2014 05 23 Global Telecommunications

Global Telecom
Sector Review
May 2014
SECTOR REPORT
INSIDE THIS ISSUE
Global Telecommunications
1. Overview
Overview
2. M&A Snapshot The US telecommunications market witnessed a flurry of consolidation activity during
2013. Meanwhile M&A activity increased in Europe and other regions, as operators bid
3. Valuation Trends to build scale to achieve cost-efficiencies, diversify into new offerings, expand into new
geographies, and take advantage of low interest rates. The benefits of market consolidation,
4. Private Financings pursuit of incremental revenue growth opportunities and the need for new technologies
should continue to drive M&A activity going forward in 2014. In this report, we look at M&A
activity in 2013, the outlook for 2014 and analyze the trends over the last five years.
Mergers & Acquisitions

M&A Activity 2009-2013
Prior to 2009, the deal activity was concentrated around two periods: (i) 1999-2000, when
operators built scale prior to the dotcom bubble, and (ii) 2005-2007 during the regional
consolidation phase involving the US wireless market (including the $97 billion merger
between AT&T and BellSouth) and the European broadband sector. The table below shows
that after the deal activity in the telecom services sector picked up pace in 2010 and 2011,
it was relatively subdued in 2012 and 2013, with 347 and 325 completed deals, respectively.
The average deal size fell to $618 million in 2013 from $667 million in 2012 (the second-
highest level during 2009-2013). For disclosed deals, the average last twelve month (LTM)
revenue multiple improved marginally to 3.1x in 2013, while the average EBITDA multiple
of 8.1x was the second-highest over the past five years. The period between 2009 and
2013 also witnessed emerging market players engaging in aggressive M&A activity to
pursue new growth opportunities outside their domestic markets. Such as Indias Bharti
Airtel acquisition of the African operations of Kuwaits Zain for $10.7 billion, enabling the
company to expand its footprint in another high-growth market and also emerge as the
worlds fifth-largest telecom services operator by subscribers.
Total Average Median Average Average Median Median

Deal
Year Disclosed Deal Deal Revenue EBITDA Revenue EBITDA
Volume
Value Value Value Multiple Multiple Multiple Multiple
2013 325 84,096 618 23 3.1x 8.1x 1.4x 7.6x
2012 347 106,675 667 23 3.0x 11.2x 1.8x 5.4x
2011 435 149,351 722 25 2.5x 7.2x 1.5x 5.5x
2010 469 126,405 585 20 4.4x 7.4x 1.7x 6.4x
2009 385 93,560 490 12 5.1x 7.0x 1.9x 5.8x
Source: Capital IQ (in $ millions)
Focusing on Activity in 2012 and 2013

In 2012, the overall deal activity, was curtailed by rising competition (declining Average
Revenue Per User ARPU), tough regulatory pricing environments and tight credit
conditions. Activity in Europe suffered more because of the MTR (mobile termination rate)
cuts in the region. Although overall deal volumes in 2012 were modest, the average deal
value of $667 million (the second-highest over the five year period) was aided primarily by
two large deals (Oi SA-Tele Norte Leste Participacoes & Oi SA-Coari Participaes) averaging
Contact: approximately $27 billion. The largest deal in 2012 was in the Brazilian telecom space with
Matthew Johnson, Managing Partner Oi SA acquiring Tele Norte Leste Participacoes S.A. for $31.5 billion at a comparatively
mjohnson@redcapgroup.com low valuation of 1.3x revenue and 3.5x EBITDA versus the 2012 median multiples of 1.8x
310.696.4004 and 5.4x, respectively. If the proposed $39 billion acquisition of T-Mobile USA (a unit of
Deutsche Telekom) by AT&T had been successful, the deal activity in 2012 would have been
Redwood Capital much larger. However, in December 2011, AT&T withdrew its bid after the US anti-trust
950 Third Avenue agencies deemed the deal between the fourth-largest and the second-largest US wireless
Suite 2001 carriers to be anti-competitive.
New York NY 10022 In 2013, the much-awaited consolidation in the US telecommunications industry
www.redcapgroup.com materialized, with deals involving all the top five operators, completely transforming the
competitive landscape of the country. For disclosed deals, the average last twelve month
revenue multiple was about in line with 2012 levels at 3.0x. Although the deal activity did
www.redcapgroup.com Page I 1
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pick up in the second half of 2013, a number of those deals had not yet been completed by the
end of 2013, resulting in the run-rate for deal volumes in 2013 still lagging that for 2012. Although
2013 was driven by two large deals, namely SoftBanks acquisition of Sprint & China Telecoms
acquisition of the CDMA Network from its parent, averaging $25.5 billion, the average deal value of
$618 million for 2013 was the lowest in the past three years. The largest deal in 2013 was Sprints
acquisition by SoftBank at 1.1x revenue and an 8.9x EBITDA multiple as described in more detail
below. In 2013, the average EBITDA multiple reached 8.1x, but was still below 11.2x witnessed in
2012. We note that the rebound in the global telecom deal activity during 2013 is reflected in the
jump in median EBITDA multiples to 7.6x versus 5.4x in 2012, with the median deal size for disclosed
deals remaining constant at $23 million.
We believe the deal activity in the US has primarily been driven by the need to possess more
spectrum assets as data-hungry devices such as smart phones and tablets proliferate. Moreover,
deal activity involving debt financing, may have been driven by uncertainty over the continuation of
low interest rates, with the US economy likely to improve going forward in 2014. In October 2012,
T-Mobile USA agreed to merge with the fifth-largest US wireless carrier, MetroPCS Communications
(deal completed in April 2013), closing the gap with the third-largest wireless carrier, Sprint Nextel.
The deal provided T-Mobile USA with MetroPCS spectrum to deploy next-generation technology in
major US markets and enabled the company to compete more effectively in the low-cost prepaid
services market.
In October 2012, shortly after the T-Mobile USA-MetroPCS deal announcement, Japanese telecom
and internet services giant, SoftBank agreed to acquire a 70% stake in Sprint Nextel for $20.1 billion.
In December 2012, in a move to turnaround its diminishing fortunes, Sprint Nextel (SoftBanks target)
agreed to acquire the remaining ~50% stake in Clearwire, a provider of wireless broadband services
with the intention of expanding its spectrum portfolio and supporting its Long-Term Evolution (LTE)
network rollout. However, in April 2013, DISH Network, the second-largest US satellite TV carrier,
offered $25.5 billion for Sprint Nextel, setting the stage for a bidding war with SoftBank. In May
2013, the conflict intensified when DISH Network made an unsolicited offer for Clearwire as well at
$4.40/share, a 29% premium to Sprint Nextels already raised offer of $3.40/share. However, in June
2013, Sprint Nextel made a successful counter offer of $5.00/share, valuing Clearwire at approx. $14
billion, after which DISH withdrew its offer, paving the way for Sprint Nextel to take full control of
Clearwire in July 2013. Subsequent to the DISH offer for Sprint Nextel in April 2013, SoftBank raised
its offer in June 2013 to $21.6 billion ($16.6 billion in cash for a raised stake of 78% and $5.0 billion
in new capital infusion), which was accepted by shareholders. The deal was completed in July 2013,
a day after the acquisition of Clearwire, resulting in a new publicly traded company named Sprint
Corporation.
Over the years, markets have been rife with speculation over a deal between Leap Wireless
International and MetroPCS, rivals in the low-cost US pre-paid telecom services space. However,
subsequent to the merger between MetroPCS and T-Mobile USA in April 2013 and the acquisition of
Sprint Nextel by SoftBank, Leap was left with very few options. In July 2013 AT&T, the second-largest
US carrier agreed to buy Leap Wireless International, the fifth largest carrier (post the MetroPCS-T-
Mobile USA deal) for $1.2 billion, just a few days after the acquisition of Sprint Nextel by SoftBank.
Leap cited increased competition from the recent M&A activity, ongoing customer and financial
losses and constraints in raising additional debt for capital expenditure & spectrum as reasons for
the board recommending AT&Ts offer. The deal, completed in March 2014, provided AT&T with
additional spectrum, access to Leaps valuable tax assets and approximately 5 million customers
in the pre-paid segment. According to AT&Ts management the Leap acquisition provided it with
spectrum worth about $3 billion. Additionally, the deal also provided the company with access to
Leaps $3 billion tax net operating losses.
On 2 September, 2013, UK-based wireless operator, Vodafone announced an agreement to
divest 45% stake in its US joint venture, Verizon Wireless, to its partner, Verizon Communications
for a whopping $130 billion. The deal was completed on February 21, 2014 and allows Verizon
Communications to get complete control over its high-growth and profitable domestic wireless
operations in a fast-consolidating US market. On the other hand, Vodafone has monetized its US
asset and can utilize the funds to increase capex, raise dividends, and potentially lower its debt &
interest burden while increasing its flexibility for acquisitions. The deal was very attractively valued
at 9.4x LTM EV/EBITDA (median multiple of 7.6x in 2013). Upon completion of the deal, Vodafone
itself may become an acquisition candidate for any large telecom services provider seeking a
wireless play with significant presence in Europe.
In contrast to the deal frenzy in the US in 2012 and 2013, consolidation activity in Europe started
to pick up in the second half of 2013. European telecom operators are faced with the prospect of
saturated markets, high debt levels, regulatory pressures and expensive network upgrades, which
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may push some of them towards consolidation. In July 2013, Dutch telecom operator, KPN agreed
to sell its German wireless unit, E-Plus to Telefonica Deutschland for EUR8.55 billion at an implied
valuation of more than 9.0x 2013E consensus EBITDA. The deal will enable KPN to focus on growth
in the Netherlands and Belgium, lower its leverage (pro forma net debt/EBITDA) below 1.5x versus
2.2x at the time of the deal and recommence dividends for 2014. In August 2013, Mexican telecom
services provider, America Movil announced its intention to bid for the remaining shares of KPN
for about EUR7.2 billion. However, an independent foundation set up to protect the interests of
KPNs shareholders exercised an option to acquire about 50% of voting rights in KPN, thereby
creating a hurdle for America Movil to acquire a majority stake in the company. In October 2013,
America Movil withdrew its offer reportedly after negotiations got scuttled as KPNs management
sought a higher price. In the another major deal announcement involving Latin American and
European companies, in October 2013, Brazils largest phone company, Oi SA, agreed to merge
with Portugal Telecom. The merged entity will have more than 100 million subscribers and become
more competitive against foreign companies such as Telefonica, Telecom Italia and America Movil.
In September 2013, Telefonica announced that it would gradually raise its stake in Italys largest
telecom operator, Telecom Italia. However, since Telefonica and Telecom Italia own two of Brazils
largest mobile phone operators, Telecom Italia may be required to sell its profitable Brazilian wireless
unit, Tim Participacoes SA, to meet regulatory approvals and to reduce its debt. In November 2013,
PPF Group, a Czech investment group, agreed to acquire a 65.9% stake in Telefonica Czech Republic
for EUR2.5 billion. The deal, completed in January 2014, enables Telefonica to decrease its debt.
Telefonica has been selling its non-core assets to reduce its debt and allow it greater flexibility for
investments, and is currently in the process of selling its Irish unit to Hutchison Whampoa.
We note that the latter half of 2013 has also witnessed a slew of deals across various other regions,
including the Middle-East and Africa. In November 2013, Emirates Telecommunications Corp
(Etisalat) agreed to acquire Vivendis 53% stake in Maroc Telecom, Moroccos largest wireless carrier
for EUR4.2 billion in a deal which will enable Etisalat to expand its African operations, even as its
domestic market saturates. In November 2013, Mexican investment firm, Fintech Group agreed to
acquire a 22.7% stake in Telecom Argentina from Telecom Italia for $960 million as Telecom Italia
seeks to pare its debt.
The deal activity in the latter half of 2013 picked up significant momentum with a large number of
deals announced. The most prominent deal was Vodafones sale of its Verizon Wireless ownership
for about $130 billion, which closed in February 2014, leading to the overall deal value in 2014
already surpassing the overall deal values in 2013. After the huge consolidation activity in the US in
2013, Sprint and T-Mobile US have been reportedly eyeing a merger; although regulatory officials
have hinted that such a deal may face intense antitrust scrutiny. The reluctance on the part of
regulators to give a green light to the potential deal at the outset stems from the belief that further
consolidation in the US market amongst the top four players would undermine consumer interest
and allow players to freely raise prices.
Over the past few months, French conglomerate Vivendi had been mulling an IPO of its telecoms
unit, SFR, the second-largest operator in France by subscribers. In March 2014, French conglomerate
Vivendi announced that it had received binding offers for SFR from Altice, a cable-investment firm
and Bouygues, a French diversified major. Altice offered EUR10.9 billion in cash and a 32% stake
in the combined entity for a controlling stake in SFR through its subsidiary, Numericable, while
Bouygues (operating the third-largest French mobile unit by subscribers) offered EUR10.5 billion
($14.4 billion) in cash and a 46% stake in the merged entity. The potential Bouygues-SFR deal would
shrink the French mobile market to three players and thrust the combined company to the top
spot by subscriber base, ahead of the current leader, Orange, likely putting the deal under intense
regulatory scrutiny. On the other hand, regulatory authorities were perceived to view the potential
Numericable-SFR deal as a merger of fixed line and wireless assets, while still retaining the number
of telecom players in the industry. In a bid to avoid its deal from being disqualified on anti-trust
grounds, Bouygues announced a conditional sale of some of its network assets to the fourth-largest
French operator, Iliad for EUR1.8 billion, subject to its deal with SFR getting approved.
On March 14, 2014 Vivendi entered into exclusive talks with Altice over the next three weeks
for the sale of its SFR unit, hinting that the deal has greater likelihood to get a regulatory nod. In
April, Bouygues twice increased its bid by raising the cash portion to EUR15 billion, while lowering
Vivendis stake in the combined entity to 10%, and then again to EUR15.5 billion in cash and 5%
stake to Vivendi in the combined entity. Both the offers contained an earn-out clause of EUR500
million. However, Vivendi opted to sell SFR to Altice for about EUR13.5 billion in cash and a 20%
stake to Vivendi in the combined entity, with a potential for Vivendi to earn an additional EUR750
million if earnings targets are met.
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Global deal volume Proportion of deal value in 2013

175
1.6%
150 17.1%
20.1%
125 Europe
100 North America

75 2.5%
Africa & Middle East
50
25 Asia-Pac
0 LaAm & Caribbean

North Europe Asia-Pac Af rica & Middle LatAm &
America East Caribbean
58.7%
2012 2013
Source: Capital IQ Source: Capital IQ
Deal Value 2009 2010 2011 2012 2013

North America 47,503 19,245 36,773 14,577 49,384
Europe 14,296 43,615 75,139 20,068 14,346
Asia / Pacific 13,440 12,929 6,551 10,390 16,914
Africa / Middle East 7,263 3,546 2,195 7,446 2,112
Latin America and Caribbean 11,058 47,070 28,693 54,195 1,340
Total 93,560 126,405 149,351 106,675 84,096
From the chart and table above, we observe that in 2013 the M&A activity in North America surged
as deal volumes increased by 24.7% y/y on the back of strong consolidation trends. The deal value
of $49.4 billion (+238.8% y/y) was driven largely by the SoftBank-Sprint deal. Apart from North
America, all other regions saw a decline in deal volumes other than Asia / Pacific.
Cross-border deal volume Cross-border deal value break-up
50 100%
40 80%
30 60%
20 40%
10 20%
0 0%
North Europe Asia-Pac Africa & Middle LatAm & 2009 2010 2011 2012 2013
America East Caribbean
Europe North America
Africa & Middle East Asia-Pac
2012 2013 LatAm & Caribbean
Source: Capital IQ Source: Capital IQ
Deal Volume and Value 2009 2010 2011 2012 2013

Cross-border deal volume 96 91 86 90 71
In-country deal volume 289 378 349 257 254
Cross-border deal value ($ millions) 12,020 37,955 48,249 28,373 43,485
In-country deal value ($ millions) 81,540 88,450 101,102 78,302 40,611
Source: Capital IQ
From the table and charts above, it is observed that like in the recent past, even in 2012 the volume
and value of in-country deals were larger than cross-border deals. In 2013, deal value for
in-country deals lagged the cross-border deal value. In both the years, Europe continued to
dominate the cross-border deal volumes, accounting for about half of them. However, in 2013,
North America clearly dominated the cross-border deal value, on the back of the SoftBank-Sprint
deal. The preference for in-country deals reflects the confidence that acquirers place in their home
countrys regulatory process and also in achieving the targeted synergies. Although the global cross-
border deal value was subdued in 2012, Africa & Middle East witnessed a surge, driven by the deal
between France Telecom and The Egyptian Company for Mobile Services (Mobinil).
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Although the volume of cross-border deals in 2013 continued to lag in-country deals, the value
of such deals surpassed the in-country deals, indicating the willingness of some global operators
to seek significant scale and diversification, amidst slack domestic growth.
The Cable and Fixed-Line Market
In a bid to offer integrated telecom services, telecom operators globally have been scouting for
fixed-line assets. However, the race for fixed-line assets, namely cable assets, has got hotter as
other cable operators vie for customers by offering them bundled services such as TV, broadband
and telecommunications. Recently, Liberty Global, a US-based global cable operator announced
an agreement to acquire Dutch cable operator, Ziggo for EUR10.0 billion, less than a year after
completing the acquisition of UK cable operator, Virgin Media for an equity value of about $16
billion. In February 2014, Comcast agreed to acquire Time Warner Cable for about $45 billion in
stock, in a bid to combine the two largest U.S. cable operators.
Amongst telecom operators, Vodafone has been very actively scouting for acquisitions in the fixed-
line space in various countries as it aims to become a more diversified telecom services operator.
In July 2012, the acquisition of UK-based telecom operator, Cable & Wireless Worldwide (CWW),
provided Vodafone with access to CWWs fiber network and enabled it to become an enterprise-
focused integrated player in the UK. In June 2013, Vodafone bid for Germanys largest cable operator,
Kabel Deutschland for EUR7.7 billio to bulk up its fixed-line assets portfolio and offer triple-play
services of phone, internet and television subscriptions and become more competitive. In October
2013, Vodafone completed the transaction by acquiring about 76.6% stake in Kabel Deutschland. In
September 2013, South African wireless provider, Vodacom Group (a unit of Vodafone) announced
that it is in talks to acquire 100% stake in Neotel, South Africas second-largest fixed-line operator,
from its shareholders. The acquisition will boost Vodacoms fiber-optic footprint for offering high-
speed internet and related services while providing them access to additional spectrum. In March
2014, in another cable asset deal after Kabel Deutschland, Vodafone agreed to acquire Spains largest
cable operator, Ono for EUR7.2 billion (GBP6.0 billion) net of debt and cash. Vodafone intends to
deploy part of the receipts from the sale of its stake in Verizon Wireless to finance the deal. The deal
valuation of 7.5x 2013 EBITDA was based on the estimated run-rate cost and capex synergies by the
fourth year after deal completion of EUR240 million per year (before integration costs). Further,
the deal valuation also reflects the robust cross-selling opportunities between Vodafones mobile
subscribers and Onos fixed-line subscriber base. Notably, the deal for Ono signaled Vodafones
appetite for large telecoms deals as the European economy recovers after a prolonged recession.
We think Vodafone will continue to be aggressive in the M&A space, especially in the potentially
high data-growth markets, given the war chest it possesses after the Verizon Wireless sale.
In November 2013, Deutsche Telekom agreed to acquire GTS Central Europe, a predominantly fixed
telecom operator in Central and Eastern Europe for EUR546 million. The deal complements the
mobile-centric business of Deutsche Telekom in countries such as the Czech Republic and Poland,
where it can start offering integrated telecommunication services post deal. The lower deal multiple
(EBITDA 2012 of 6.3x vs. 2013 average of 7.6x) reflects the predominantly lower-growth and lower-
margin fixed-line assets being acquired (relative to mobile assets). We think as pure-play wireless
providers seek fixed asset acquisitions to offer bundled services and cross-sell to their current
customer base, the fixed-line, internet and cable assets may increase in price.
In May 2014, AT&T agreed to acquire the largest US satellite-TV provider, DirecTV for $48.5 billion in
cash and stock, possibly in response to the potentially heightened competition from the Comcast-
Time Warner Cable deal. We believe the deal provides AT&T with access to DirecTVs robust
relationships with content providers and a nation-wide TV presence, which it can leverage as online
viewing of video content through devices gains steam.
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US Wireless Market and Trends

According to IBISWorld, the top four players (Verizon, AT&T, Sprint and T-Mobile US) accounted
for about 94.7% of the US wireless industrys revenue in 2013, reflecting the M&A activity in the
country over the past five years, spurred by high customer acquisition costs amidst increasing
market penetration. According to CTIA-The Wireless Association, with the US wireless subscribers
reaching 326.4 million in 2012, the wireless penetration rate reached 102.2% from 99.7% in 2011,
indicating a saturated market. According to Statista, the US wireless market is dominated by two
major players, with Verizon accounting for 35% market share by subscribers in Q4 2013 (up from
34% in Q4 2012) and AT&T garnering a 32% market share (flat compared to Q4 2012). Sprint was a
distant third with a 16% share (down from 17% in the year ago quarter), followed by T-Mobile US
which gained share to 14% from 13% (including MetroPCS) in the year ago quarter, reflecting the
robust share gains on attractive plans.
US Wirless market share By Subscribers (%)
40.0%
35%
34%
35.0% 32% 32%
30.0%
25.0%
20.0% 17% 16%
15.0% 13% 14%
10.0%
4% 3%
5.0%
0.0%
Verizon AT&T Sprint T-Mobile US* Others
Q4 2012 Q4 2013
Source: Statista
* Q4 2012 data includes 10% market share of T-Mobile USA and 3% market share of MetroPCS
Verizon and AT&T have exhibited relatively lower and stable retail postpaid churn compared to
their challengers such as Sprint and T-Mobile US. In fact, over the past two years (from Q3 2011),
Verizon and AT&T have witnessed a steady number of retail postpaid net additions as they have
taken share from other players, driven by better coverage and networks. We expect the rising
smartphone penetration amongst postpaid subscribers, especially within the incumbent carriers, to
drive healthy wireless data and service revenue growth.
Retail post-paid net additions (000s) Retail post-paid ARPU
2,500 $70
2,000
1,500 $65
1,000
500 $60
-
(500) $55
(1,000)
(1,500) $50
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2011 2012 2013 2011 2012 2013
Verizon AT&T Sprint T-Mobile US Verizon AT&T Sprint T-Mobile US

Source: Company filings Source: Company filings
The average revenue per user (ARPU) for most players has shown an increasing trend till Q3 2013,
with the ARPU stabilizing or declining in Q4 2013. Although T-Mobile US had struggled to stem its
customer losses and declining ARPUs till recently, the company has managed to reverse this trend
since Q2 2013, adding 688,000 net branded postpaid subscribers followed by 648,000 and 869,000
corresponding net additions in Q3 2013 and Q4 2013, respectively, after it started selling the iPhone
and phones with installment plans and no contracts. Notably, the recent deal activity should make
the US wireless market more competitive. In fact, the resurgence of T-Mobile US, subsequent to
its merger with MetroPCS and its new pricing plans, is likely to drive further competition in the
space. Until recently, Sprint has been faced with mounting customer losses as it has grappled with
the complexity of maintaining two different networks. In June 2013, Sprint shut down the network
it acquired from its unsuccessful merger with Nextel. The company is now focusing its efforts on
building a faster network on LTE technology in a bid to compete effectively and grow its subscriber
base in 2014.
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Re-Emergence Of MVNOs
A Mobile Virtual Network Operator (MVNO) is a wireless operator which uses the network
infrastructure of another service provider to offer services to its customers. An MVNO acquires
access to the operators network at wholesale rates and charges retail rates to its customers.
After the initial euphoria surrounding MVNOs in 2005-2006, the failure of major ventures such as
ESPN Mobile, Disney Mobile and Ampd Mobile, restrained the growth of the segment. However,
MVNOs are back in favor with carriers who are looking to improve market share and penetrate
unprofitable segments, without diluting their core brand. The operator sometimes offers support
services such as customer care, billing and device procurement, allowing the MVNO to focus only on
marketing. MVNOs offer innovative plans, new devices and deploy unique marketing methods and
have seen strong growth amongst the incumbent operators.
According to a research by GSMA Intelligence, MVNOs and M2M connections have been contributing
to the growth in the US mobile operators subscriber net additions. Based on the research, MVNO
and M2M connections for Verizon Wireless, AT&T, Sprint, T-Mobile, US Cellular and Clearwire
have grown by about 30 million and reached about 70 million for the period Q2 2010 to Q2 2013.
Wholesale customers have increased, aided by the success of government-subsidized programs
offered by MVNOs. In Q2 2013, MVNO connections represented 51% of wholesale connections
amongst AT&T, Sprint and T-Mobile US.
However, with survival likely to remain a challenge, we foresee a lot of consolidation activity in the
MVNO space going forward. In May 2013, TracFone (owned by America Movil), the largest MVNO
in the US with a subscriber base of close to 23 million, acquired an MVNO of Verizon Wireless, Page
Plus Cellular, with around 1.4 million customers for an undisclosed amount. The deal rationale was
most probably to grow its customer base and also strengthen its MVNO relationship with Verizon. In
May 2012, TracFone acquired T-Mobile MVNO, Simple Mobile, with about 1 million subscribers, for
an undisclosed amount. The acquisition likely added new distribution channels for America Movil
and support for the iPhone was one of the probable reasons for the deal.
US Prepaid market drivers
In the past few years, the share of prepaid subscribers has steadily increased. Although the increase
in their proportion of the market is varying, growth has been witnessed across the board. Sprints
(including Nextel) prepaid subscriber base increased from 27% to 34.1% during Q4 2010 to Q4 2013.
Further, the prepaid subscriber base for T Mobile (excluding MetroPCS) rose from 15.5% to 23.1%
during Q4 2010Q1 2013, with the proportion of prepaid subscribers for T-Mobile US jumping to
40.3% by the end of Q4 2013, subsequent to the completion of its merger with low-cost carrier,
MetroPCS. The proportion of prepaid subscribers for US Cellular rose from 5.5% to 7.4% during Q4
2010-Q4 2013. However, the proportion of prepaid subscribers for AT&T has increased marginally
from 8.7% in Q4 2010 to 9.2% in Q4 2013, while for Verizon it has moved up from 5.0% to 5.9%
during the same period. For these five operators, the combined prepaid subscriber share increased
from 11.6% in Q4 2010 to 16.4% in Q4 2013. This means that 58% of the incremental subscriber
base for the major US telecom operators during the period has been from prepaid subscribers.
Prepaid subscriber base share for top 5 operators
10.5% 45.0%
Share of prepaid subscribers
9.5% 40.0%
8.5% 35.0%
7.5% 30.0%
6.5% 25.0%
5.5% 20.0%
4.5% 15.0%
3.5% 10.0%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012 2013
Verizon AT&T Sprint (including Nextel)
T Mobile US Cellular Combined
Source: Company filings
Previously prepaid plans were typically offered to those people who did not have creditworthiness
to qualify for post payment plans or could not afford to pay a high monthly fee. However, since the
economic downturn in 2008, the prepaid market has become mainstream in the US wireless market.
Initially, its growth was driven by the consumers need to better control costs of their wireless
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services. The companies also responded with more flexible prepaid pricing offers such as unlimited
and tiered prepaid offerings. Initially, the prepaid plans offered limited number of minutes, text
and data, however, now many provide unlimited prepaid talk, text, and data. Until recently, prepaid
plans were offered only by second or third-tier carriers, but now almost all major service providers
offer such plans.
Prepaid service users either bring a phone they already own or pay the full retail cost for a new
phone. With the emergence of cheaper smartphones, consumers prefer to get a separate deal on
the phone and its connectivity. Further, this offers wider choice of devices, allowing consumers
to change devices often and the flexibility of not having a contract with the carrier. The flexibility
offered by prepaid plans has also led to some customers switching from postpaid to prepaid. Another
factor driving the growth in prepaid plans has been the sales of tablets, such as the iPad, which may
require a separate data connection. The typical wireless plan chosen for these tablets is a month-
by-month prepaid agreement. All these factors have contributed to expanding the proportion of
prepaid subscribers.
Current state of the wireless networks
The emergence of iPhone as well as other smartphones, coupled with the prevailing unlimited
data plans led to a massive growth in wireless data consumption, which subsequently caused
high network congestion. Since then, carriers have made massive investments on their networks
to optimize them for high data capacity. This was carried out through various measures such as
acquiring more spectrum, increasing the number of cell sites, and upgrading of backhaul. In order to
stop network abuse, operators have also cut down on unlimited data plans and most of their current
unlimited plans throttle the data speed after a certain limit is reached. All major operators are now
rolling out LTE and its all-IP architecture to enable future voice traffic to be carried as data traffic on
voice over LTE. Verizon currently has the widest LTE coverage with 301 million POPs, compared to
225 million POPs for AT&T, and 157 million POPs for T-Mobile.
AT&Ts three-year exclusive partnership with Apple for iPhone gave it a head start in the smartphone
race, providing a dominant share among high-end customers. However, blockbuster sales of iPhone
also meant higher data usage, thereby clogging the bandwidth leading to sharp deterioration in
service quality. At that point of time, AT&Ts GSM network was supported by limited HSPA sites
and was not geared for this data onslaught. Since then, AT&T has invested heavily in upgrading
its network. The carrier participated in the 2008 spectrum auction, spending close to $6.6 billion
for securing spectrum blocks in the 700MHz band. In January 2013, AT&T bought another block of
700MHz spectrum from Verizon for $1.9 billion which was completed in September 2013. AT&T has
launched LTE services on its 700MHz band and it plans to expand its LTE coverage over the next few
years. By the end of the year, AT&T plans to cover 270 million POPs with LTE, up from 225 million
currently.
Verizon primarily had CDMA/EVDO-based legacy network, which is technologically more suitable
for data transmission than AT&Ts GSM network. With the launch of iPhone on AT&Ts network,
Verizon had some breathing space to sort out its network bottlenecks. In order to counter AT&Ts
iPhone offerings, Verizon launched its EVDO-based Motorola Droid. Further, to cater to the expected
increase in data demand, Verizon also launched a nationwide LTE network. Verizon also participated
in the 2008 700MHz spectrum auction, where it spent $9.3 billion. Currently, Verizons LTE network
serves 64% of its data traffic, which is driven by only 38% of its customer base. Verizon continues to
invest in increasing the bandwidth and reach of its LTE network, although it has a broader reach as
compared to AT&T.
T-Mobile had a GSM-based network operating in the 1900MHz band, which has relatively poor
propagation characteristics (as compared to 700, 800, 900MHz bands). This has resulted in poor
network quality for T-Mobile, which is reflected in its poor standing in the American Customer
Satisfaction Index. However, of late, T-Mobile has made substantial investment in modern HSPA
and LTE networks (in 1700MHz and 2100MHz band) to cater to the increased demand for data.
The carrier has also acquired MetroPCS, which operates CDMA, EVDO and LTE-based networks.
T-Mobile plans to gradually shut down MetroPCS CDMA/LTE network and transition its customers
to T-Mobiles network. However, the carrier plans to leverage MetroPCS Distributed Antenna
System (DAS), dense network assets, which should help in urban coverage and capacity. To tackle
the spectrum challenges, T-Mobile bought wireless spectrum from US Cellular Corp for $308 million
in June 2013, which allows the company to expand its 4G network across another 29 markets.
T-Mobile plans to cover at least 200 million POPs with LTE, up from 157 million currently.
Global Telecom
Sector Review
U.S. Market Average Spectrum Depth

250
200
Spectrum Depth (MHz)

150
100
50
0
Sprint Verizon AT&T T-Mobile
<1GHz >1GHz >1GHz from LEAP (AWS+PCS)
Source: Credit Suisse
Sprint offers its services on CDMA, EVDO and LTE platforms. Sprint had also rolled out a WiMAX
network in the 2.5GHz band, which is now Sprint offers its services on CDMA, EVDO and LTE
platforms. Sprint had also rolled out a WiMAX network in the 2.5GHz band, which is now being
migrated to the LTE network. In October 2010, the carrier announced the shutdown of its iDEN
network, which was implemented by June 2013. Sprint plans to leverage the freed 800MHz band
spectrum to expand its LTE network and expects to cover 200 million POPs with LTE by year-end.
Sprint may face capacity shortage on its LTE network over the coming months due to the growth in
customer base as well as its unlimited offerings.
Global Telecom
Sector Review
Top 200 Global M&A Deals in Telecom (2010 to 2014 YTD April)
Closed Trans. Revenue EBITDA Revenue EBITDA
Target/Issuer Buyers/Investors Major Business Focus [Target/Issuer]
Date Value [LTM] [LTM] Multiple Multiple
02/21/14 Verizon Wireless Verizon Communications 130,036.0 75,868.0 29,682.0 3.9x 9.9x Wireless voice and data services
07/10/13 Sprint Corporation SoftBank 37,296.8 35,438.0 5,305.0 1.1x 8.9x Wireless and wireline communications services
06/16/10 Carso Global Telecom America Movil 35,309.9 16,043.7 5,921.4 2.0x 5.4x Telecommunication services
02/28/12 Tele Norte Leste Participacoes Oi SA 31,508.8 17,809.5 6,614.4 1.3x 3.5x Integrated telecommunication services
Qwest Communications
04/01/11 CenturyLink 24,002.7 12,104.0 4,267.0 1.8x 5.2x Communications services
International
Mobile, fixed, Internet, and international
04/15/11 Wind Telecom VimpelCom 22,993.4 - - - -
communication services
02/27/12 Coari Participaes Oi SA 22,401.2 6,159.7 1,892.6 3.3x 10.7x Telecommunication products and services
06/09/11 Vivo Participacoes Telefonica Brasil 17,327.7 10,904.5 3,221.8 1.5x 5.0x Cellular telecommunications
China Telecommunications, CDMA
01/02/13 China Telecom 13,788.0 - - - - Wireless telecommunications services
Network
06/16/11 SFR Vivendi Socit Anonyme 11,272.6 17,833.4 5,633.5 1.4x 4.6x Telecommunication services
06/08/10 Bharti Airtel Africa B.V. Bharti Airtel 10,668.0 - - - - Telecommunication services
09/27/10 Brasilcel Telefnica 9,757.4 - - - - Telecommunication services
10/13/11 Skype Global Microsoft 9,324.9 859.8 192.9 10.7x 47.6x Communications services
07/01/10 New Communications Holdings Frontier Communications 8,469.5 - - - - Domestic wireless communication services
04/01/10 Orange Everything Everywhere 8,398.2 115.2 - 64.4x - Telecommunications and computer networks
09/10/10 China Mobile - 6,674.4 69,128.3 35,136.2 2.4x 4.8x Mobile telecommunications and related services
11/09/11 Polkomtel - 5,881.5 2,740.2 1,025.3 2.0x 5.5x Wireline and wireless telecommunication services
04/21/10 Kyivstar VimpelCom 5,602.3 1,444.2 791.0 3.8x 6.9x Cellular telecommunication network
06/10/10 Telmex Internacional America Movil 5,402.4 7,810.9 2,136.9 2.5x 8.9x Telecommunication services
04/27/10 Global Village Telecom Vivendi Socit Anonyme 4,920.8 892.8 318.2 5.0x 14.0x Telecommunications services
Wireless services under the Cricket brand name in
03/13/14 Leap Wireless International AT&T 4,913.9 3,051.4 466.6 1.3x 8.6x
the US
10/01/13 Global Tower American Tower 4,800.0 - - - - Antenna sites on towers and commercial real estate
Broadband Internet protocol (IP) communication
12/26/12 eAccess SoftBank 4,789.8 2,646.8 605.9 1.6x 7.2x
services
11/11/11 Telefonos de Mexico America Movil 4,634.5 8,040.5 3,192.6 2.3x 5.9x Fixed-line telecommunications services
The Egyptian Company for Mobile Mobile lines, scratch cards, mobile equipment, and
05/28/12 France Tlcom 4,499.3 1,701.3 535.9 2.7x 8.4x
Services mobile accessories
07/09/13 Clearwire Sprint 3,830.2 1,260.1 -402.5 9.5x - Provides 4G wireless broadband services
08/24/12 SpectrumCo Cellco Partnership 3,600.0 - - - - Wireless telecommunication bandwidth spectrum
07/30/12 VimpelCom Altimo 3,600.0 23,350.0 9,506.0 2.1x 5.3x Voice and data services
01/28/14 Telefnica Czech Republic PPF Group 3,481.5 - - 1.8x 4.6x Fixed and mobile, voice and data services
Telecommunications, and information and
06/26/12 Koninklijke KPN America Movil 3,446.2 17,309.9 6,010.8 1.8x 5.2x
communication technology services
07/01/11 Vodafone India Vodafone Group 3,320.0 - - - - Telecommunication services
10/28/10 Sunrise Communications CVC Capital Partners 3,269.0 - - - - Mobile telephony, fixed network, and Internet services
Fixed-line telephony services, internet and mobile
10/02/13 OAO Svyazinvest Rostelecom 3,029.3 - - - -
telephony services
10/04/11 Global Crossing Level 3 Communications 2,914.5 2,622.0 403.0 1.0x 6.6x Communications solutions
S telephone, telegraph, data transmission, and
04/01/11 Uralsvyazinform Rostelecom 2,896.7 1,341.5 533.4 2.0x 5.1x
wireless communication
01/13/11 Syniverse Holdings The Carlyle Group 2,721.5 618.6 223.5 4.2x 11.5x Wireless voice and data services
Mobile, fixed broadband & telephony and cable TV
04/04/13 Tele2 Russia Telecom VTB Bank 2,400.0 - - - -
services
Cellco Partnership, Certain Wireless
06/22/10 AT&T Mobility 2,372.0 - - - - Wireless voice and data services
Assets
11/30/11 PAETEC Holding Windstream 2,356.5 1,840.2 312.9 1.2x 7.2x Integrated broadband communications services
07/02/12 AboveNet Zayo Group 2,333.1 472.5 191.6 4.7x 11.6x High-bandwidth connectivity solutions
02/29/12 Orange Communications Apax Partners 2,130.6 1,384.9 - 1.5x 6.5x Mobile communications services
Critical communication infrastructure and services to
07/27/12 Cable & Wireless Worldwide Vodafone Europe 2,126.5 3,436.5 585.3 0.6x 3.3x
telecommunications users
Broadband satellite services, products, and managed
06/08/11 Hughes Communications EchoStar Satellite Services 2,124.2 1,043.3 209.0 1.9x 9.3x
network solutions
01/01/10 LG Powercom LG Uplus Corp 2,106.4 1,205.0 319.5 1.6x 6.2x Communications network services
04/01/11 Volgatelecom Rostelecom 2,094.0 1,087.5 473.7 1.8x 4.2x Fixed line and mobile telecommunication
04/01/11 Sibirtelecom Rostelecom 2,090.1 1,262.6 480.8 1.6x 4.2x Fixed-line telephone and mobile telecommunications
QUALCOMM Incorporated,
12/27/11 AT&T 1,925.0 - - - - Spectrum Licenses
Spectrum Licenses
10/01/12 TowerCo II Holdings SBA Communications 1,850.3 145.7 61.0 12.7x 30.2x Communication towers
10/04/12 National Mobile Telecommunications Qatar Telecom 1,848.6 2,658.7 984.0 1.9x 5.1x Mobile telephone services
Bezeq The Israel Telecommunication
04/14/10 B Communication 1,764.8 3,357.2 1,284.60 1.9x 4.9x Telecommunication services
Corporation
Mobile 4G wireless broadband internet access
10/02/13 Scartel MegaFon 1,746.0 - - - -
services
01/03/13 Orange Austria Telecommunication Hutchison 3G Austria 1,712.2 - - - - Mobile telecommunications network services
05/11/11 Ukrtelecom ESU 1,710.8 866.8 138.3 2.1x 12.9x Telecommunication services
04/01/11 COMSTAR - United TeleSystems Mobile Telesystems 1,649.0 1,557.5 645.2 5.6x 13.5x Integrated telecommunication solutions
04/11/14 Vodafone India Vodafone International Holdings 1,640.8 - - - - Cellular telecommunication services in India
04/24/12 MegaFon AF Telecom Holding 1,610.0 8,521.7 3,487.9 1.6x 3.8x Integrated telecommunications services
01/18/12 Rostelecom - 1,607.4 2,395.0 538.5 11.4x 50.7x Integrated telecom solutions
04/01/11 North-West Telecom Rostelecom 1,549.5 918.8 409.0 1.7x 3.9x Telephony, telegraph, and data transmission
03/29/10 LightSquared Harbinger Capital Partners 1,533.5 34.5 (86.5) 43.4x - Broadband wireless communications
02/02/12 Kcell TeliaSonera 1,519.0 - - - - Cellular operator
02/04/13 Asia-Cell Telecommunication Ooredoo Q.S.C 1,470.0 - - 3.0x 10.5x Mobile telecommunications services
04/24/12 Telecominvest AF Telecom Holding 1,454.9 - - - - Voice telephony and data transmission services
Global Telecom
Sector Review

GSM digital wireless services in the Dominican
04/09/14 Orange Dominicana Altice VII Sarl 1,435.0 581.0 - 2.5x -
Republic
Mobile network and fixed communications network
07/30/13 Optimus SGPS Zon Optimus SGPS 1,419.7 - - - -
services
03/09/12 DBSD North America Dish Network 1,400.0 - - - - Integrated satellite and terrestrial mobile services
01/31/11 Intel Mobile Communications Intel 1,400.0 1,314.3 - 1.1x - Cellular platforms for global phone makers
China United Network GSM and WCDMA cellular, and related
07/30/12 China Unicom (Hong Kong) 1,387.1 36,095.2 10,604.4 1.2x 4.2x
Communications Group telecommunications services
03/09/12 Terrestar Networks Dish Network 1,382.0 - - - - tellite terrestrial mobile broadband network services
02/16/10 HanseNet Telekommunikation Telefonica Deutschland 1,334.0 1,763.9 - 0.8x 3.7x Regional telecommunication services provider
01/04/11 Orascom Telecom Tunisia National Mobile Telecommunications 1,200.0 - - - 6.7x Wireless telecommunication services
Companhia de Telecomunicacoes
06/20/13 CITIC Telecom International Holdings 1,161.0 616.5 170.0 2.3x 8.2x Mobile, fixed-line and broadband services
de Macau
06/01/10 Windstream Iowa Communications Windstream 1,139.6 253.4 123.1 4.5x 9.2x Wireline local exchange telecommunications
02/26/14 T-Mobile Czech Republic Deutsche Telekom 1,129.7 1,364.4 - 2.1x - Mobile communications services
Telecommunications and information technology
08/02/11 Versatel Kohlberg Kravis Roberts & Co 1,116.4 1,006.4 221.9 0.9x 4.2x
services
Rostelecom; Uralsvyazinform; North-
02/04/11 OJSC National Telecommunications 1,060.6 - - - - Digital television and broadband services
West Telecom
03/18/11 Vivo Participacoes SP Telecomunicaes Participaes 1,033.7 10,904.5 3,221.8 1.0x 3.2x Cellular telecommunications
12/15/11 Global Tel*Link American Securities 1,000.0 - - - - Provides communications solutions
12/19/11 Vizada SAS Astrium 960.0 - - - - Mobile satellite services
Cosmo Bulgaria Mobile EAD and Mobile, mobile broadband and hybrid fixed telephony
07/31/13 Telenor 934.0 - - 1.9x 5.3x
GERMANOS Telecom Bulgaria SA services
11/02/12 Space Systems/Loral Macdonald Dettwiler & Associates 875.0 1,100.0 - 0.8x - Satellites and satellite systems
03/19/14 PT AXIS Telekom Indonesia PT XL Axiata 865.0 - - - - Prepaid and postpaid GSM services
04/01/11 OJSC Far East Telecommunications Rostelecom 852.4 570.9 201.0 1.4x 4.1x Communication services
Mobile services, such mesging, roaming, and other
12/02/10 MediTelecom France Tlcom 840.0 623.1 - 4.3x -
practical services
12/26/10 Telmex Colombia Comunicacion Celular 820.8 - - - - Telecommunications services
Television, broadband internet, telephony, music
03/28/13 Ziggo Liberty Global 811.2 2,006.0 1,103.8 5.2x 9.5x
streaming and electronic payment system services
09/20/13 Allied Wireless Communications AT&T Mobility 780.0 - - 1.7x 7.9x Retail wireless operations
12/02/10 Q-Comm Windstream 779.5 - - - - Telecommunications services
Redundant and low-latency submarine fiber-optic
08/13/13 Brasil Telecom Cabos Submarinos BTG Pactual Gestora de Recursos 775.5 - - - -
network
Corporate Commercial Bank; CJSC
11/12/12 Bulgarian Telecommunication 766.1 585.3 136.8 1.2x 4.9x National fixed and mobile network and data system
VTB Capital
Macquarie Infrastructure and Real Distribution and broadcasting of television (TV) and
01/14/11 Ceske Radiokomunikace 762.0 - - - -
Assets (Europe) radio signals
06/02/10 CJSC Synterra MegaFon 745.0 - - - - Telecommunication services
Real-time voice and data communications services
07/26/12 HUGHES Telematics Verizon Enterprise Solutions Group 737.4 77.4 (44.7) 9.2x -
and applications for use in vehicles
02/08/10 NuVox Windstream 721.8 564.8 98.1 1.1x 6.6x Telecommunication services
04/04/12 VimpelCom Ltd Telenor 715.0 23,141.0 9,271.0 2.2x 5.4x Voice and data services
Empresa de Telecomunicaciones
01/31/11 Rafin 706.0 - - - - Telecommunications services in Cuba
de Cuba
02/08/11 Inmarsat - 693.1 1,171.6 688.1 5.2x 8.9x Mobile tellite communications services
01/10/13 Shin Corporation Thai NVDR Co 689.7 276.0 110.4 24.9x 11.9x Telecommunications, media, and advertising
10/31/11 TIM Fiber SP TIM Celular 686.2 - - - - Telecommunications services
10/31/12 TelstraClear Vodafone New Zealand 663.3 542.6 121.2 1.0x 4.4x Telecommunications and information services
08/18/11 Vodafone India Piramal Enterprises 630.8 - - - - Telecommunication services
IMI Investments SA; Fondi Italiani per
06/30/11 Metroweb 626.8 74.0 - 8.5x - Fiber optic network
le Infrastrutture SGR
02/08/12 Vodafone India Piramal Enterprises 618.0 - - - - Telecommunication services
04/01/11 Southern Telecommunications Rostelecom 612.2 737.6 314.3 0.8x 1.8x Fixed-line telecommunications services
08/16/10 New Century InfoComm Tech Yuan Cing Infocomm Tech 603.2 268.5 - 3.3x - Fixed-line broadband network
12/31/13 DukeNet Communications Time Warner Cable 600.0 - - - - Fiber network solutions
04/01/11 Central Telecommunication Rostelecom 591.2 1,238.5 552.4 0.4x 1.0x Telecommunication provider
12/08/10 ITC^DeltaCom EarthLink 573.2 445.3 84.8 1.1x 5.8x Integrated communication services
Hellenic Telecommunications
07/11/11 Deutsche Telekom 572.4 7,525.4 2,584.7 1.7x 4.8x Telecommunications and related services
Organization
Consolidated Communications
07/02/12 SureWest Communications 564.6 248.1 86.0 2.3x 6.5x F telecommunications services
Holdings
04/11/11 Telmex Internacional America Movil 555.4 7,142.2 2,099.6 2.7x 9.3x Telecommunications services
Hutchison Telecommunications
05/24/10 Hutchison Whampoa 542.4 239.3 (246.4) 3.5x - Mobile and fixed-line telecommunications
International
Network of tellite earth stations and digital
07/30/10 Harris CapRock Communications Harris Corporation 540.2 359.0 54.0 1.4x 9.6x
interconnecting systems
12/14/10 PT Sarana Menara Nusantara - 528.6 146.5 107.8 12.9x 17.5x Ownership, operation, and leasing of tower sites
Mobile, fixed telephony and mobile broadband
01/03/13 YESSS! Telecommunikation Telekom Austria 513.7 - - - -
telecommunications solutions and services
12/01/10 Fibertech Networks Court Square Capital Partners 500.0 - - - - Fiber optic networks
05/27/12 MobiNil Telecommunication Orange 490.1 - - - - Wireless telecommunication services
05/17/13 U.S. Cellular Sprint Spectrum; SprintCom 480.0 - - 1.0x - Mobile voice and data services
03/06/12 OJSC National Telecommunications Rostelecom 465.8 - 53.8 4.8x 13.5x Digital television and broadband
03/17/10 Spice Communications Idea Cellular 465.5 260.5 65.2 3.2x 15.6x Telecommunication services
10/31/11 TeleCable de Asturias The Carlyle Group 465.3 165.6 - 3.3x 8.4x Cable broadcasting and telecommunication services
12/06/10 Cavalier Telephone PAETEC Holding 460.0 421.1 - 1.1x - Voice and data services
12/27/10 Sistema Telecom Group Mobile Telesystems 429.1 - - - - Wireless and fixed-line communications services
20% Stake In VTR Broadband (Chile)
03/14/14 VTR Finance 422.2 - - - - Broadband, cable TV and telephone services
And 20% Stake In VTR Wireless
Global Telecom
Sector Review

01/18/11 PT Smart Telecom PT Smartfren Telecom 420.2 - - - - Cellular telecommunications services
06/07/11 OJSC New Telephone VimpelCom 420.0 110.0 - 3.8x - Telecommunication services
01/04/11 Atria Networks Rogers Communications 417.8 - - - - Fibre-optic networks
03/03/11 012 Smile Telecom Partner Communications 416.0 - - - - Communication services
08/19/13 Nextel del Per Entel Inversiones 415.0 - - - - Mobile communications and wireless internet services
Managed telecom and related IT management
02/28/14 Telecom New Zealand Australia TPG Telecom 408.7 372.6 50.0 1.1x 8.2x
services
04/04/11 Schlumberger Information Solutions Harris CapRock Communications 384.6 - - - - Global Connectivity Services
04/01/11 One Communications EarthLink 370.0 644.1 - 0.6x 4.7x Telecommunication services
03/31/10 Pipe Networks TPG Telecom 365.9 54.2 23.9 6.3x 14.3x Telecommunications services
Philippine Long Distance Telephone
11/14/11 Metro Pacific Resources 335.7 3,226.3 1,907.2 4.2x 7.2x Telecommunication services
Company
11/27/12 MTN Nigeria Communications Shanduka Telecommunications 335.0 - - - - Digital global system
01/31/10 VTR Broadband (Chile) Corp Group Banking 333.0 - - - - Broadband, cable television, and telephone services
11/12/10 Fastweb Swisscom Italia 326.9 2,342.3 544.0 1.5x 6.6x Alternative broadband landline telecommunications
Cincinnati SMSA and Cincinnati
07/01/11 AT&T 320.0 - - - - Wireless communications services
SMSA Tower Holdings
01/31/10 012 Smile.Communications Merhav-Ampal Group 319.6 - - - - Broadband and traditional voice services
12/01/11 360networks (USA) Zayo Group 317.9 77.2 26.2 4.1x 12.1x Voice over Internet protocol and fiber-optic network
Advanced Wireless Services
08/31/12 Cellco Partnership 315.0 - - - - Wireless services (AWS) spectrum licenses
Spectrum Licenses
07/01/13 United States Cellular T-Mobile US 308.0 - - - - Mobile voice and data services
02/20/12 Ventelo Holding EQT Partners AB 303.1 505.2 - 0.6x - Data and telecoms solutions
Mobile, integrated fixed/mobile and broadband
04/30/13 Telefnica UK British Sky Broadcasting Group 300.4 - - - -
services
12/16/11 Telefonia DIALOG Netia Spolka Akcyjna 291.7 - - - - Telecommunications services
07/26/12 CJSC Sky Link OAO MobiTel 291.0 - - - - CDMA mobile-communications networks
Cable television, broadband Internet, and fixed and
09/16/11 Aster Sp. z o.o. UPC Polska Sp. z o.o. 287.4 - - - -
mobile telephony services
10/31/11 TIM Fiber RJ TIM Celular 285.9 - - - - Telecommunications infrastructure services
04/02/13 Hellas-Sat Arabsat Cyprus 278.7 - - 6.8x - Satellite communication services
08/01/13 Baja Broadband TDS Telecommunications 267.5 - - 3.1x - High speed internet, voice and data services
09/22/10 COMSTAR - United TeleSystems Mobile Telesystems 266.0 1,557.5 645.2 2.5x 6.1x Integrated telecommunication solutions
Integrated fixed telephony, mobile telephony, and
07/28/11 Groupe Outremer Telecom AXA Private Equity 264.8 267.5 69.2 1.4x 5.3x
internet access services
11/24/11 NTT DOCOMO 262.9 3,226.3 1,907.2 4.2x 7.2x Telecommunication services
Company
10/09/12 Tampnet EQT Partners 261.9 - - - - Offshore high capacity communication network
11/01/11 Telecommunications Management Time Warner Cable 259.0 - - - - Cable television services
12/31/11 HOT Mobile HOT Telecommunication Systems 258.8 - - - - Integrated wireless cellular communication
Advanced Info Service Public
12/23/11 Singapore Telecommunications 258.6 3,957.0 1,811.8 3.2x 7.1x Mobile telecommunication
Company
BesTV Network Television
12/06/11 Bestv New Media 249.4 - - - - IPTV solutions
Technology Development
06/19/12 vividwireless SingTel Optus Pty 247.5 - - - - Wireless broadband and Internet services
01/24/11 Invoice MBK Partners 244.2 1,057.0 48.6 0.2x 4.7x Rele of communications services
Oulu ICT Oy; Finda Oy; Osuuskunta
03/16/12 DNA Oy 241.6 969.2 - 1.2x - Voice call, data, mobile, and digital television services
KPY; PHP Liiketoiminta Oyj
AT&T, Inc., 5 Service Areas in
08/23/10 Cellco Partnership 240.0 - - - - Wireless telecom
Louisiana and Mississippi
04/03/13 DiGi.Com Time Dotcom 239.3 2,060.4 1,130.4 5.9x 10.9x Mobile communication services
HgCapital; HgCapital Trust; CPS
06/30/10 Manx Telecom 230.5 100.2 36.3 2.3x 6.4x Telecommunications and Internet services
Partners
02/02/10 OOO Coscom TeliaSonera Aktiebolag 220.0 - - - - Cellular communication systems
08/27/13 MTN Ghana American Tower 218.5 - - - - Wireless and broadcast communication services
Telephony, broadband/Internet, and multi-channel
11/12/10 R Cable Y Telecomunicaciones Galicia Desarrollos Empresariales Sena 216.1 - - - -
and thematic television solutions
10/07/10 ZAO Peterstar MegaFon 215.0 - - - - Telecommunications services
Telephony, broadband/Internet, and multi-channel
06/01/10 R Cable Y Telecomunicaciones Galicia CVC Capital Partners 213.6 284.1 126.2 2.2x 4.8x
and thematic television solutions
Telecommunications, broadband Internet and wireless
05/01/13 Dodo Australia Pty M2 Telecommunications Group 212.2 - - 1.2x 9.7x
broadband services
The Bahamas Telecommunications
04/06/11 Cable & Wireless Communications 210.0 361.0 101.0 1.1x 4.1x Telecommunications solutions
Company
01/21/10 JAJAH Telefnica Europe 207.7 - - - - Telephony solutions
09/23/10 MEASAT Global MEASAT Global Network Systems 207.3 84.3 59.9 8.0x 11.3x Regional satellite networks
08/28/12 Cellco Partnership Cricket License Company 204.0 - - - - Telecommunication spectrum
Nokia Corporation, Wireless Modem
11/30/10 Renesas Electronics Corporation 200.0 - - - - Wireless networking, mobile services
Business
Verizon Wireless Inc., Certain
04/26/10 Allied Wireless Communications 200.0 564.9 - 0.4x - Wireless communications
Wireless Assets
01/14/11 Polska Telefonia Cyfrowa Sp.z o.o. Deutsche Telekom 199.9 - - - - Fixed line telephony & W-LAN Internet access services
06/01/12 Primus Telecom Holdings M2 Telecommunications Group 199.1 289.9 41.3 0.7x 4.8x Telecommunication services
Telecommunications and multi-media and information
08/19/13 Allied Technologies Allied Electronics Corporation 191.2 1,131.4 97.8 0.5x 5.9x
technology solutions
03/31/10 U Mobile Sdn Singapore Technologies Telemedia 188.2 - - - - 3G mobile communication
08/28/12 Cricket License Company Cellco Partnership 188.0 - - - - PCS and AWS spectrum licenses
10/01/10 American Fiber Systems Zayo Group 187.9 30.3 10.6 6.1x 17.4x Metropolitan fiber optical networking infrastructure
03/23/12 M5 Networks ShoreTel 186.6 48.2 (0.2) 3.8x - Voice and data communications
Internet access, cable TV and radio broadcasting,
10/24/11 Teleradiokompaniya TVT Mobile Telesystems 180.0 - - - -
telematic, and Web hosting services
Global Telecom
Sector Review

Companhia de Telecomunicacoes
05/05/10 CITIC Telecom International Holdings 178.2 - - - - Telecommunications services
de Macau
12/20/12 Vivo S.A SBA Communications 176.8 - - - - Wireless towers
06/29/12 MTN Uganda American Tower; MTN Group 175.0 - - - - Telecommunication services
08/28/12 Savary Island Wireless Cellco Partnership 172.0 - - - - AWS Spectrum licenses
Great Wall Broadband Network Chengdu Dr. Peng Telecom & Media
12/22/11 171.1 - - - - Broadband telecommunication
Service Group
Narodowy Fundusz Inwestycyjny
12/09/11 Aero 2 Sp. z o.o. 171.0 - - - - Wireless telecommunications and internet services
Midas Spolka Akcyjna
08/01/11 BelCompany Vodafone Libertel 170.4 257.5 - 0.7x - Mobile telecom products and services
01/15/13 Alem Communications Holding TeliaSonera Aktiebolag 170.0 - - - - WiMax network
04/30/11 Universal Utilities Vitruvian Partners 166.9 84.3 - 2.0x - Telecommunications services
10/15/10 Knology of Kansas Knology 165.3 49.1 19.5 3.4x 8.5x Broadband communications services
12/01/10 Mountaineer Telecommunications nTelos 163.0 76.0 25.0 2.1x 6.5x Integrated communications provider
12/06/10 TeliaSonera Asia Holding TeliaSonera Aktiebolag 161.1 - - - - Mobile communication services
06/03/10 Teleset Networks Volgatelecom 161.1 30.9 18.3 4.4x 7.5x Telecommunication services
04/28/11 Ship Equip Inmarsat Solutions 160.9 56.0 - 2.9x - Bandwidth broadband solutions
09/12/13 TowerCom AMP Capital Investors (UK) 160.1 - - - - Tower operator
12/31/11 PT Bakrie Telecom - 159.9 285.6 126.6 5.9x 13.3x Fixed digital radio cellular telecommunication
12/24/12 MegaFon - 155.5 8,539.6 3,561.5 2.0x 4.7x Integrated telecommunications services
Global Telecom
Sector Review
Top 100 US M&A Deals in Telecom (2010 to 2014 YTD April)

02/21/14 Verizon Wireless Verizon Communications 130,036.0 75,868.0 29,682.0 3.9x 9.9x Wireless voice and data services
07/10/13 Sprint Corporation SoftBank 37,296.8 35,438.0 5,305.0 1.1x 8.9x Wireless and wireline communications services
Qwest Communications
04/01/11 CenturyLink 24,002.7 12,104.0 4,267.0 1.8x 5.2x Communications services
International
07/01/10 New Communications Holdings Frontier Communications 8,469.5 - - - - Domestic wireless communication services
Wireless services under the Cricket brand name in
03/13/14 Leap Wireless International AT&T 4,913.9 3,051.4 466.6 1.3x 8.6x
the US
Operation of antenna sites on towers and commercial
10/01/13 Global Tower American Tower 4,800.0 - - - -
real estate
07/09/13 Clearwire Sprint 3,830.2 1,260.1 -402.5 9.5x - 4G wireless broadband services
08/24/12 SpectrumCo Cellco Partnership 3,600.0 - - - - Wireless telecommunication bandwidth spectrum
01/13/11 Syniverse Holdings The Carlyle Group 2,721.5 618.6 223.5 4.2x 11.5x Wireless voice and data services
Cellco Partnership, Certain Wireless
06/22/10 AT&T Mobility 2,372.0 - - - - Wireless voice and data services
Assets
11/30/11 PAETEC Holding Windstream 2,356.5 1,840.2 312.9 1.2x 7.2x Integrated broadband communications services
07/02/12 AboveNet Zayo Group 2,333.1 472.5 191.6 4.7x 11.6x High-bandwidth connectivity solutions
Broadband satellite services, products, and managed
06/08/11 Hughes Communications EchoStar Satellite Services 2,124.2 1,043.3 209.0 1.9x 9.3x
network solutions
QUALCOMM Incorporated,
12/27/11 AT&T 1,925.0 - - - - Spectrum Licenses
Spectrum Licenses
10/01/12 TowerCo II Holdings SBA Communications 1,850.3 145.7 61.0 12.7x 30.2x Communication towers
03/29/10 LightSquared Harbinger Capital Partners 1,533.5 34.5 (86.5) 43.4x - Broadband wireless communications
03/09/12 DBSD North America Dish Network 1,400.0 - - - - Integrated satellite and terrestrial mobile services
03/09/12 Terrestar Networks Dish Network 1,382.0 - - - - tellite terrestrial mobile broadband network services
06/01/10 Windstream Iowa Communications Windstream 1,139.6 253.4 123.1 4.5x 9.2x Wireline local exchange telecommunications
12/15/11 Global Tel*Link American Securities 1,000.0 - - - - Provides communications solutions
11/02/12 Space Systems/Loral Macdonald Dettwiler & Associates 875.0 1,100.0 - 0.8x - Satellites and satellite systems
09/20/13 Allied Wireless Communications AT&T Mobility 780.0 - - 1.7x 7.9x Retail wireless services
12/02/10 Q-Comm Windstream 779.5 - - - - Telecommunications services
Real-time voice and data communications services
07/26/12 HUGHES Telematics Verizon Enterprise Solutions Group 737.4 77.4 (44.7) 9.2x -
and applications for use in vehicles
12/31/13 DukeNet Communications Time Warner Cable 600.0 - - - - Fiber network solutions
02/08/10 NuVox Windstream 721.8 564.8 98.1 1.1x 6.6x Telecommunication services
12/08/10 ITC^DeltaCom EarthLink 573.2 445.3 84.8 1.1x 5.8x Integrated communication services
Consolidated Communications
07/02/12 SureWest Communications 564.6 248.1 86.0 2.3x 6.5x F telecommunications services
Holdings
Network of tellite earth stations and digital
07/30/10 Harris CapRock Communications Harris Corporation 540.2 359.0 54.0 1.4x 9.6x
interconnecting systems
12/01/10 Fibertech Networks Court Square Capital Partners 500.0 - - - - Fiber optic networks
05/17/13 U.S. Cellular Sprint Spectrum; SprintCom 480.0 - - 1.0x - Spectrum for mobile voice and data services
12/06/10 Cavalier Telephone PAETEC Holding 460.0 421.1 - 1.1x - Voice and data services
01/04/11 Atria Networks Rogers Communications 417.8 - - - - Fibre-optic networks
04/04/11 Schlumberger Information Solutions Harris CapRock Communications 384.6 - - - - Global Connectivity Services
04/01/11 One Communications EarthLink 370.0 644.1 - 0.6x 4.7x Telecommunication services
Cincinnati SMSA and Cincinnati
SMSA Tower Holdings
12/01/11 360networks (USA) Zayo Group 317.9 77.2 26.2 4.1x 12.1x Voice over Internet protocol and fiber-optic network
Advanced Wireless Services
08/31/12 Cellco Partnership 315.0 - - - - Wireless services (AWS) spectrum licenses
Spectrum Licenses
07/01/13 United States Cellular T-Mobile US 308.0 - - - - Advanced wireless services spectrum
08/01/13 Baja Broadband TDS Telecommunications 267.5 - - 3.1x - High-speed internet, voice and data services
11/01/11 Telecommunications Management Time Warner Cable 259.0 - - - - Cable television services
AT&T, Inc., 5 Service Areas in
08/23/10 Cellco Partnership 240.0 - - - - Wireless telecom
Louisiana and Mississippi
08/28/12 Cellco Partnership Cricket License Company 204.0 - - - - Telecommunication spectrum
Verizon Wireless Inc., Certain
04/26/10 Allied Wireless Communications 200.0 564.9 - 0.4x - Wireless communications
Wireless Assets
08/28/12 Cricket License Company Cellco Partnership 188.0 - - - - PCS and AWS spectrum licenses
10/01/10 American Fiber Systems Zayo Group 187.9 30.3 10.6 6.1x 17.4x Metropolitan fiber optical networking infrastructure
03/23/12 M5 Networks ShoreTel 186.6 48.2 (0.2) 3.8x - Voice and data communications
08/28/12 Savary Island Wireless Cellco Partnership 172.0 - - - - AWS Spectrum licenses
10/15/10 Knology of Kansas Knology 165.3 49.1 19.5 3.4x 8.5x Broadband communications services
12/01/10 Mountaineer Telecommunications nTelos 163.0 76.0 25.0 2.1x 6.5x Integrated communications provider
Cable TV, digital cable, and high-speed Internet
07/30/10 JetBroadBand Shentel Cable 147.2 - - - -
services
12/21/10 DukeNet Communications Alinda Capital Partners 137.0 - - - - Data, voice, and video fibre network provider
Cloud-based private branch exchange and voice over
11/18/13 Vocalocity Inc Vonage Holdings Corporation 129.5 - - - -
Internet protocol solutions
North American Retail
07/31/13 York Capital Management 126.0 - - - - Voice, broadband And wireless services
Telecommunications Operations
01/29/10 Oakville Hydro Communications Rogers Communications 121.9 - - - - Fiber-based bandwidth services
08/31/12 FiberGate Zayo Group 121.2 15.1 10.9 7.9x 10.9x Dark fiber services
06/03/11 Smoothstone IP Communications West Corporation 120.7 - - - - IP communications provider
06/19/12 Simple Mobile TracFone Wireless 118.0 - - - - Mobile virtual network operator
Contract installation services, voice, data and video
08/30/13 Multiband Corporation Goodman Networks 114.2 313.1 13.9 0.4x 11.4x
services
Fiber network, wireless, fiber collocation, private
12/17/12 First Telecom Services Zayo Group 110.0 - - - -
network and infrastructure services
01/12/10 Segovia Inmarsat Plc 110.0 - - 1.6x - Satellite communication solutions
Global Telecom
Sector Review

Messaging services including fax and notification
10/21/10 Xpedite Systems EasyLink Services International 105.0 157.5 33.3 - -
services
10/31/12 Clearwire Sprint Nextel 100.0 1,260.1 -402.5 4.9x - 4G wireless broadband services
07/22/13 ACS Wireless, Inc., Wireless Assets GCI Wireless Holdings 100.0 - - - - Spectrum licenses, cell sites and switching systems
Hewlett-Packard Company, Visual
07/27/11 Polycom 89.0 - - - - Video conferencing solutions
Collaboration Business
03/23/12 HyperCube West Corporation 77.9 - - - - Local and national tandem services
Craig Wireless Systems Ltd.,
05/06/10 Inukshuk Wireless 77.8 - - - - Telecommunication services
Canadian Spectrum Assets
07/01/10 Zayo Fiber Solutions Zayo Group 73.7 25.2 14.0 3.9x - Dark fiber related bandwidth infrastructure services
04/07/11 Jingle Networks Marchex 68.0 19.4 -1.6 3.4x - Directory assistance services
12/22/10 Sidera Networks of Long Island Sidera Networks 58.0 - - - - Networking and communications solutions
02/28/11 Arbinet Primus Telecommunications Group 55.6 336.4 -8.5 0.1x - Voice over Internet Protocol solutions
03/04/13 Wireless Matrix USA CalAmp 52.9 - - - - Wireless data solutions and mobile satellite services
Neutral Tandem, Inc., Global Data
04/30/13 Global Telecom & Technology 52.5 - - 0.8x - IP Transit and Ethernet services
Services
08/30/13 Telanetix Intermedia.net 51.8 33.9 3.3 1.5x 14.9x Cloud-based Internet protocol (IP) voice services
01/10/13 Black Rock Cable Wave Broadband 47.0 - - - - Bandwidth and networking services
01/03/14 Globe Wireless Inmarsat 45.0 91.0 - 0.5x - Communications solutions to the maritime industry
10/02/13 FiberLink Zayo Group 43.0 - - - - Fiber optic transmission assets
01/04/13 Iowa Wireless Services, 119 Towers TowerCo 45.5 - - - - Wireless cell phone towers
12/31/11 Conference Plus Arkadin 40.3 - - 1.0x - Web conferencing and online meetings solutions
Cypress Communications and
12/31/13 Network Billing Systems 32.1 30.9 - 1.0x - Hosted and managed communications solutions
BroadvoxGo!
02/08/13 VIVARO Corporation Angel Americas 30.5 - - - - Telecommunications and financial services
08/31/12 Pegasus Guard Band BPC Spectrum 30.0 - - - - Broadband communication services
Cobridge Communications, Certain
06/15/11 Cable and Broadband Operations in Knology 30.0 - - 2.0x 5.5x Cable and broadband services
Georgia and Alabama
Fremont Telcom Co. and Fretel
01/31/13 Blackfoot Telecommunications Group 30.0 - - 3.8x 6.0x Calling cards, voice mail and custom calling services
Communications
05/17/11 Global Capacity Holdco Pivotal Global Capacity 28.6 - - - - Telecommunications network logistics services
03/01/12 IdeaOne Telecom Group Hickory Tech 28.0 - - 2.5x 6.9x Telecommunications services
10/29/10 Genesis Networks Global Crossing 27.0 - - - - Video transmission services
Hosted voice over Internet protocol and telephone
03/02/11 Saturn Telecommunication Services ITC^DeltaCom; Deltacom 25.9 - - - -
services
Rogers Communications Partnership;
07/09/10 Cityfone Telecommunications 25.1 - - - - Cellular services
Fido Solutions
10/01/12 USCarrier Telecom Zayo Group 23.7 - - - - Light-speed wholesale telecommunications services
North State Telephone Company,
Wireless Operation
08/15/13 US Metropolitan Telecom Summit Vista 23.3 - - - - Communications services
09/27/13 Lightyear Network Solutions Birch Communications 22.0 - - - - Telecommunications services
08/18/11 XO Holdings ACF Industries Holding 21.0 1,541.1 197.0 0.8x 6.0x Telecommunications services
03/30/10 LCW Wireless Cricket Communications 21.0 - - - - Wirelesss telecommunication services
09/28/12 Wave2Wave Communications, Inc. SignalShare 20.0 71.4 -18.5 - - High-speed wired and wireless broadband services
Network Billing Systems and Fusion Telecommunications
10/29/12 19.6 - - 0.7x - Voice, data and Internet services
Interconnect Systems Group II International
10/01/12 Affinity VideoNet Glowpoint 19.0 10.7 1.2 1.6x 10.9x Video conferencing services
05/01/12 Arialink Broadband Zayo Group 18.0 - - - - Fiber optic Internet services
12/02/13 Spacenet SageNet 16.0 0.2x 8.0x Wireline and wireless broadband network solutions
Global Telecom
Sector Review
Valuation Trends
Stock Performance
Relative Performance of Stock Market Indices (%), 01/01/2009 - 04/23/2014
200 Trend 3
Trend 2
150
Trend 1
100
50
-50
Jan- 14
Apr- 14
Oct- 12
Jan- 13
Apr- 13
Jul- 13
Oct- 13
Jan- 11
Apr- 11
Jul- 11
Oct- 11
Jan- 12
Apr- 12
Jul- 12
Jan- 10
Jul- 10
Oct- 10
Jan- 09
Apr- 09
Jul- 09
Oct- 09
Apr- 10
MSCI WORLD/TEL SVC S&P 500 NASDAQ S&P 500 TELECOM SERV IDX
Source: Bloomberg
The last four years have seen the telecom sector display its typically defensive characteristics
on multiple occasions. For instance, in Trend 1, the unstable global economic climate and the
prolonged uncertainty over the US debt ceiling issue (which prompted S&P to lower the credit
rating of the US by one notch to AA+) sent the S&P 500 Index and the NASDAQ Index down 13.4%
and 14.5%, respectively. Comparatively, the telecom sector was more resilient, with the S&P 500
Telecommunication Services Index down 8.1% and the MSCI World Telecommunication Services
Index down 8.5% during the same period. The resilience was despite the fact that two of the largest
Incumbent Local Exchange Carriers (ILECs) in the US, AT&T and Verizon, were both facing headwinds.
At AT&T, uncertainties surrounding its merger with T-Mobile, the purchase of Qualcomms 700 MHz
MediaFLO spectrum, and news of T-Mobiles falling subscriber levels pulled the stock prices down.
On the other hand, Verizon witnessed a strike of 45,000 workers in its wire-line division, following
a disagreement on the new labor contract. It should be noted that the performance of the S&P
500 Telecommunication Services Index is materially influenced by these two stocks, owing to their
dominant weights in the index.
In times of a market recovery, telecom stocks have gained lesser than the broader market, as can be
seen in Trend 2. During this period, improving economic indicators along with a favorable interest
rate policy in the US, and strong manufacturing data from China, drove the NASDAQ Index up by
27.8% and the S&P 500 Index by 22.5%. In comparison, gains in the telecom sector indices were
less pronounced: the S&P 500 Telecommunication Services Index gained 11.6%, while the MSCI
World Telecommunication Services Index gained 7.8%. A similar pattern was witnessed in the three
months ending February 2013.
The key takeaway from Trend 3 is the decline in the S&P 500 Telecommunication Services Index
(-8.5%), which is in contrary to the trends in the MSCI World Telecommunication Services Index
(+11.1%), as well as the S&P 500 Index (+18.8%) and the NASDAQ Index (+26.2%). What most
influenced stock prices during this period were uncertainties surrounding quantitative easing
(QE) in the US. Increasing likelihood of QE tapering in light of an improving economic scenario
boosted investor confidence in cyclical stocks, which affected defensive, high dividend-yield stocks
like Verizon and AT&T. The stock price declines were most prominent in the last week of May
2013, around mid-June 2013, mid-December 2013 and in January 2014 (when QE was actually
moderated). Among sector-specific factors, lower-than-expected quarterly results (in both Q1
and Q2 2013) and disappointing free cash flow guidance for 2014 by AT&T, as well as intensifying
competition from T-Mobile and Sprint (AT&Ts net subscriber additions missed expectations in Q4
2013) were responsible for the fall in the telecom index. Both T-Mobile and Sprint improved their
foothold in the telecom sector during this time. T-Mobile successfully completed the acquisition of
MetroPCS, with the combined entity commencing trading on the New York Stock Exchange in May
2013. Following this, Sprint posted two key developments in succession in July 2013: it completed
the acquisition of the remaining 50% stake in Clearwire, following which SoftBank completed the
acquisition of 78% stake in Sprint. Both deals were crucial for Sprint, as it transformed the company
into a formidable competitor with strong financial muscle and higher deployable LTE spectrum than
AT&T and Verizon combined then. These events increased competitive pressures on incumbents
AT&T and Verizon, and drove the fall in the S&P 500 Telecommunication Services Index.
Global Telecom
Sector Review
Events such as AT&Ts cut of monthly fee from $40 to $15 (which sent all telecom stocks down) on
its 10GB data plan in February 2014 further testify the cut-throat competition that continues to hurt
the profitability of US telecom companies
Multiples Snapshot
52Week CY 2013 2013-14 growth Net EV/Rev EV/EBITDA
Name Price MCap EV Debt-to-
High Low Revenue EBITDA Revenue EBITDA EBITDA LTM 2014E LTM 2014
US
AT&T 34.92 37.97 31.74 181,409 258,137 128,660 41,364 3.5% 4.2% 1.62 2.0x 1.9x 5.5x 6.0x
Verizon
47.43 54.31 45.08 196,360 292,425 120,580 42,105 3.8% 6.3% 0.81 2.4x 2.3x 6.0x 6.5x
Communications
Sprint Corporation 8.37 8.85 8.35 32,943 58,485 35,362 5,308 0.0% 25.4% 4.67 1.6x 1.7x 10.7x 8.8x
Europe
Vodafone Group 3.60 7.41 3.53 95,241 136,790 - - n.a n.a 1.83 1.9x n.a 6.5x n.a
Telefnica 16.58 18.15 13.21 74,959 151,376 79,145 26,362 -6.7% -8.3% 2.56 1.9x 2.1x 5.8x 6.3x
Deutsche Telekom 15.97 17.85 11.60 70,459 141,880 82,649 23,726 1.6% 1.6% 2.94 1.7x 1.7x 7.0x 5.9x
VimpelCom 8.80 14.74 7.86 15,380 40,087 22,836 9,704 -6.0% -6.7% 2.53 1.8x 1.9x 4.2x 4.4x
Asia-Pac
China Mobile 9.00 11.51 8.21 181,853 113,644 102,100 41,535 3.4% -7.8% (1.71) 1.1x 1.1x 2.8x 3.0x
Nippon Telegraph
52.49 58.78 46.22 59,663 117,595 102,750 30,226 4.1% 2.5% 1.14 1.3x 1.1x 4.0x 3.8x
and Telephone
Bharti Airtel 5.54 6.11 4.49 22,148 32,819 13,586 4,360 11.7% 13.8% 2.17 2.3x 2.2x 7.2x 6.6x
Middle-East, Africa & Others

America Movil 0.98 1.18 0.93 68,489 102,822 60,287 19,694 0.6% -1.6% 1.73 1.7x 1.7x 5.3x 5.3x
MTN Group 20.37 20.76 15.08 37,330 38,078 13,162 5,686 9.5% 10.5% 0.05 2.9x 2.6x 7.1x 6.1x
Emirates Telecom 3.12 3.43 2.85 24,646 24,384 10,595 5,246 4.3% 1.7% (0.86) 2.3x 2.2x 7.7x 4.6x
Average 81,606 116,040 59,363 19,640 n.a n.a 1.50 1.9x n.a 6.1x n.a
Median 68,489 113,644 60,287 19,694 n.a n.a 1.73 1.9x n.a 6.0x n.a
Source: Capital IQ (stock price in $, others in $ millions), net debt-to-EBITDA based on LTM numbers; all estimates for calendar
year; all data as of 04/23/14
The data in the table above suggests that the market has dissimilar expectations from the US and
European telecom sector, despite both having similar characteristics (high penetration levels,
stagnant population growth, and lower ARPU due to competitive pressures). Considering the
volatile business environment in Europe, balance sheet strength is preferred to growth. In contrast,
better growth leads to higher valuations in the US.
In Europe, Vodafone enjoys a considerable valuation premium to its peers despite lower margins
(2014E EBITDA margin at 29.3% vs. peer average of 34.8%) and slower growth (than Deutsche
Telekom), which can be attributed to a lower debt obligation and a sturdier balance sheet. The
premium can also be explained by the fact that Vodafone derives a significant portion of its revenue
from high-growth markets like India, where its peers have little or no exposure. Compare this with
the US, where Sprint - despite its substantially high debt level - trades at a premium to the top
telecom companies, due to better EBITDA growth prospects in 2014, and possibly a higher LTE
spectrum portfolio. In a pressured pricing environment where earnings growth is hard to come
by, the premium valuations for Sprint (25% y/y EBITDA growth in 2014) are unsurprising. Investor
confidence has also improved materially after the SoftBank deal.
In emerging markets, the rationale behind a valuation premium or discount is similar to the US.
Based on 2014 multiples, Bharti Airtel and MTN Group both command premium valuations to
respective peers, due to their strong earnings growth and higher margins. In fact, Bharti Airtel trades
at a higher multiple as compared to players in both Asia and the Middle East, which is attributable to
the fact that India has much lower mobile penetration rate (58%) as compared to China (88%), Asia-
Pacific ex China and India (103%), Middle East (104%), and Africa (73%), underlining higher growth
potential of the market (Source: Ericsson Mobility Report, November 2013).
In the near term, we expect valuations of European telecom players to remain under pressure, given
the uncertain economic climate. Nonetheless, rising competition, stricter regulation, higher debt
and increasing need of capital should lead to gradual improvement in deal activity in the region. In
the US, the situation is comparatively optimistic, with the economy making more confident strides
on the growth path. In addition to this, since telecom players have healthy cash balances in their
Global Telecom
Sector Review
overseas businesses, we could see selective cross-border deals in the sector, in an effort to improve
geographic diversification and to avoid taxes on cash repatriation.
Within the telecom industry, integrated service providers have enjoyed better valuations than pure-
play wireless players in the recent past, as a result of their high dividend yields which have inflated
their valuations amid the ongoing macroeconomic concerns. However, with todays economic
backdrop having improved since 2012, we expect this scenario to change as increasing wireless
data consumption text, multimedia and the Internet amid rising penetration of innovative
hand-held devices is expected to propel the rise in wireless revenues. While the imminent rise in
investments for infrastructure development might pressurize short-term profitability of pure-play
wireless service providers, we believe that the long-term potential for these players remains bright
in the years to come
M&A Valuation Trends
The telecommunications industry in the US and Europe is characterized by competitive pricing
(impacting margins), high penetration rates (low organic growth prospects) and the need to invest
heavily in new & evolving technologies and networks to support the ongoing data growth. The
telecom industry in both these regions has witnessed significant M&A activity as service providers
look to increase their market share and achieve substantial cost-savings by consolidating their
network assets.
In 2013, for deals greater than $1 billion in size, the average revenue multiple jumping to 4.0x
revenue from 3.6x in 2012, while average EBITDA multiple declined to 9.2x compared to 11.1x
in 2012. However, the median valuations improved significantly, reaching 2.6x revenue and 8.9x
EBITDA from 1.9x and 5.9x, respectively in 2012. We think the improved median multiples reflect
operator focus on faster-growing markets and increased confidence amongst buyers regarding
potential synergies and growth prospects from the deals. For instance, Qatar Telecom (now
Ooredoo) increased its stake to about 60% in Iraqs mobile operator, Asiacell for $1.47 billion. The
high deal valuation at 10.5x EBITDA multiple reflected Ooredoos expansion into the potentially high
broadband and data growth Iraqi market, enabling it to further diversify away from its saturated
domestic market. The largest deal in 2013 was SoftBanks acquisition of a majority stake in Sprint at
8.9x EBITDA, higher than the overall median multiple for all the disclosed deals at 7.6x. We think the
high EBITDA multiple for Sprint reflects SoftBanks willingness to pay a premium for a foray in the US
(the worlds largest wireless market), which was showing signs of improving fundamentals through
mid-single digit revenue growth, rising prices and increasing margins. Additionally, SoftBank was
getting access to a strong spectrum portfolio, especially through the acquisition of Clearwire by
Sprint. In 2012, France Telecom picked up the remaining stake in its wireless venture, The Egyptian
Company for Mobile Services (Mobinil) at 2.7x revenue and 8.4x EBITDA, whereas the median
multiples for disclosed deals greater than $1 billion in size were 1.9x and 5.9x, respectively.
Similarly, for disclosed deals in 2013 which were lower than $1 billion in size, the average revenue
multiple was steady, although the average EBITDA multiple fell to 8.0x from 11.3x in 2012. Some
deals during the year were consummated at high valuations such as the acquisition of Telanetix,
a provider of cloud-based VoIP (Voice-over-internet-protocol) services by cloud services provider,
Intermedia. The deal valued at 14.9x EBITDA multiple, expanded Intermedias offerings and customer
base, further enhancing its position as a provider of cloud voice and hosted PBX services. However,
some major deals during the year such as the acquisition of Bulgarias second-largest carrier, Cosmo
Bulgaria Mobile by Norway-based Telenor for $934 million, were finalized at reasonable valuations.
The Telenor-Cosmo Bulgaria Mobile deal was the highest deal below $1 billion during the year and
provided Telenor with potential cross-border synergies and an entry in a new market at a valuation
of 5.3x EBITDA multiple.
We expect the deal activity in Europe, which has one of the highest mobile penetration rates in
the world according to GSMA, to gather steam. We believe the quest for better growth prospects,
improved profitability and better scale may catalyze the industry in the region into consolidation,
leading to fewer players in the coming years.
Global Telecom
Sector Review
Private Financing
Private Financings Overview (2009 to 2013)
# of Deals % of Total Total Capital Raised % of Total Average Deal Size
2013 79 14% 9,780 22% 150.5
2012 101 17% 3,568 8% 45.2
2011 128 22% 14,415 32% 137.3
2010 128 22% 9,765 22% 89.6
2009 147 25% 7,255 16% 59.5
Total 583 100% 44,782 100% 76.8
Source: Capital IQ (in $ millions except deal volumes and percentages)
Private financing activity witnessed a reversal in 2012 after the strong growth in 2011, with a decline
in transaction volumes (down 21.1% y/y to 101) as well as total capital raised (down 75.2% y/y to
$3.57 billion, the lowest during 2009-2013). This can be attributed to the then prevailing global
economic slowdown (which particularly affected Europe, and also impacted the emerging markets
such as China, India and Brazil), leading to lower capital availability from traditional as well as
alternative sources. In fact, the US witnessed one of the lowest levels of private capital flows in the
sector over the past 10 years. In addition, telecom companies seemed to be losing some of their
attractiveness, due to continued margin pressures from pricing regulations (MTR cuts) and growing
competition (declining ARPU), which negatively impacted their cash flows. Deals above $1 billion
disappeared (there were 3 in 2011), and the highest round of financing was raised in May by Italy-
based Telco S.p.A worth $741 million. Other sizeable deals included $472 million raised by Zayo
Group and $236 million raised by F2i Reti TLC, along with VelaTel Global Communications, Cell C,
Quattro Telecomunicaes, Tata Teleservices, Lianlian Pay, Xplornet Communications, PT Smartfren
Telecom and Trivon AG, all of whom raised more than $100 million each. Together, these 11 deals
accounted for nearly three-fourths of the total private capital infused into the sector in 2012.
2013 saw a stark rebound in activity, with the total capital raised up 1.7x and returning to 2010
levels. The key highlight was the return of high-value deals, which drove total capital raised upwards
and pushed up the average deal size to the highest value in the last five years. The revival could be
attributed to significant momentum in M&A activity, primarily in the US. In terms of deal volume,
activity was fairly distributed across Europe (29 deals), US/Canada (24 deals) and Asia Pacific
(22 deals). In terms of size, three deals, each valued above $1 billion and each from a different
geography, collectively comprised over 75% of the total financing raised during the year. Of these,
the highest round was raised by Sprint, worth $5 billion, as a part of its acquisition by Softbank
completed in July. The infusion was done with an intention to strengthen Sprints balance sheet
amid an intensifying battle among telecom players to retain/add subscribers. Emerging markets
were also active, with Indias Bharti Airtel raising $1.26 billion from the Endowment Arm of Qatar
Foundation in May. The company said that the funds would be used to fortify its capital structure
and support the implementation of its growth strategy. In another deal, Spanish player Telefnica
S.A. sold 90.1 million treasury shares to raise $1.25 billion in March. The move was in keeping with
its efforts to reduce the debt burden on its books. Among other major deals were the rounds raised
by Cell C ($355.7 million, to enhance balance sheet strength), Singapore Telecom International
($300 million), Broadband Media ($256.4 million) and Avantel ($250 million, to support the launch
of 4G services). Most of the remaining deals belonged primarily to the sub-$100 million category.
For 2014, activity has been largely muted so far, with $301.9 million being raised through 25 private
placement transactions, mainly comprising players in US/Canada and Europe. The largest round was
raised by Russia-based JSC Svyaztransneft, amounting to $138 million. Another major transaction
was the $75 million raised by Indonesian company PT Internux from Mitsui & Co. Global Investment,
to support network expansion and enhancement.
Looking ahead, capital requirements for telecom players are expected to remain high as companies
sharpen their focus on acquiring/retaining subscribers, which would entail higher spending on
customer retention as well as network expansion and technology upgrades. Fulfilling the funding
requirements from operations could prove to be difficult, given margin pressures due to a declining
ARPU, adverse regulations and rising expenses in a fiercely competitive environment. In addition,
high debt levels in the industry along with the need to maintain attractive dividend payouts could
further push up capital requirements. In terms of regions, Europe could continue to dominate
private placement activity, as bank lending is expected to remain conservative given high levels
of non-performing loans in an improving but fragile economy. In the US, a better economy could
result in a slightly more confident lending environment; however, the private placement market
Global Telecom
Sector Review
could remain active, as companies look to diversify their funding sources and access quicker means
of funding with longer maturities. One trend which is expected to be common across both regions
is sub-$100 million transactions dominating transaction volumes, as small-sized players continue
to prefer the private placement route for its agility as well as flexibility to raise smaller amounts of
capital.
In terms of deal activity, an inevitable push is expected by telecom companies for i) convergence,
wherein telecom players acquiring entities in technologically allied fields such as cable TV operators,
and ii) opportunities for further consolidation to fortify market presence. However, given the
possibility of limited capital availability around the globe, companies in the content and aggregation
space could favor partnerships to outright acquisitions, particularly as operators start challenging
over-the-top content providers. In addition, improvement in margins through specialization in one
subsector (i.e. telecom operators spinning-off cell towers) should also fuel deal activity throughout
the sector.
Global Telecom
Sector Review
Global Telecom Private Financings (2011 to 2014 YTD April)

Closed
Target/Issuer Amount Round of Financing Buyers/Investors Major Business Focus [Target/Issue]
Date
04/15/14 Knowlton Capital 0.5 - - Diversified Telecommunication Services
04/08/14 Vozelia Telecom - - IP Web Services Diversified Telecommunication Services
04/07/14 Urban Wimax 1.7 - Banco Santander - London Branch Diversified Telecommunication Services
04/04/14 Moko Social Media 7.4 - Emrose Wireless Telecommunication Services
04/01/14 DSCI Corp - - McCarthy Capital Diversified Telecommunication Services
Partech International; IDInvest Partners; Intel Capital;
03/28/14 SIGFOX Wireless 20.6 - Bpifrance Investissement; Elaia Partners; iXO Private Wireless Telecommunication Services
Equity
03/21/14 DSG Technology 16.3 - - Diversified Telecommunication Services
03/06/14 Goonhilly Earth Station 6.4 - Downing Corporate Finance, Investment Arm Diversified Telecommunication Services
02/24/14 Texas Energy Network - - General Communication Diversified Telecommunication Services
02/24/14 Tempo Telecom - - Birch Equity Partners Diversified Telecommunication Services
02/21/14 Knowlton Capital 0.0 - - Diversified Telecommunication Services
02/14/14 NewSat 1.9 - - Diversified Telecommunication Services
02/14/14 Open Cable Telecomunicaciones 0.4 - - Diversified Telecommunication Services
02/07/14 Orion Satellite Systems 5.3 - IPSTAR Australia Diversified Telecommunication Services
02/03/14 OOO Mango Telecom - - - Diversified Telecommunication Services
01/31/14 Focus Mobile 1.3 - IMI.VC; Altair Capital Management Telecommunication Services
01/30/14 JSC Svyaztransneft 138.0 - - Diversified Telecommunication Services
01/28/14 Quintillion Networks - - Futaris Diversified Telecommunication Services
United Insurance Company of America; Praesidian
01/24/14 Fusion Telecommunications International 45.8 - Diversified Telecommunication Services
Capital; Plexus Capital
01/23/14 Craig Wireless Systems 2.0 - - Diversified Telecommunication Services
01/20/14 Natterbox - - The Gores Group Diversified Telecommunication Services
01/17/14 MobME Wireless Solutions - - - Telecommunication Services
01/17/14 Sea Fibre Networks - - Aqua Ventures International Diversified Telecommunication Services
01/16/14 Call 2 World Comunicaciones Inteligentes 0.7 - - Telecommunication Services
01/10/14 PT Internux 75.0 - Mitsui & Co. Global Investment Diversified Telecommunication Services
12/31/13 MobME Wireless Solutions 2.6 - - Telecommunication Services
12/23/13 Cape Range 0.8 - - Diversified Telecommunication Services
12/19/13 iFusion 0.3 - Blumerang Investors Splka Akcyjna Diversified Telecommunication Services
NEL Fund Managers; Finance for Business North East
12/18/13 Activtelecom - - Diversified Telecommunication Services
Fund
12/12/13 OpenNet 22.3 - NetLink Trust Diversified Telecommunication Services
12/11/13 JSC Cheap Data Communications - - European Investment Fund; Practica Capital Telecommunication Services
International Finance Corporation; Corporacin
11/27/13 Avantel 250.0 - Andina de Fomento; Appaloosa Management; Telecommunication Services
Discovery Capital Management
11/27/13 Verbicom Splka Akcyjna 0.3 - - Diversified Telecommunication Services
11/18/13 Kubi Wireless - - Inveready Asset Management Diversified Telecommunication Services
11/10/13 Digiweb 15.6 - Morgan Stanley, Investment Arm Diversified Telecommunication Services
10/31/13 Moko Social Media 0.1 - - Telecommunication Services
10/28/13 APTowers - - Kohlberg Kravis Roberts Telecommunication Services
10/28/13 Xplornet Communications 141.7 - - Diversified Telecommunication Services
10/21/13 Telefnica Digital Holdings 6.6 - Telefnica Diversified Telecommunication Services
10/16/13 Scratch Wireless 5.0 - CommonAngels Telecommunication Services
10/07/13 InterMetro Communications 0.7 - - Diversified Telecommunication Services
Meritage Funds; Main Street Capital; WP Global
09/30/13 Access Media 3 6.0 - Diversified Telecommunication Services
Partners
09/26/13 InterMetro Communications Inc 0.4 - - Diversified Telecommunication Services
09/23/13 DNS:NET Internet Service 6.7 - Deutsche Beteiligungs Diversified Telecommunication Services
09/19/13 Stardust Communications 1.0 - Nissay Capital Telecommunication Services
09/11/13 Moko Social Media 0.4 - Emrose Telecommunication Services
08/28/13 Elephant Talk Communications 5.3 - Saffelberg Investments Diversified Telecommunication Services
08/28/13 Singapore Telecom International 300.0 - Singapore Telecommunications Diversified Telecommunication Services
08/23/13 Yatango Mobile Australia - 2 - Telecommunication Services
08/17/13 Elephant Talk Communications 2.7 - - Diversified Telecommunication Services
Valhalla Partners; CNF Investments ; CIT GAP Funds;
08/14/13 Speek 1.1 - Vanedge Capital.; 500 Startups; Fortify Ventures ; Diversified Telecommunication Services
Middleland Capital
08/11/13 Eurona Wireless Telecom 7.7 - - Diversified Telecommunication Services
07/31/13 Sanwire 0.3 - Magna Group Telecommunication Services
07/16/13 Cell C 355.7 - 3C Telecommunications Telecommunication Services
07/11/13 Agile Network Builders - - NCT Ventures Diversified Telecommunication Services
07/11/13 STS Media 5.0 - DCM; Mangrove Capital Partners Diversified Telecommunication Services
07/10/13 Sprint Corporation 5,000.0 - SoftBank Telecommunication Services
07/08/13 Elisa Oyj 16.5 - - Diversified Telecommunication Services
07/08/13 Freshtel Holdings 0.1 - - Diversified Telecommunication Services
07/05/13 Dominion Energy 1.2 - - Diversified Telecommunication Services
07/05/13 VIBO Telecom 110.8 - Compal Electronics; Kinpo Electronics Telecommunication Services
06/13/13 Eaton Towers 195.0 3 Capital International Telecommunication Services
EDF Ventures; Kennet Partners; VantagePoint Capital
06/10/13 IntelePeer 15.0 - Diversified Telecommunication Services
Partners; NorthCap Partners
Global Telecom
Sector Review
Closed
Date
Bessemer Venture Partners; Charles River Ventures;
06/05/13 Affirmed Networks 51.1 3 Matrix Partners; T-Venture Holding; Lightspeed Telecommunication Services
Venture Partners; Vodafone Ventures; KCK Group
06/03/13 Impact Telecom 22.5 - Main Street Capital Diversified Telecommunication Services
05/30/13 Tellybean 1.8 - Dreadnought Finance; Reaktor Polte Diversified Telecommunication Services
05/24/13 Bretagne Tlcom - 3 Amundi Private Equity Funds Diversified Telecommunication Services
05/24/13 Elephant Talk Communications 1.3 - - Diversified Telecommunication Services
ACT Venture Capital; QUALCOMM; Enterprise Ireland,
05/23/13 Cubic Telecom 5.2 - Telecommunication Services
Investment Arm
05/23/13 Hyperoptic 75.5 - Soros Fund Management Diversified Telecommunication Services
05/14/13 Bharti Airtel 1,239.7 - Qatar Foundation, Endowment Arm Telecommunication Services
05/14/13 Tion Telecom 5.6 - - Diversified Telecommunication Services
05/10/13 DewMobile 0.0 - InnoSpring Telecommunication Services
04/30/13 Lightower Fiber Networks - - GoldPoint Partners Diversified Telecommunication Services
inexio Informationstechnologie und
04/25/13 13.8 - Deutsche Beteiligungs Diversified Telecommunication Services
Telekommunikation
04/23/13 Inea - - Warburg Pincus Diversified Telecommunication Services
04/08/13 nfon - - Milestone Venture Capital Diversified Telecommunication Services
04/05/13 GINSMS 0.4 - - Telecommunication Services
03/31/13 ERF Wireless 1.7 - - Telecommunication Services
03/28/13 21Net 0.6 - Innovacom Gestion Diversified Telecommunication Services
03/28/13 GTT Communications 3.7 - - Diversified Telecommunication Services
03/26/13 Telefnica 1,249.9 - - Diversified Telecommunication Services
03/17/13 OVIVO Mobile Communications 0.2 - - Telecommunication Services
03/15/13 IP-Only Telecommunication 2.2 - - Diversified Telecommunication Services
03/12/13 Phone.com 1.0 - ff Venture Capital Diversified Telecommunication Services
03/06/13 Tawasul Telecom 16.0 - Gulf Investment Corporation Diversified Telecommunication Services
Naxicap Partners; Alto Invest; Citizen Capital
02/26/13 Bazile Telecom 3.3 3 Telecommunication Services
Partenaires
02/21/13 Broadband Media 256.4 - SK Telecom Telecommunication Services
02/21/13 Telewings Communications Services - - Telenor Telecommunication Services
02/19/13 Telecom Corporation of New Zealand 0.1 - - Diversified Telecommunication Services
Virgin Group; ePlanet Capital; Souter Investments;
02/18/13 Virgin Mobile Latin America 20.0 - Hermes Growth Partners; Himark Investments; Telecommunication Services
Archimedia
02/13/13 TEDEMIS 0.9 - OSEO Innovation Telecommunication Services
02/11/13 Multapplied Networks - - - Diversified Telecommunication Services
02/07/13 STS Media 4.3 - DCM; Mangrove Capital Partners Diversified Telecommunication Services
02/05/13 Essar Telecom Kenya 148.9 - Econet Wireless International Telecommunication Services
02/01/13 Syringa Networks - - Blackfoot Telecommunications Group Diversified Telecommunication Services
02/01/13 Truphone 118.1 - - Telecommunication Services
01/17/13 eAccess - - SoftBank Telecommunication Services
01/08/13 Telefnica Digital Holdings 1.9 - Telefnica Digital Venture Capital Diversified Telecommunication Services
01/07/13 ORBCOMM 45.0 - - Diversified Telecommunication Services
12/31/12 AnyMeeting - - - Diversified Telecommunication Services
12/31/12 I.T.N France 5.3 - Audacia Diversified Telecommunication Services
12/31/12 JSC TransTeleCom Company 35.0 - Open Joint Stock Company Russian Railways Diversified Telecommunication Services
Rural Technology and Business Incubator, Endowment
12/31/12 Mego Technologies 0.0 - Telecommunication Services
Arm
12/31/12 Starcomms 98.0 - Capcom Telecommunication Services
12/31/12 Virgin Mobile Colombia 14.0 - International Finance Corporation Telecommunication Services
12/28/12 My Net Fone 2.1 - - Diversified Telecommunication Services
12/24/12 F2i Reti TLC 263.6 - Fondo Strategico Italiano Diversified Telecommunication Services
12/24/12 OOO Svyazinvest 56.2 - - Diversified Telecommunication Services
12/21/12 Emerging Markets Communications - - ABRY Partners Diversified Telecommunication Services
12/21/12 Nsight 90.0 - Tailwind Capital Group Diversified Telecommunication Services
Przedsiebiorstwo Telekomunikacyjne
12/21/12 0.2 - ABS Investment Diversified Telecommunication Services
Telgam Splka Akcyjna
12/20/12 PT Platinum Teknologi 10.4 - PT Solusi Tunas Pratama Diversified Telecommunication Services
12/19/12 FTTH Communications - - Envision Capital Diversified Telecommunication Services
12/13/12 Tata Teleservices 145.9 - NTT DOCOMO Diversified Telecommunication Services
12/11/12 Nordic TeleCom 1.3 1 Open Ocean Capital Diversified Telecommunication Services
12/11/12 Speek 1.2 Seed CIT GAP Funds; 500 Startups Diversified Telecommunication Services
12/10/12 SIPARTECH Sarl 12.9 2 Ciclad; NJJ Capital Diversified Telecommunication Services
12/05/12 Majan Telecommunication - - Oman Brunei Investment Company Telecommunication Services
12/03/12 ZAO Regional Technical Centre - - RVC, Investment Arm; Branan Diversified Telecommunication Services
11/22/12 Gigaclear - - - Diversified Telecommunication Services
11/20/12 ICTC Group 1.8 - CIBL Diversified Telecommunication Services
11/14/12 My Net Fone 3.1 - - Diversified Telecommunication Services
11/13/12 Speek - - Militello Capital Diversified Telecommunication Services
Matrix Partners; T-Venture Holding; Lightspeed
11/12/12 Affirmed Networks 52.0 - Telecommunication Services
Venture Partners; Vodafone Ventures
10/31/12 alwaysON - - Foresight Group Diversified Telecommunication Services
10/24/12 Fusion Telecommunications International 6.0 - - Diversified Telecommunication Services
10/24/12 Pervasip 0.0 - - Diversified Telecommunication Services
Long-Distance and International Telecommunications
10/23/12 OAO Svyazinvest 54.7 - Diversified Telecommunication Services
Rostelecom
10/16/12 3.6 - - Telecommunication Services
Company
Global Telecom
Sector Review
Closed
Date
10/12/12 InterMetro Communications 0.3 - - Diversified Telecommunication Services
10/08/12 19.7 - California Public Employees' Retirement System Telecommunication Services
Company
10/08/12 Samba Communications 1.5 2 - Diversified Telecommunication Services
09/30/12 AnyMeeting - - Tech Coast Angels Diversified Telecommunication Services
09/30/12 Digiweb 18.4 - Quay Ventures Diversified Telecommunication Services
09/30/12 ERF Wireless 2.7 - - Telecommunication Services
09/27/12 ECS Telecom Co 0.7 - Shinhan Investment's Investment Arm Diversified Telecommunication Services
09/25/12 Moko Social Media 0.1 - Bergen Global Opportunity Fund Telecommunication Services
09/19/12 Emerald Atlantis - - Storage Engine Diversified Telecommunication Services
09/18/12 Satmos - - iXO Private Equity; Aquiti Gestion Diversified Telecommunication Services
09/11/12 Trivon 25.0 - International Finance Corporation Diversified Telecommunication Services
Partech International; Intel Capital; Elaia Partners; iXO
09/05/12 SIGFOX Wireless 12.6 2 Telecommunication Services
Private Equity
08/31/12 Quattro Telecomunicaes 150.0 - Soros Fund Management Diversified Telecommunication Services
08/21/12 Bluebell Telecom 0.0 - Octopus Investments; Octopus Apollo VCT Diversified Telecommunication Services
Austin Ventures; Southern Cross Venture Partners;
08/05/12 Nitero 3.1 - Telecommunication Services
TrailBlazer Capital
07/26/12 Frontier Communications 71.9 - Federal Communications Commission Diversified Telecommunication Services
07/26/12 Telehop Communications 0.7 - - Diversified Telecommunication Services
07/25/12 OpenNet - - SingTel Interactive Diversified Telecommunication Services
07/24/12 21Net 2.7 - Innovacom Gestion Diversified Telecommunication Services
07/20/12 Ironroad 1.0 - Kapitalkraft i Sverige; GustaviaDavegrdh Fonder Telecommunication Services
07/17/12 Sipp Industries 0.0 - - Telecommunication Services
07/10/12 STS Media 7.5 1 DCM; Mangrove Capital Partners Diversified Telecommunication Services
Battery Ventures; Centennial Ventures; Charlesbank
07/02/12 Zayo Group 472.0 - Diversified Telecommunication Services
Capital Partners; GTCR
06/30/12 Fusion Telecommunications International 1.9 - - Diversified Telecommunication Services
06/26/12 Daisy Group plc 0.1 - - Diversified Telecommunication Services
06/26/12 Tower Cloud 17.0 - Ballast Point Ventures; Florida First Partners Telecommunication Services
06/22/12 PT Bakrie Telecom 15.8 - PT Bakrie Global Ventura Telecommunication Services
06/20/12 GreatCall 7.0 - NXT Capital Venture Finance Telecommunication Services
06/18/12 Bazile Telecom 0.6 - - Telecommunication Services
06/13/12 Millenium Telecom Centrafrique - - XSML; Central Africa Investment; KingKuba Capital Diversified Telecommunication Services
06/07/12 Cell C 180.2 - 3C Telecommunications Telecommunication Services
06/07/12 OJSC Voentelecom 21.0 - - Diversified Telecommunication Services
05/31/12 Telco 741.1 - - Diversified Telecommunication Services
05/17/12 Single Digits 10.0 - Tudor Growth Equity Diversified Telecommunication Services
05/11/12 Texas Energy Network 20.0 - - Diversified Telecommunication Services
Octopus Investments; Octopus Ventures; Octopus
04/30/12 Mi-Pay - - Diversified Telecommunication Services
Titan Vct 1; Octopus Titan Vct 2; Octopus Titan VCT 3
04/30/12 Shenzhen Onetouch Technology 4.0 - Junsan Capital Telecommunication Services
04/26/12 Africa's Talking 0.0 Seed Hub Ventures Telecommunication Services
04/19/12 NEXTIVA - - - Diversified Telecommunication Services
Bessemer Venture Partners; Canaan Partners; Norwest
04/17/12 Skybox Imaging 60.0 3 Diversified Telecommunication Services
Venture Partners; Khosla Ventures
04/10/12 ImOn Communications - - The Gazette Company Diversified Telecommunication Services
04/09/12 Insprit 1.8 - - Telecommunication Services
03/31/12 Empresa Hondurena de Telecomunicaciones 10.0 - Laticom International Diversified Telecommunication Services
03/31/12 Shenzhen Onetouch Technology - - Shenzhen Capital Group Telecommunication Services
Virgin Group; ePlanet Capital; Souter Investments;
03/29/12 Virgin Mobile Latin America 26.5 - Telecommunication Services
Hermes Growth Partners; CANEPA
03/13/12 Gradwell Communications 1.8 - Altitude Partners Diversified Telecommunication Services
03/09/12 Packet One Networks 67.0 - SK Telecom; Green Packet Diversified Telecommunication Services
03/05/12 Keycom 2.4 - - Diversified Telecommunication Services
02/29/12 Elevate 1.7 - - Diversified Telecommunication Services
02/28/12 Media Technologies 0.3 - - Diversified Telecommunication Services
02/23/12 Pure Mobile 1.6 - Birmingham City Council Telecommunication Services
02/23/12 VelaTel Global Communications 186.7 - Excel Era; The Isaac Organization Telecommunication Services
02/20/12 PT Smartfren Telecom 110.5 - PT Dian Swastatika Sentosa Telecommunication Services
02/09/12 GCI Com 15.9 - Business Growth Fund Diversified Telecommunication Services
02/07/12 Access Media 3 30.0 - Petra Capital ; ORIX Venture Finance Diversified Telecommunication Services
02/06/12 Tellus - - Newfund Management Diversified Telecommunication Services
02/01/12 Anic-Sistemi doo - - Kendaron Capital Partners Telecommunication Services
Virgin Group; The European Bank for Reconstruction
01/31/12 Trivon 106.7 - Diversified Telecommunication Services
and Development; Gazprombank Investment Arm
01/18/12 Lianlian Pay 125.0 - American Express Telecommunication Services
01/17/12 FiberLink - - Bridge Capital Holdings Diversified Telecommunication Services
Earlybird Venture Capital; BayernLB Capital Partner;
01/12/12 nfon 5.1 - Diversified Telecommunication Services
MIG; High-Tech Grnderfonds Management
01/09/12 Ooma 17.3 - Draper Fisher Jurvetson; The Founders Fund Diversified Telecommunication Services
01/06/12 Tele Norte Leste Participacoes - - BlackRock Diversified Telecommunication Services
The Michael and Susan Dell Foundation, Endowment
01/05/12 BASIX Sub-K iTransactions - - Telecommunication Services
Arm
12/31/11 Delta Communications - - Stephens Capital Partners Diversified Telecommunication Services
12/31/11 Digital Gen 0.1 - GMM Grammy Public Company Telecommunication Services
Global Telecom
Sector Review
Closed
Date
12/31/11 Entel - - Swedfund International Diversified Telecommunication Services
12/31/11 F2i Reti TLC - - Intesa Sanpaolo, Investment Arm Diversified Telecommunication Services
12/31/11 Let's GOWEX 0.7 - Midi Capital Diversified Telecommunication Services
12/28/11 Broadcast International 1.3 - ACT Capital Management Diversified Telecommunication Services
12/28/11 VIBO Telecom 0.0 - Compal Electronics Telecommunication Services
12/22/11 Insprit 1.7 - - Telecommunication Services
Earlybird Venture Capital ; BayBG; MIG ; High-Tech
Grnderfonds Management ; BayTech Technology
12/14/11 Digifonica International 1.4 - - Diversified Telecommunication Services
12/13/11 Clearwire 331.4 - Sprint HoldCo Telecommunication Services
12/02/11 OpenNet 3.5 - SingTel Interactive Diversified Telecommunication Services
11/28/11 Hits Telecom Espaa 1.8 - Hits Telecom Holding Company Diversified Telecommunication Services
11/25/11 LAP Green Network 270.0 - Levant Group; Demco Diversified Telecommunication Services
11/25/11 Unified Telecom 0.2 - Unified Communications Diversified Telecommunication Services
11/09/11 Sea Fibre Networks 7.5 - - Diversified Telecommunication Services
11/02/11 Moscow City Telephone Network 49.4 - - Diversified Telecommunication Services
10/31/11 Freshtel Holdings 0.2 - Lang Pty; Citystyle Holdings Diversified Telecommunication Services
10/31/11 IFNet - - ENTRE PRENEUR Telecommunication Services
10/21/11 Two Degrees Mobile 11.0 - Trilogy International Partners Telecommunication Services
10/18/11 LYFE Communications 0.4 - - Diversified Telecommunication Services
10/11/11 Aicent - - TA Associates Management Telecommunication Services
10/10/11 NORDTELEKOM 0.8 - Beltav Diversified Telecommunication Services
Public Employee Retirement System of Idaho; Asphalt
10/07/11 HUGHES Telematics 20.0 - Diversified Telecommunication Services
Green
10/03/11 GTEL Mobile 500.0 - VimpelCom Telecommunication Services
09/30/11 Sim Travel - - Enterprise Ireland, Investment Arm Diversified Telecommunication Services
09/28/11 Aloha Broadband - - Agility Ventures Diversified Telecommunication Services
09/28/11 CommSPEED - - Agility Ventures Diversified Telecommunication Services
09/28/11 Computers & Tele-Comm - - Agility Ventures Diversified Telecommunication Services
09/28/11 RuralNET Wireless - - Agility Ventures Diversified Telecommunication Services
09/22/11 Ironroad 0.5 - - Telecommunication Services
09/19/11 Eaton Towers 150.0 - Capital International Telecommunication Services
09/19/11 Global Telecom & Technology 8.1 - BIA Digital Partners SBIC II Diversified Telecommunication Services
09/19/11 NEXTDC 51.0 - - Diversified Telecommunication Services
Tech Coast Angels Inc.; Pasadena Angels; Maverick
09/13/11 AnyMeeting - Seed Diversified Telecommunication Services
Angels
09/13/11 Toktumi 6.0 1 Kistefos Venture Capital Diversified Telecommunication Services
Sequoia Capital; Scale Venture Partners; Khosla
09/08/11 RingCentral 10.0 4 Ventures; Cisco Systems, Investment Arm; DAG Telecommunication Services
Ventures; SVB Silicon Valley Bank, Investment Arm
09/06/11 NextGen Communications SRL 2.0 - Romtelecom Diversified Telecommunication Services
08/31/11 O2 Secure Wireless 0.1 - - Diversified Telecommunication Services
08/31/11 Two Degrees Mobile 20.0 - Trilogy International Partners Telecommunication Services
Earlybird Venture Capital; BayBG; MIG; High-Tech
Grnderfonds Management
08/12/11 deltathree 1.6 - D4 Holdings Diversified Telecommunication Services
08/11/11 Airband Communications 20.0 - ABRY Partners Diversified Telecommunication Services
HDS International Prior to Reverse Merger
08/10/11 0.2 - - Diversified Telecommunication Services
with Hillwinds Ocean Energy
08/08/11 Etonenet 3.0 - Mitsui & Co. Global Investment Telecommunication Services
08/05/11 Trentino NGN - - MC-link; Fibra Ottica Diversified Telecommunication Services
07/31/11 Iusacell PCS 1,602.5 - Grupo Televisa Telecommunication Services
07/29/11 Spice Digital 20.0 - MediaTek Singapore Telecommunication Services
07/20/11 Linkem 15.6 - - Diversified Telecommunication Services
07/18/11 Azulstar 0.8 - Grand Angels; Blue Water Angels Diversified Telecommunication Services
07/18/11 ETHL Communications Holdings 449.9 - - Diversified Telecommunication Services
07/12/11 Accel Telecom 7.0 - Shamrock Israel Growth Fund Advisors Diversified Telecommunication Services
07/07/11 Cubic Telecom 0.7 - Enterprise Ireland, Investment Arm Telecommunication Services
07/05/11 LightSquared 265.0 - - Telecommunication Services
07/01/11 EFTEL 2.3 - - Diversified Telecommunication Services
07/01/11 onwave 6.0 - Nucleus Venture Partners Diversified Telecommunication Services
06/28/11 Pac-West Telecomm - - Columbia Ventures Diversified Telecommunication Services
06/22/11 Onse Telecom Corporation 18.6 - - Diversified Telecommunication Services
06/22/11 Rutland Telecom - - Gigaclear Diversified Telecommunication Services
Stark Investments; Whitebox Advisors; Heights Capital
06/20/11 Globalstar 38.0 - Diversified Telecommunication Services
Management; Thermo Telecom Partners
HDS International Prior to Reverse Merger
06/20/11 0.0 - - Diversified Telecommunication Services
with Hillwinds Ocean Energy
EDF Ventures; Kennet Partners; VantagePoint Capital
06/20/11 IntelePeer - - Diversified Telecommunication Services
Partners; IVS A/S; NorthCap Partners; ATEL Ventures
06/15/11 Hawe Splka Akcyjna 3.6 - - Diversified Telecommunication Services
06/14/11 inContact 23.9 - Enterprise Networks Holdings Diversified Telecommunication Services
06/14/11 KeyOn Communications Holdings 2.6 - California Capital Equity Diversified Telecommunication Services
06/07/11 Yugratel 25.3 - - Diversified Telecommunication Services
05/31/11 Bharti Airtel Lanka 68.8 - Bharti Airtel Telecommunication Services
Global Telecom
Sector Review
Closed
Date
05/31/11 COMDI 1.5 - CJSC VTB Capital, Investment Arm Diversified Telecommunication Services
New Zealand Funds Management; Khattar Capital
05/25/11 NewSat 7.6 - Diversified Telecommunication Services
International .; Daun Consulting
05/24/11 T-2 druzba 0.4 - Gratel Diversified Telecommunication Services
05/17/11 Fusion Communications 18.4 - Marubeni Diversified Telecommunication Services
05/14/11 280.0 - NTT DOCOMO Telecommunication Services
Company
05/13/11 Brampton Crest International 1.5 - - Diversified Telecommunication Services
05/11/11 BayHill Capital 0.2 - - Diversified Telecommunication Services
05/04/11 Speach Media - - Paua Ventures Telecommunication Services
05/03/11 LYNX Network Group - - Plymouth Venture Partners Diversified Telecommunication Services
Octopus Investments; Octopus Ventures; Octopus
04/30/11 Mi-Pay - - Diversified Telecommunication Services
Titan Vct 2; Octopus Titan VCT 3
04/29/11 NEXTDC 36.7 - - Diversified Telecommunication Services
04/26/11 OpenNet 4.9 - SingTel Interactive Diversified Telecommunication Services
National Technology Enterprises Company; Dolphin
04/26/11 Virgin Mobile Middle East & Africa 10.0 - Telecommunication Services
International
04/24/11 Arrival Communications 125.0 - Investcorp Bank Diversified Telecommunication Services
04/11/11 easyCALL.pl Splka Akcyjna 0.0 - - Diversified Telecommunication Services
04/04/11 LUDO Mobil 6.4 - - Telecommunication Services
04/01/11 Tekmi 0.4 - Softline Venture Partners Diversified Telecommunication Services
03/31/11 KOREK Telecom 295.0 - Orange; Agility Public Warehousing Company Telecommunication Services
03/30/11 Bandwidth.com 21.9 - Carmichael Partners Diversified Telecommunication Services
Shyam Telecom; Shyam Basic Infrastructure Projects;
03/30/11 Sistema Shyam TeleServices 615.9 - Telecommunication Services
Rosimushchestvo
03/29/11 SingCash 0.1 - SingTel Singapore Telecommunication Services
03/28/11 iTokk 0.1 - - Diversified Telecommunication Services
03/28/11 Matrix Cellular Services 30.0 - CX Partners Telecommunication Services
03/28/11 PASA Participaes 824.0 - Bratel Brasil Diversified Telecommunication Services
03/28/11 Telemar Participacoes 457.8 - - Diversified Telecommunication Services
03/28/11 TNL PCS 5,004.2 - Portugal Telecom, SGPS Telecommunication Services
Siparex Proximit Innovation; Rhne-Alpes PME
03/25/11 IP Directions 1.5 1 Diversified Telecommunication Services
Gestion
03/25/11 Satmos 0.4 - Aquiti Gestion Diversified Telecommunication Services
03/23/11 Liberty Bell - - DISH Media Holdings Diversified Telecommunication Services
03/22/11 11i Solutions 1.8 - Steel Pier Capital Telecommunication Services
03/22/11 Snacks 10.0 1 GSR Ventures Management Diversified Telecommunication Services
03/21/11 Vocus Communications 13.2 - - Diversified Telecommunication Services
03/10/11 Prime City One Capital 0.4 - - Diversified Telecommunication Services
02/28/11 Two Degrees Mobile 6.0 - - Telecommunication Services
02/16/11 Global Telecom & Technology 0.4 - - Diversified Telecommunication Services
China TieTong Telecommunications
02/15/11 2,275.6 - China Mobile Diversified Telecommunication Services
Corporation
FSI Rgions; Bpifrance Financement; Bpifrance
02/15/11 COMIRIS Group 2.0 2 Diversified Telecommunication Services
Participations
02/10/11 Avantel - - Discovery Capital Management Telecommunication Services
02/10/11 Droam - - Value8 Diversified Telecommunication Services
Zesiger Capital Group; Public Employee Retirement
02/07/11 HUGHES Telematics 5.0 - Diversified Telecommunication Services
System of Idaho; Asphalt Green
02/07/11 HUGHES Telematics 20.0 - - Diversified Telecommunication Services
02/03/11 Times Telecom 0.3 - - Diversified Telecommunication Services
02/01/11 Etonenet - - WI Harper Group Telecommunication Services
KfW Mittelstandsbank, Investment Arm; IBB
01/31/11 HETAN Technologies - - Beteiligungsgesellschaft; Logan Capital; Golden Diversified Telecommunication Services
Venture ; Wecken & Cie
01/28/11 Netel Technology Holdings 0.9 - - Diversified Telecommunication Services
01/26/11 J & C Pacific 0.6 - Insas Technology Diversified Telecommunication Services
01/26/11 S.A. Moldcell 11.7 - - Telecommunication Services
01/17/11 kajeet 18.0 - - Telecommunication Services
01/14/11 Moko Social Media 1.0 - Earl Fiduciary Telecommunication Services
01/12/11 Helios Towers Africa 25.0 - International Finance Corporation Telecommunication Services
01/12/11 Pacific Fibre 5.5 4 New Zealand Trade and Enterprise; Valar Ventures Diversified Telecommunication Services
01/07/11 Affinity VideoNet 4.5 - Main Street Capital Diversified Telecommunication Services
Global Telecom
Sector Review
Redwood Capital Group is an investment banking firm serving the technology,

communications, media, business services and other growth industries. The
firm focuses on mergers & acquisitions, corporate finance, restructuring and
valuation advisory services for its clients worldwide. Redwood has offices in
New York, Los Angeles and Geneva and via its LD&A Redwood Joint Venture, fully-
staffed offices in London, Paris, Munich and Berlin, as well as a presence in Milan
through its Strategic Alliance with Livolsi & Partners. Additional information
can be found at www.redcapgroup.com.
New York Los Angeles
950 Third Avenue Suite 2001 1100 Glendon Avenue Suite 905
New York NY 10022 Los Angeles CA 90024
Tel: +1 212 508 7100 Tel: +1 310 696 4001
Fax: +1 212 508 7102 Fax: +1 310 507 0263
Geneva Milan (Strategic Alliance)

17 Rue du Cendrier Livolsi & Partners Largo Augusto, 3
1202 Geneva Switzerland 20122 Milan Italy
Tel: +41 (22) 518 07 83 Tel: +39 (02) 777 991
Fax: +41 (22) 839 72 49 Fax: +39 (02) 777 993 90
Paris (Joint Venture) London (Joint Venture)

8 rue Halvy 42 Brook Street, London W1K 5DB
75009 Paris France United Kingdom
Tel: +33 1 58 18 39 00 Tel: +44 20 7112 7777
Fax: +33 1 53 43 09 76 Fax: +44 20 7900 2329
Munich (Joint Venture) Berlin (Joint Venture)

Theatinerstr. 42, Torstr. 33,
80333 Mnchen Germany 10119 Berlin, Germany
Tel: +49 89 1490 265-25 Tel: +49 30 60 9889 070
Fax: +49 89 1490 265-13
www.redcapgroup.com
For Information:
Matthew Johnson
Managing Partner, Redwood Capital Group
mjohnson@redcapgroup.com
310.696.4004
Copyright 2014 Redwood Capital Group LLC. Redwood Capital is the marketing name for Redwood
Capital Group and its subsidiaries. All securities transacted through RCG, LLC member FINRA/SIPC,
a wholly-owned subsidiary of Redwood Capital Group. Additional information can be found about
FINRA at www.finra.org and SIPC at www.sipc.org. This report is published solely for informational
purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy any
security. The information herein is based on sources we believe to be reliable but is not guaranteed
by us and we assume no liability for its use. Any opinions expressed herein are statements of our
judgment on this date and are subject to change without notice.

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Global Telecom

Mergers & Acquisitions

Total Average Median Average Average Median Median

Focusing on Activity in 2012 and 2013

Global deal volume Proportion of deal value in 2013

100 North America

0 LaAm & Caribbean

Source: Capital IQ Source: Capital IQ

Deal Value 2009 2010 2011 2012 2013

Source: Capital IQ Source: Capital IQ

Deal Volume and Value 2009 2010 2011 2012 2013

US Wireless Market and Trends

20.0% 17% 16%

15.0% 13% 14%

2011 2012 2013 2011 2012 2013

Verizon AT&T Sprint T-Mobile US Verizon AT&T Sprint T-Mobile US

Source: Company filings Source: Company filings

U.S. Market Average Spectrum Depth

Spectrum Depth (MHz)

<1GHz >1GHz >1GHz from LEAP (AWS+PCS)

Source: Credit Suisse

Closed Trans. Revenue EBITDA Revenue EBITDA

Closed Trans. Revenue EBITDA Revenue EBITDA

Closed Trans. Revenue EBITDA Revenue EBITDA

Source: Capital IQ (in $ millions)

Top 100 US M&A Deals in Telecom (2010 to 2014 YTD April)

Closed Trans. Revenue EBITDA Revenue EBITDA

Source: Capital IQ (in $ millions)

Middle-East, Africa & Others

Global Telecom Private Financings (2011 to 2014 YTD April)

Source: Capital IQ (in $ millions)

Redwood Capital Group is an investment banking firm serving the technology,

Geneva Milan (Strategic Alliance)

Paris (Joint Venture) London (Joint Venture)

Munich (Joint Venture) Berlin (Joint Venture)

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