1. Fiber to the Home networks,de-risking infrastructure assets forgrowthFttH Council Europe9 February 2011Communication Infrastructure FundJoost Goderie – Fund Managing Director Brengt de wereld bij u thuis.
2. Introduction Fund Management Equity Investors
3. CIF focuses on infrastructureThree layer model
4. Dutch market characteristics Fixed broadband bandwidth penetration = 90 % Multiple fixed and wireless infrastructures, hosting a wide range of diversified operators Strong competition on services and price Crowded market does not justify new infra investments
5. Why invest in infrastructure when? ‘New’ services do not increase ARPU Prisoners dilemma drives behavior in competitive environment Refurbishment of network that concentrates on technology is cheaper on the short run Consolidation is needed at the infrastructure level, as no service requires dedicated pipe Who takes the lead ultimately?
6. Fresh look, paradigm shiftCIF concentrates on existing demand for, as well asconsolidation of infrastructure, where:  Cable is the superior infrastructure in foreseeable future  Drive for open infrastructure is key for deploying FttH next to cable on short term  Result is long term de-risking of the cable-FttH asset, thus lowering the R.o.I. requirements of combined infrastructure
7. Equity financing pre-requisites1. Neutral, open access infrastructure model2. Long term lease agreement in place3. Consolidation of existing infrastructures and smooth transition of customers (brown field approach)
8. Trend is our friendCIF vision for 2020 Telcos/cable companies are connectivity companies using different infrastructures providing full OTT services. Basic infrastructure consists of fiber network, coupled to seamless mobile infrastructure. Structural separation of infrastructure and services commonly implemented. Institutional investors provide ‘patient capital’ for infrastructure.
9. Example: FttH next to Coax 2010-2013 HFC Infrastructure Fiber Area Amplifier PoP City COAX < 300m PoP Fiber Infrastructure Area PoP FiberLegenda Total # homes 153.000 Fiber A Fiber B FttH coverage 65% COAX FttH infra capex €100 mln Total infra investment €300 mln
10. How open?CIF advocate of open access model, whilst managingpredatory pricing by:1. Two lessees on FttH physical network2. Multiple lessees at wholesale level3. Guarantee full open IP
12. Conclusions Consolidation of infrastructures is key focus. FttH satisfies primarily existing, not future demand Always de-risk assets and stabilize cash flow, not visa versa Convincing existing owners is though, but do-able CIF: open for business