This document provides an overview of the fiber networks market in Q1 2014. It discusses the Dutch fiber market, European and worldwide fiber markets, and trends in the fiber market. It also covers market consolidation through mergers and acquisitions. The key points are: - The Netherlands has seen significant growth in fiber connections from 133,000 in 2006 to nearly 2 million in 2013. - Reggefiber controls around 85% of the Dutch FTTH market, with the rest held by various independent companies and local initiatives. - The Netherlands ranks highly internationally for broadband infrastructure and next generation access networks. However, it lags in active FTTH subscriptions due to existing cable and DSL networks.

1. Sector Report
Fiber Networks
2014 Q1

2. Contents
1. General
1.1 Introduction
1.2 Terminology
2. Markets
2.1 Dutch Market
2.2 European & Worldwide
3. Market Trends
3.1 Dutch Market
3.2 European & Worldwide Market
3.3 Country Differences
4. Market Consolidation
4.1 Mergers & Acquisitions' Activity
4.2 Growth Potential

3. Introduction
A cross-country report on the development of a solid fiber network infrastructure
During the past years we have seen a significant increase in the installation of fiber networks
throughout Europe. Whereas The Netherlands only counted an approximate 133.000 Fiber to the Home
connections in 2006, this number has grown close to 2 million connections at the end of 2013.
This report includes a cross-country comparison focused on the availability of Next Generation Access
networks and the development of fiber optics infrastructure. Additionally, this reports pays attention to the
emergence of local fiber networks in small-midsize municipalities in The Netherlands. Lastly, we identified a
list of recent M&A activity which supports the ongoing consolidation among.
This report has been compiled by BlueMind Corporate Finance, a member of the international Mergers Alliance network.
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4. Terminology
The below mentioned terminology summarizes the most common types of data exchange as described
throughout this report:
4
Abbreviation FttH FttB (A)DSL VDSL DOCSIS NGA LTE
Definition Fiber-to-the
Home
(usually
consumers)
Fiber-to-the
Building
(consumers and
businesses)
(Assymetric)
Digital Subscriber
Line
Very-high-bitrate
Digital Subscriber
Line
Data Over Cable
Service Interface
Specification
Next Generation
Acces
Long Term
Evolution
Technology Fiber reaches the
boundary of the
living space, such
as a box on the
outside wall of a
home.
Fiber reaches the
boundary of the
building, such as
the basement in
a multi-dwelling
unit.
Technology for
transferring data
over regular
copper phone
lines that can be
used to connect
to the Internet.
Technology for
providing data
transmission
faster
than ADSL over a
copper phone
line or coaxial
cable.
Technology that
permits the
addition of high-
speed data
transfer to an
existing cable
TV system.
Next-generation
access describes
a significant
upgrade to
symmetrical
broadband
access. Typical
NGA networks
include FttH and
VDSL.
LTE is a wireless
broadband
technology such
as 4G to support
roaming Internet
access via cell
phones and
handheld
devices.
Downstream
speed
up to 1000
Mbit/s
up to 1000
Mbit/s
up to 1.5 Mbit/s up to 50 Mbit/s up to 50 Mbit/s > 30 Mbit/s up to 100 Mbit/s
Upstream
speed
up to 1000
Mbit/s
up to 1000
Mbit/s
Up to 832 Kbit/s up to 15 Mbit/s up to 30 Mbit/s > 30 Mbit/s up to 50 Mbit/s
Table 1: Data transfer terminology used throughout this report.
Source: BlueMind

5. 2. Fiber Networks
Markets

6. Dutch Fiber Optics Market (i)
The Netherlands – National Statistics
• At the end of September 2013, The Netherlands
counted an approximate 1.9m households that were
connected (homes passed) to a fiber optics network.
• The number of households actually subscribed
amounted 626.000, or 33% with a conversion rate to
an actual subscription of 35-40%.
• Almost 85% of all FttH networks are
owned by Reggefiber (a joint-venture between
Reggeborgh and KPN), the remaining 15% is
controlled by various independent companies and
local initiatives. Please note that these numbers only
consider consumer-or FttH networks, business-or
FttB networks are excluded.
• More than half of all municipalities have been
connected to a fiber optics network (140
municipalities in 2011 vs. 210 municipalities in
2013).
Graph 1: Number of homes that are actually connected and/-or subscribed to a fiber network.
Source: Stratix (Q3, 2013)
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7. Dutch Fiber Optics Market (ii)
The Netherlands – Regional Statistics
• More than half of all municipalities have been connected to a fiber-optics network (140 municipalities in 2011 vs. 210 municipalities in
2013).
• Flevoland covers the largest number of homes passed (FttH) with an absolute percentage of 69% while Gelderland enjoyed the fastest
growth and increased from 13% in 2011 to 43% of homes passed in 2013.
• The strongest growth for 2014 (10% increase in homes passed) is expected in Overijssel. Until recently, Groningen and Zeeland used to
cope with relatively high installation costs. Alongside the availability of cable-and DOCSIS, growth of fiber networks is picking up now.
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Graph 1.1: Overview of regional differences among Dutch provinces from 2011 until 2013.
Source: Stratix

8. Dutch Fiber Optics Market (iii)
The Netherlands – Regional Statistics
• As can be seen in the regional map, the largest increase in the number of homes passed was noticed in the East of The Netherlands.
• Reggefiber, market leader in The Netherlands, primarily focused on small-midsize municipalities during the past years as those were
easy-to-manage targets with a relatively high conversion rate.
• However, 2013 experienced a significant shift towards bigger cities
which include Amsterdam, The Hague, Eindhoven and Tilburg.
Though, larger cities still seem to be somewhat of a problem due to
civil engineering issues and their high population density.
• Outskirts, or areas that are located far from the city center,
continue to cause a challenge for fiber optic cable providers.
Approximately 5-15% of all homes in a particular city are not
connected to a fiber optics network, thus full coverage remains
difficult.
• LTE or mobile 4G networks have proven to offer a suitable
alternative in rural areas to fiber optic networks in more central
areas.
Graph 1.2: Contractors are now shifting their focus towards bigger cities.
Source: Stratix (2013)
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9. Dutch Fiber Optics Market (iv)
A selection of national market players:
A selection of local market players:
Source: BlueMind 9

10. European & Worldwide Fiber Optics Market (i)
International ICT Rankings
• The Netherlands consistently covers a prominent position in the international ICT rankings as it scores particularly high in terms of fixed
broadband infrastructure quality and availability.
• In terms of broadband internet, The Netherlands has a strong developed infrastructure due to heavy competition among suppliers of
cable (DOCSIS) and DSL networks.
• The Netherlands is considered the absolute number 1 in terms of broadband subscriptions and ‘Next Generation Access’ (NGA). NGA
includes FttH, VDSL and TV cable (DOCSIS 3.0+).
Graph 2.1: Number of broadband and/-or NGA subscriptions per 100 inhabitants in 2012.
Source: Stratix, European Commission
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11. European & Worldwide Fiber Optics Market (ii)
International Fibre-to-the-Home Rankings
• With regards to active FttH/FttB subscriptions, The Netherlands remains out of the lead and is placed 25th (approx. 5% at the end of
2011).
• The reason why The Netherlands is not on top of the list in terms
of the number of active FttH subscriptions is mainly due to the fact
that the NGA broadband cable-and DSL infrastructure (> 30Mb/s)
is already well developed.
• The Netherlands is hindered by the ‘Law of the handicap
of a head start’ which means that countries, in which
broadband internet has not developed yet (e.g. due to a lack of
copper cabling), are now installing fibre-optic networks right away.
• Also, strong competition, a lack of legislation and (EU) subsidies
are powering growth of fiber optics technology.
• Although The Netherlands has a lower coverage of fibre-optic
networks, the degree of utilization or the so-called conversation
rate is above the EU average (33% vs. 21%).
Graph 2.2: Percentage of active FttH/FttB subscriptions the end of 2011.
Source: Stratix, European Commission
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12. European & Worldwide Fiber Optics Market (iii)
Coverage by Technology at EU level
• At the end of 2012, over 99.9% of European homes could
have access to at least a standard broadband network
considering all technologies (fixed, fixed-wireless,
mobile and satellite).
• Next Generation Access technologies (> 30Mb/s) are
available to 53.8% of homes as of the end of 2012. DOCSIS
3.0 cable has by far the highest NGA footprint (39.4%)
followed by VDSL (24.9%) and FttP (12%). The latter one,
FttP, includes both FttH and FttB connections.
• NGA technologies are most widespread in Romania,
Belgium, Lithuania and the Netherlands, where over 50%
of lines are high-speed. NGA lines are mainly based on
cable in the Netherlands and fiber (FttH and/or FttB)
in Romania and Lithuania.
Graph 2.3: Internet coverage by means of technology in the EU.
Source: European Commission, Communications Committee
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13. European & Worldwide Fiber Optics Market (iv)
Coverage by Technology at EU level
• Belgium, Lithuania, Romania and The Netherlands are the
most advanced in NGA.
• In Belgium and The Netherlands as close to 60% of fixed
broadband lines are at least 30 Mb/s as
a result of fierce platform competition between cable
and (V)DSL.
• The mid-range of 30-100Mbit/s also includes fiber
connections as not all fiber networks are able to generate
speeds over 100Mbit/s yet.
Graph 2.4: Broadband lines by speed per country at the beginning of 2013.
Source: European Commission, Communications Committee
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14. 3. Fiber Networks
Market Trends

15. Trends in the Fiber Optics Market (i)
The Netherlands
Growth Projections
• It is expected that the number of homes passed
with FttH will increase from approx. 2 million at
the end of 2013 towards 3 million in 2015. With a
stabilizing growth rate, the number of new FttH
connections is likely to average 500.000 per year.
• Reggefiber has indicated that it tends to have
passed 60% of all households in The Netherlands
by 2020, or 4.5 million households. However, the
expected conversion rate remains low at roughly
30%. The FttH Council Europe estimates a total of
17.9% active FttH subscriptions by 2017
compared to only 8.3% in 2013.
Graph 3.1: Expected growth in the number of homes passed in The Netherlands.
Source: Stratix, CBS
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16. Trends in the Fiber Optics Market (ii)
Positive Indicators
• The case for FttH is strengthening as costs continue to fall
and as the evidence for lower OPEX and energy costs grows.
• FttH Platform and Stedenlink have launched the ‘FttH
Awareness’ program to highlight the importance of ultra-fast
broadband technology for the near future.
• Strong growth in video-on-demand (e.g. Netflix) and other high-
bandwidth internet services.
• The housing market is picking up again and greenfield housing
will become an additional growth driver.
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Year Households Homes passed (P) Homes subscribed (S) Subscriptions Conversion rate (S/P)
2013 7.57m 1.91m 626.000 8.3% 33%
2015 7.60m 3.00m 990.000 13.0% 33%
Table: 3.1: Expected growth in the number of homes passed in The Netherlands.
Source: Stratix, CBS
Negative Indicators
• DSL vectoring, bonding and other developments are leading some
operators to consider DSL as fast enough and thus postpone any
investments into new fiber networks.
• Outskirts are still considered a problem as these depend on
subsidies or LTE technology.
The Netherlands
Growth Projections
• It is expected that the number of ‘homes passed’ with FttH will increase from approx. 2 million at the end of 2013 towards 3 million in
2015. With a stabilizing growth rate, the number of new FttH connections is likely to average 500.000 per year.
• Reggefiber has indicated that it tends to have connected 60% of all households in The Netherlands by 2020, or 4.5 million households,
but this seems to be somewhat overoptimistic as FttH Council Europe estimates 17.9% active FttH subscriptions by 2020 compared by
1.6% in 2013.

17. Trends in the Fiber Optics Market (iii)
Europe & Worldwide
Growth Projections
• In Western countries the picture will continue to be very
mixed, with other incumbents gradually joining the FttH
move but some sticking with cable-and (V)DSL.
• New entrants have had a big impact in Russia, Turkey,
Bulgaria, Romania and many of the most dynamic
markets, and growth in these countries will continue.
• Impact of mobile broadband: some substitution of fixed
broadband, and diversion of capital, but counterbalanced
by need for fiber backhaul, no major influence is foreseen.
Graph 3.2: Expected FttH household penetration by the end of 2017.
Source: FttH Council Europe
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18. Trends in the Fiber Optics Market (iv)
Europe & Worldwide
Positive Indicators
• Massive drive to FttH in Eastern Europe will continue, driven by
competition, strong demand, favorable legislation and low costs.
• High penetration/conversion rate encouraging some to build out further.
• Average broadband line speed continues to grow fast, priming the
market for FttH.
• The case for FttH is strengthening as costs continue to fall and as the
evidence for lower OPEX and energy costs grows.
• Devices per home increasing; user-generated video and photography
helping to drive higher upload demand.
• The housing market in Europe and the US is picking up again.
Negative Indicators
• Poor conversion rate in some areas such as France.
• Municipal movement making slow progress in some countries.
• DSL vectoring, bonding and other developments are leading some
operators to consider DSL as fast enough and thus postpone any.
investments into new fiber networks.
• EU severely cut the budget for new fiber projects in areas that don’t
have access to broadband internet.
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19. Country Differences
Main factors contributing to differences between countries (in approximate order of importance):
• Actual achievements to date
(e.g. availability of broadband internet, level of technology and internet speed)
• Attitudes and plans of the major potential builders
(e.g. attitude depending on a minimum required conversion rate)
• Impact and effectiveness of regulation and government policy
(e.g. private vs. state-owned, available subsidies)
• Competition and its impact
(e.g. level of market fragmentation, net-neutrality vs. network discrimination)
• Density of housing, proportion of MDUs and amount of green-field construction
(e.g. number of households, number of Multi-Dwelling-Units)
• Local appetite for high-bandwidth services
(e.g. use of video on demand services such as Netflix)
• Local construction cost issues
(e.g. availability of ducts, local civil construction factors)
Although the case for FttH and actual deployment both improved markedly in 2012, the gap
between different countries in Europe, and between EU and non-EU area, is still widening.
Source: BlueMind 19

20. 4. Fiber Networks
Market Consolidation

21. M&A Activity in The Netherlands (i)
• A selection of the M&A landscape in The Netherlands:
Table 4.1: Overview of the most prominent M&A deals in The Netherlands.
Source: Zephyr, BlueMind
Date Acquiror Country Target Country Remarks
July-05 Eurofiber NL Northern Light Rail NL
June-06 Reggeborgh Invest NL Eurofiber NL
March-07 Eurofiber NL iConnext (Telecom Utrecht) NL
March-07 Eurofiber NL Fastfiber NL
Jan-08 CIF NL CAI Westland (CAIW/Caiway) NL
Dec-08 KPN NL Reggefiber NL 41% stake deal
Feb-09 Reggefiber NL
Stichting Glasvezelnetwerk
Amsterdam
NL
Increase of stake from 30% to
70%
Feb-10 CIF NL CAI Krimpen a/d Ijssel NL
Feb-10 CIF NL CAI Loenen a/d Vecht NL
Feb-10 CIF NL CAI IJsselstein NL
Sep-11 CIF NL CAI Albrandswaard NL
Jan-12 CIF NL
KabelMedia Brabant-Gelderland
(KBG)
NL
May-12 Doughty Hanson (PE) UK Eurofiber NL Majority stake
21

22. M&A Activity in The Netherlands (ii)
• A selection of the M&A landscape in The Netherlands:
Date Acquiror Country Target Country Remarks
Nov-12 KPN NL Reggefiber NL
Increase of stake from 41% to 51%
(deal value € 99m)
Dec-12 cBizz (CAIW) NL Ebo Glasvezel NL
Jan-13 CIF NL CAI Hendrik-Ido-Ambacht NL
Jan-13 CIF NL SCAI Borculo NL
Jan-13 Reggefiber NL
Ontwikkelingsbedrijf Rotterdam
(OBR)
NL
Feb-13 CIF NL CAS Hilvarenbeek NL
Feb-13
Reggeborgh (Deutsche Glasfaser
Gruppe)
NL Sacoin DE
May-13 cBizz (CAIW) NL CAI Albrandswaard NL
May-13 Eurofiber NL Unet NL
Jun-13 Eurofiber NL Isilinx/IsiconneXion NL
Feb-14 KPN NL Reggefiber NL
Increase of stake from 51 to 60%
(expected deal value € 116-161m)
22
Table 4.2: Overview of the most prominent M&A deals in The Netherlands.
Source: Zephyr, BlueMind

23. M&A Activity Internationally
• A selection of interesting international M&A deals over the over the past years. Pleae note that most of these companies are active in
infrastructure as well as services.
Date Acquiror Country Target Country Deal value Pre-deal
turnover
Turnover
multiple
EBITDA
multiple
Sep-09 Zayo Group US Fibernet Telecom US € 62,6m € 47m 1,3 7,0
Feb-11
Time Warner
Cable
US
NewWave
Communications
US € 204,7m n.a. n.a n.a.
May-11
Vocus
Communication
AU
Digital River
Networks
AU € 2,9m n.a. n.a n.a.
Jan-11
Rogers
Communications
US Atria Networks US € 320,5m n.a. n.a n.a.
Jun-11 F2i Reti IT Metroweb IT € 436m € 51,6m 8,5 10,7
Nov-11 Level 3 US Global Crossing US € 2.273,9m € 1.977,5m 1,2 7,5
Jan-12 Zayo Group US Arialink Broadband US € 13,6m € 3,8m 3,6 n.a.
Jul-12 Zayo Group US AboveNet US € 1.738,1m € 365,2m 4,8 11,6
Aug-12 Zayo Group US Fibergate US € 92,8m € 11,2m 8,3 n.a.
Feb-13 Zayo Group US
Access
Communications
US € 29,6m € 2,3m 12,6 n.a.
Table 4.3: Overview of a number of interesting foreign M&A deals.
Source: Zephyr, BlueMind

24. Accelerated Growth
• As we have seen throughout this report, the coverage of fiber networks is
expected to grow further. The Netherlands will count over 3.0m of FttH
connections by 2015 of which approx. 1.0m will have active subscriptions.
• The previous section indicated that M&A is a hot topic. Due to strong
capital requirements, many small and local cooperatives are dependent on
external financing by means of equity or debt.
• In addition to large capital requirements, operational costs tend to be
significantly higher for small networks. By means of a merger or
acquisition, both parties are able to share in maintenance and platform
costs while still enjoying a certain level of independence.
• Currently, there are approx. 25 independent networks in The Netherlands
and as we consider acquisitions a logical sequence to support growth, we
foresee ongoing consolidation in the market.
24

25. Mergers Alliance is a group of award winning corporate finance specialists who provide high quality advice to organizations that require
international reach for their M&A strategies.
We focus on local and international deals up to US$500 million in value across a wide range of sectors. Over the past 12 months our
partner firms have collectively completed over 100 deals, in 30 countries worldwide with an aggregate value of over US$3 billion.
Each of our partner firms is an independent local specialist with an extensive transactional track record within their territories. All partners
are authorized by their local financial services regulator.
Over the past 10 years our professionals have been recognized as authorities on international corporate finance transactions and in
particular the Mergers Alliance advisers have built up a reputation for being:
• highly experienced in executing international transactions
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The Mergers Alliance Technology, Media and Telecom team brings global expertise and a broad transaction experience to our clients
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About Mergers Alliance
25
Ron Belt
Managing Partner,
BlueMind Corporate
Finance
Telephone
+31 73 623 8774
Email
ron.belt@bluemind.nl
Location
s-Hertogenbosch
Netherlands
Marleen Vermeer
Adviser, BlueMind
Corporate Finance
Telephone
+31 73 623 8774
Email
marleen.
vermeer@bluemind.nl
Location
s-Hertogenbosch
Netherlands
Stephanie Clerx
Senior Analyst, BlueMind
Corporate Finance
Telephone
+31 73 623 8774
Email
stephanie.clerx@bluemind.nl
Location
s-Hertogenbosch
Netherlands