6
7. Clients
We work with some of the world’s largest and well-
respected institutions and operators, and we are
Clients distribution, by type
often invited to present at international conferences and
workshops addressing the latest topics in the TMT sector
Our international client base includes:
Telecom Operators such as Telecom Italia, Telefónica
and Turkcell
Media and Internet Companies such as Babelgum
and BetonLive
Telecom Regulators such as AGCOM, CMT, CITC, EETT
and NITA
Int’l Organizations such as the European Commission
and the IADB
Financial Institutions such as Santander and Citibank
7
8. People
Francisco Velázquez Julio Villalobos Dimitri Kallinis
Partner Partner Partner
New Ventures & Technology & Business Strategy
Financing Expert Regulatory Expert Expert
Over 10 years experience in Over 10 years experience in Over 10 years experience in
strategy advice and financing in technology and regulation in the strategy advice and operations in
the TMT sector TMT sector the TMT sector
Telecoms financing expert, Extensive international track- Has lead several international
participated in over 10 large M&A record of modelling, regulatory strategy consulting assignments.
transactions and in over 20 and strategy consulting projects Former Head of Residential Unit at
syndicated loan transactions over for fixed and mobile operators in On Telecoms, a leading Greek
the last few years. He has actively several Countries worldwide. 3Play Operator, responsible for
participated in innovative ventures Former Team Leader of Content, Pricing, Sales Strategy
through an investment fund Technology Strategy at Telefónica and MarkComms
Areas of expertise: new Areas of expertise: fixed and Areas of expertise: broadband,
technology and media ventures, mobile networks, regulatory MVNO, IPTV, business planning,
start-ups, innovation, financial strategy, regulatory accounting commercial strategy and market
transactions and techno-economic modelling analysis
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9. Contents
1 About Us
2 Experience in Regulation
3 Experience in Economic Modelling
4 Experience in Business Strategy
5 Experience in Corporate Finance
10. Price Squeeze Analysis of Narrowband and Broadband Offers
Client Margins of a typical double-play offer considering
economies of scale and technology choice
NITA (Telecoms Regulator) - Denmark
Project Description
Analysis of bundles fixed-line offers comprising
narrowband and broadband services, using an ad hoc
developed prize squeeze tool which calculated costs and
revenue of a reasonably efficient operator
The tool takes into account a vast array of wholesale
services including narrowband origination and
termination, broadband bitstream access and LLU
Additionally to the analysis, we assisted the Regulator in
drafting the methodology on margin squeeze
Results & Benefits
Allows the Regulator to assess whether an alternative Note: chart has been altered for confidentiality purposes
operator can market its services profitably based on the
wholesale inputs provided by the incumbent operator Key words: competition analysis, margin squeeze
10
11. Audit of the Regulatory Cost Accounts of a Mobile Operator
Client Schematic Overview of the Mobile Operator’s
Regulatory Cost Accounting System
AGCOM (Telecoms Regulator) - Italy
Project Description Allocation Activities Cost
Inputs Allocation Allocation Services
Stage I Stage II Centres Stage III
Audit of the cost accounts for the year 2007 of a mobile AGCOM
Cost
Cost Accounts Activities Results
operator, prepared using the fully distributed cost Centres
Table 1
Internal
methodology under both the HCA and CCA1 standards. Management
System AGCOM
The audit included the following main tasks: Results
Table 2
FAR
Review of the methodology employed in the Traffic
Volumes
preparation of the cost accounts
Revenues
Reconciliation of financial and other relevant data
LEGEND
Review of the re-valuation of assets at current costs
Model
Review of the full cost allocation process Input Allocation Stages Output
Results & Benefits
We identified necessary and/or suggested amendments
to the operator’s costing systems and quantified the
impact of such changes on the cost of regulated services Key words: regulatory accounting, cost models
1 HCA: Historic Cost Accounting, CCA: Current Cost Accounting
11
12. Assessment of the Telecommunications Policy in a Latam Country
Client Market efficiency gaps with different
technologies
COFETEL (Telecoms Regulator) - Mexico
Project Description 100%
Strategic review of the Mexican telecoms sector aimed at
identifying areas where public intervention would be 80%
required. We established market boundaries for each of
% Population coverage
the services considered and assessed, among others: 60%
Benefits and costs of several alternate technologies
40%
Role of communications in low income & rural areas
The review took into consideration the current market 20% Fixed telephony Mobile telephony Broadband
situation and international best practices on technology
developments and market structure/competition 0%
CDMA 450 Copper wire GSM 800 UMTS 100 WiMAX ADSL
Results & Benefits Market efficiency frontier Market sustainability frontier Current coverage
Provided recommendations on several policy areas
including regulation, social service, internet access
Key words: telecoms policy, market analysis
programs, spectrum management and education
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13. Establishment of Regulated Wholesale Tariffs
Client Retail-Minus Calculation Model
EETT (Telecoms Regulator) - Greece
Project Description
Development of a Discount Cash Flow Model to support
the establishment of regulated wholesale tariffs for
broadband services based on a retail-minus methodology
The DCF model was based on the typical operations of a
fixed operator while also taking into account the specific
market and operator conditions
Further support was provided to the client in carrying out
a public consultation to ensure adequate reflection of the
views of the different stakeholders and market realities
Results & Benefits
The results of the model were used by the Regulator in
establishing the tariffs to be applied to the incumbent
operator for its broadband services Key words: tariffs setting, broadband, retail-minus
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14. Contents
1 About Us
2 Experience in Regulation
3 Experience in Economic Modelling
4 Experience in Business Strategy
5 Experience in Corporate Finance
15. Bottom-Up LRIC Model for determining the cost of Mobile Services
Client Calculation flow of the Bottom-up LRIC Model
CMT (Telecoms Regulator) - Spain
Project Description
Development of a bottom-up LRIC model to calculate the
cost of a range of mobile services including wholesale
access, origination and call termination
Based on the pure-LRIC approach, the model takes into
consideration several factors such as QoS, demand
seasonality, technology choice (2G, 3G and LTE) and the
different use of available spectrum (refarming)
The model's several applications include the calculation
of the impact of network sharing on costs
Results & Benefits
The model built is highly flexible as it can provide results
for any type of existing or hypothetical/efficient
operator, depending on the inputs provided Key words: mobile termination, bottom-up models, LRIC
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16. Design of a Costing System
Client
General overview of the Costing System
Turkcell (Mobile Operator) - Turkey
Project Description
REVENUE ALLOCATION PROCESS
Design of a costing system aimed at fulfilling our client's (DIRECT TO SERVICES)
COST ALLOCATION PROCESS
regulatory and operational needs FIXED ASSET
REGISTER
Allocation to business
units by type of costs
Allocation of common and
joint costs to activities
and network elements
Allocation of support
activities to functional
blocks
Allocation to internal
services
Allocation to services with
transfer charges and
routing factors
STAGE 1 STAGE 2.1 – NW STAGE 3.1 –NW STAGE 4.1 – NW STAGE 5.1 – NW STAGE 6.1 - NW
NW business unit NW elements NW Functional Blocks Internal NW services WH services
Through a step-by-step process, the system allocated Stage 1.1 FAR
Fixed Assets
Capital related
costs by Asset
Operating network
Primary plant
Support equipment
Radio Link
Backhaul
Core
Statements at
wholesale markets
Origination
Statements WH
product 3rd parties
Voice & Video calls
Stage 1.2 P&L costs Backbone Termination Messaging
Organization costs Costs by IX Roaming Data
the company's actual costs to wholesale and retail
Department
Personnel DB & Platf orms Other Roaming IN
Other External
G&A Roaming OUT
Costs
COGS Other
RF
Interconnection
P&L Roaming
services (voice, SMS, data, etc...) Handsets STAGE 2.2 – RET STAGE 3.2 – RET STAGE 4.2 – RET STAGE 5.2 – RET STAGE 6.2 – RET
STATEMENT SIM cards Retail business unit Retail activities Retail f unctions Internal retail services Retail services
Other expenses Costs by Primary activities Sales - Acquisition Service-specif ic
Internal retail services Statements at
Department (customer related) Collections Service Group- retail markets
Sales & Marketing
Retail costs by Support activities Front-End specif ic Voice & Video calls
Other costs of
sales (e.g. NW
nature Rev Stim-Retention Acquisition-driven Messaging ACCOUNTING
operating costs) Non-op. Assets Product Customer-driven Data
In addition to actual financial information, additional
SEPARATION
External expenses Management Revenue-driven Roaming IN
Power COGS COGS Back Of f ice Churn-driven Roaming OUT REPORTS
Taxes Taxes & Fees Taxes & Fees COGS General & other Other -Internal
Taxes & Fees
BALANCE Non-attributable to
reporting
inputs such as routing factors were used in allocating telecoms activity STAGE 2.3 – REST STAGE 6.3 - CORP - Regulatory
SHEET Corporate Costs by General corporate
Stage 1.3 BS Department costs reporting
Working capital
network, retail and common costs to cost centres and TC – TRANSFER CHARGES
RF – ROUTING FACTORS
SPLIT BY CHANNEL SPLIT BY SEGMENT
subsequently to services SPLIT BY TARIFF
DW DW TRAFFIC OPERATING NW
SUBSCRIBER DATA VARIABLES ROUTING
DATA FACTORS
Results & Benefits
The system allowed the operator to prove full compliance
with regulatory obligations and to carry out a profitability
analysis of its wholesale and retail tariffs Key words: cost accounting, profitability analysis
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17. Calculation of the net cost of Universal Broadband Service
Client Average net cost per capita of universal
broadband service, by EU Member State
EU Commission - EU
Project Description 50
Development of a model to determine the net cost 45
associated to the provision of broadband to every
40
European household under several technological
35
5Y NET COST PER CAPITA EUR
30
scenarios, including wireline and wireless technologies
25
The calculation of the net cost was carried out at the 20
Member State level and took into account several factors 15
including the (possible) availability of spectrum from the 10
Digital Dividend or a mandated minimum bandwidth in 5
the broadband service provision
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
EU27 MEMBER STATES
Results & Benefits
The outcome of the model was instrumental in the
impact assessment of EU Policy options for the revision
of the Universal Service provision Key words: cost models, universal service, broadband
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18. Bottom-Up Model for determining the Cost of Postal Services
Client Calculation flow of the Bottom-up costing model
OCECPR (Telecoms Regulator) - Cyprus
Project Description 1. INPUTS 2. ALLOCATION 3. DIMENSIONING 4. COSTING 5. OUTPUTS
MATRIXES (ALLOCATION TO
Development of a bottom-up LRIC model covering all DEMAND
SERVICES)
services and activities of Cyprus Post in the postal value By service NETWORK OUTPUTS
By geo-type MAPPING DIMENSIONING
TO
chain: collection, sorting, transport and delivery DRIVERS
COSTING
PROCESSES By resource
AND
By cost category
Resources by ALLOCATION
By service
The model took into the account cost efficiencies MAPPING
activity
By activity
By service
EXTERNAL TO
achieved in certain processes, variations in costs due to FACTORS ACTIVITIES
By geo-type
CHARTS
different service parameters and geographical specifics
LRIC analysis
GEO-MODEL
Graphs
KPIs
The model provided the following outputs: unitary cost By route
UNIT COSTS SCENARIO
by service, cost by activity, cost by category, cost by ANALYSIS
By resource
resource employed Sensitivity
List of services List of service groups List of resources List of cost types
List of geo-types List of drivers List of Routes
List of ext. Factors List of activities
Results & Benefits
The model was instrumental in the assessment of the
pricing policy of Cyprus Post, including compliance with
regulatory obligations and competition principles Key words: postal services, bottom-up models, LRIC
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19. Contents
1 About Us
2 Experience in Regulation
3 Experience in Economic Modelling
4 Experience in Business Strategy
5 Experience in Corporate Finance
20. Assessment of MVNO Business Models
Client
Schematic Overview of the MVNO tool
Private Client (Mobile Operator)– Eastern Europe
Project Description
Development of a tool for determining the economics of
different MVNO business models to be potentially hosted
in our client´s network
For each MVNO business model, the tool provided
financial accounts (P&L, CF statement) and KPIs
(subscribers, ARPU, MoU, etc.) over a 5-year period
The modelling tasks were preceded by the definition of
the different MVNO business models, in terms of MVNO
type, business proposition and target market segment
Results & Benefits
The tool was instrumental in assessing the viability of
different MVNO business models under different market
penetration scenarios and cost structures Key words: MVNO, business modelling, wholesale strategy
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21. Study of Mobile Infrastructure Sharing Options
Client
Overview of alternate options of mobile
Private Client (Mobile Operator)– Eastern Europe infrastructure sharing
Project Description Increasing depth of network sharing
Review of mobile infrastructure sharing in EU25
Radio
countries covering different types of agreements ranging National Access Masts Site
roaming Network sharing sharing
from site sharing to national roaming, taking into sharing
account regulatory and commercial aspects, and
MNOs share the same physical compound but install
identifying the best practices in different countries Site Sharing
separate masts and mobile equipment (e.g. antennas)
This study was followed by the development of a
MNOs share the same mast or other structures (e.g.
business case for calculating the financial gains/losses at Masts Sharing
rooftops)
the wholesale and retail level associated with the nation-
wide provision of 2G national roaming MNOs share all access network equipment, but use
RAN Sharing
their own software and assigned frequencies
Results & Benefits A host MNO provides mobile services to the users of
National
The results of this study were used by our client in Roaming the roaming MNO in areas not covered by its network
shaping the most appropriate strategy and commercial
approach with regards to infrastructure sharing Key words: infrastructure sharing, national roaming
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22. Business Plan for an Internet Content Provider
Client Overview of the key economics of the Business Plan
Private Client (Internet Company) - UK
Year 1 Year 2 Year 3
Project Description
Addressable market (Units) 000 4,000.0 4,800.0 5,600.0
Development of a business plan for an international
betting company for a “real” live interactive football Active users 000 86.4 178.6 282.2
betting application, provided over the Internet Penetration % 2.2% 3.7% 5.0%
As part of our work, we assessed and provided inputs on Net ARPU (mth) € 4.7 4.6 4.4
the business model selected for the new application
Total net revenue € 000 4,915.0 7,282.6 12,048.6
Following that, we identified and analysed national
Total recurring costs € 000 1,161.7 2,228.1 3,635.1
markets showing greater potential for the application Total one-off costs € 000 798.1 1,040.0 1,388.4
based on the broadband penetration, average spend per
Gross Margin € 000 2,955.2 4,014.5 7,025.0
user and features of multiservice platforms
Gross Margin % % 60% 55% 58%
Results & Benefits
The model produced a full range of financials based on Note: figures have been altered for confidentiality purposes
different scenarios, and was instrumental in the
definition of our client’s markets entry strategy Key words: interactive services, business planning
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23. Business Plan for a Biotech Company
Client Illustrative graph of % of products achieving
milestones under different scenarios
Private Client (Biotech Company) - Switzerland
Project Description
Development of a business plan reflecting the new
100% 100%100%
enhanced operations of our client, a biotech company BEST
generating medicinal products through an innovative BASE
WORST
Internet-based technology platform
60% 60% 60%
In addition to opex and capex, the model calculated
revenue and costs for each single product in the
company’s pipeline based on the development lifecycle 25%
and discounting the probabilities of success in each 15% 15%
10%
8% 7% 5%
5%
clinical phase up to market authorization 3%
Hypothesis Licensing / Phase I-II Phase III Market
upfront payment Authorization
Results & Benefits
The business plan was instrumental in successful capital
increase round made by our Client for financing its future
planned operations Key words: biotech, business planning
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24. Contents
1 About Us
2 Experience in Regulation
3 Experience in Economic Modelling
4 Experience in Business Strategy
5 Experience in Corporate Finance
25. Due Diligence of a Mobile Operator
Client Illustrative example of the analysis carried out
during the Due Diligence process
Inter-American Development Bank - Colombia
Project Description
60%
Technical and market due diligence of a mobile operator Mexico
undergoing a round of re-financing through a $600 50% Colombia
million syndicated loan Ecuador
EBITDA margin
40%
Venezuela
Chile
We reviewed the operator’s business plan, focussing on Company B Peru
30%
Argentina
revenue, opex and capex forecasts, using market BrazilEcuador Argentina
Brazil Peru
20% Company A Chile
information and int’l benchmarks as appropriate Colombia
Mexico
10%
The assignment included on-site visits to perform
management interviews, on the ground market analysis 0%
0% 20% 40% 60% 80%
as well as network and operational facilities’ monitoring market share
Results & Benefits
We produced a due diligence report and a revised
business case based on our recommended values for
some sensible hypotheses and parameters Key words: due diligence, market analysis, business planning
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26. Transaction Support in the Sale of an Online Video Company
Client Competition Map – US Online Video Market
Private Client (Media Company) - USA
Project Description
Niche /
SVP Advisors acted as financial advisor in the sale of an Specialist
integrated web and mobile video platform providing
innovative, professionally produced and curated content
to a global audience Target
market
From preparation to execution, we supported the
company throughout the transaction process
Our activities included drafting due diligence material,
Mainstream /
identifying and contacting potential buyers, and setting Hit
up meetings and negotiations rounds
User- Professionally-
generated Content generated
Results & Benefits
Based on an assessment of the company’s market value Note: Size of the bubbles indicates Monthly Unique Users in the US
and potential, we defined a clear sale strategy and
provided a narrowed-down list of potential investors Key words: transaction support, online video
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27. For further information please contact:
Rafael Gonzalez
Senior Manager
Rafael.Gonzalez@svpadvisors.com
SVP Advisors Ltd.
Almagro, 15
Madrid, Spain