Canadian Telecom.M&A
- 1. CANADIAN TELCO REGULATION,COMPETITION AND M&A
- 2. … to enhancethe efficiency and competitiveness, at the national and international levels, of Canadian telecommunications Telecommunications Act, 1993
- 3. WIRELESS SUBSCRIBERS PER100 INHABITANTS
- 4. AGENDA Global TrendsRegulatory Impacts 3. Future for Canadian Telecom
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- 6. 1. Global TrendsSource: An Investment Banking Perspective on Communications Sector M&A , Lehman Brothers (2007) # TELECOM DEALS VALUE % of TOTAL M&A VALUE 1998 1,100 $360 billion 14.3% 1999 1,500 $849 billion 26.5% 2000 2,000 $620 billion 18.3% 2005 1,100 $330 billion 12.2% 2006 1,200 $295 billion 8.3% 2007 900 $224 billion 6.5%
- 7. 2. Regulatory ImpactsENTERPRISE VALUE (Oct. 2007)
- 8. 2. Regulatory ImpactsBrief history: Until 1989 – Multi-jurisdictional regulatory scheme Until 1994 – Legal protection of local monopolies Current framework: Shift to competition from monopoly More simplified regulatory scheme Foreign ownership, price and license restrictions Spectrum auction
- 9. 2. Regulatory ImpactsHow does Canada stack up?
- 10. 2. Regulatory ImpactsSource: An Investment Banking Perspective on Communications Sector M&A , Lehman Brothers (2007) COUNTRY/REGION EV/2007 EBITDA 2007-2009 EBITDA CAGR CURRENT DEBT/EBITDA US 7.2x 7.8% 1.5x Japan 5.0x 2.0% 0.9X China 7.8x 5.3% 0.9x India 16.9x 30.4% 1.6x Europe 6.5x 2.4% 2.1x Canada 8.2x 7.6% 1.9x
- 11. 2. Regulatory ImpactsSource: Forbes online Company P/E (12 months normalized) AT&T 11.9x Verizon 14.0x Telus 7.3x BCE 8.4x
- 12. 3. Future forCanadian Telecom Transition to free market: too conservative? Concentration concerns: death march? If so, is Belus the answer?
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