CEE SATELLITE BROADBAND INTERNET OPPORTUNITY
IN PARTNERSHIP WITH
Slide 2
PREFINAL VERSION 7
THE VISIONNETSATONE WILL BECOME THE LEADING SATELLITE BROADBAND COMPANY IN CEE
THE MISSIONBRIDGING THE DIGITAL DIVIDE WITH AFFORDABLE BROADBAND INTERNET VIA SATELLITE
NetSatOne IS UNIQUELY POSITIONED TO OFFER HIGH QUALITY SATELLITE BROADBAND INTERNET IN CEE1, TURKEY AND UKRAINE2
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
(1) CEE (15 countries) will be covered by HYLAS1 (launch in mid-November 2010)
(2) Turkey and Ukraine will be covered by HYLAS2
Countries to be covered by satellite HYLAS1 – roll-out in two consecutive phases (Jan-11, Sep-11)
TR and UA to be covered by HYLAS2 – roll-out in Oct-12
UA
TR
RO
PL
HU
HR
SK
BG
RS
Slide 3
PREFINAL VERSION 7
Raiffeisen Investment has been jointly retained by NetSatOne s.r.o. and Avanti plc to explore funding options for a satellite broadband venture in the CEE region
To this end, NetSatOne seeks to attract an equity investment of at least EUR 12.5m
NetSatOne intends to launch satellite broadband services in various CEE countries in January 2011
Big differences remain in the availability of broadband internet infrastructure in Central and Eastern Europe, which still has a substantially lower broadband coverage than Western Europe. In addition, non-urban areas are lagging far behind cities
NetSatOne is uniquely positioned to succeed in this venture as it will have quasi-exclusive access to Avanti’s new Ka-band satellite HYLAS 1 whose launch is scheduled for mid-November 2010
While satellite broadband has been around for quite some time, this new generation of satellites with its superior technological capabilities (speed, capacity, cost) has to be considered a true game changer
TRANSACTION BACKGROUNDThe Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
THE PROPOSED VENTURE
HYLAS 1 & HYLAS 2
B2C customers in all HYLAS 1&2 countries
AND BEYOND
2011 201x
Launch of HYLAS1 Launch of HYLAS2
2012Establish B2C business model and marketing approach
Establish sales channel infrastructure for B2C expansion
700 internet cafes and B2B customers
57,000 B2C customers
45,000 White-label customers
Establish B2C business model in HYLAS 2 countries, scale-up operations in existing HYLAS 1 markets
1,000 internet cafes and B2B customers
240,000 B2C customers
125,000 White-label customers
PHASE 1
HYLAS1
Bandwidth /capacityUsed: 1.0Gbps
Business Model:B2B/internet Café,
White-label product for DTH playersB2C in selected countries
HYLAS1 & HYLAS2
Bandwidth /capacityUsed: 3.7Gbps
Business Model:Scale-up of B2C in core Eastern European
countries covered by HYLAS1, roll-out in Ukraine and Turkey (covered by HYLAS2)
PHASE 2
Slide 4
PREFINAL VERSION 7
STRONG PARTNERSThe privileged partnership with Avanti ensures a virtual monopoly on Ka-band satellite bandwidth in the region. In addition, Hughes, the leading U.S. satellite broadband provider, ABeam Consulting, an international management consultancy with substantial CEE experience, and possibly the EBRD (European Bank for Reconstruction and Development), will contribute resources and know-how to ensure the success of the NetSatOne project
KEY INVESTMENT HIGHLIGHTS
I
PREFERENTIAL ACCESS TO GAME-CHANGING TECHNOLOGYNetSatOne will source its satellite bandwidth from Avanti, the operator of HYLAS1, the first European Ka-band spot beam satellite which is to be launched in mid-November 2010. Avanti will grant NetSatOne a substantial discount in its first three years of operations. In the US, Ka-band satellite broadband has proven a veritable game changer as it is far superior in terms of quality and cost to conventional satellite internet solutions. Thus, NetSatOne will be in a position to field a product far superior to that of existing players
III
SUPERIOR PRODUCTWinning combination of preferential access to new technology, a product mix tailored to customer needs, and competitive pricing
IV
PROVEN BUSINESS MODEL GROUNDED IN SOUND MARKET RESEARCHRobust bottom-up estimates for key markets feed into a business model which has already been successfully
implemented by NetSatOne’s parent in the German marketV
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
VAST MARKET POTENTIAL50 million citizens in Eastern Europe are not covered by broadband, approx. 30 million of which live in rural areasII
Slide 5
PREFINAL VERSION 7
STRONG PARTNERSNetSatOne HAS SECURED THE SUPPORT OF POTENT PLAYERS
STRATEGIC PARTNERS
A range of strategic partners will ensure a successful business launch of NetSatOne:
AVANTI COMMUNICATIONS, the operator of the first European satellite to carry a spot beam satellite broadband system (HYLAS1 to be launched in November 2010)
Avanti has signed an exclusive bandwidth contract at very favourable conditions with NetSatOne. Avanti’s contribution to the proposed venture will be in form of a substantial discount on the satellite bandwidth provided to NetSatOne
HETAN TECHNOLOGIES, the parent company of NetSatOne and established provider of bi-directional broadband satellite services, will provide experienced management resources as well as its intelligent bandwidth management system and operational support system
FILIAGO, Germany’s leading satellite internet provider, has signed a term sheet under which it will be merged into HETAN, conditional, amongst others, upon satisfactory conclusion of due diligence and the raising of sufficient capital. Filiago’s entire customer base of 10,000 subscribers will be migrated into NetSatOne
EBRD, the largest private equity investor in Eastern Europe, is a key enabler for promoting and driving the project with local governments
The EBRD shows strong interest in contributing to the funding of NetSatOne
ABEAM CONSULTING, a global management consultancy with strong expertise in international market entries and an excellent network of telecom industry experts in Eastern Europe
ABeam has committed itself to play an instrumental role in the roll-out of NetSatOne’soperations
HUGHES is the leading provider of high-speed satellite internet access in the U.S.
NetSatOne is in advanced talks for a strategic cooperation with Hughes. Hughes will contribute its expertise in distribution, logistics, installation services and billing. Further areas of collaboration and support could be vendor financing and equipment leasing
I
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
KEY STRATEGIC PARTNER
OPERATIONALPARTNERS
SHAREHOLDERS
EBRD Investor HETAN
HETAN + FiliagoAssets
Filiago
AVANTIHYLAS1HYLAS2
ABeamConsulting
Hughes
HETAN / Filiagomerger
Slide 6
PREFINAL VERSION 7
VAST MARKET POTENTIALMARKET ANALYSIS & PRIORITISATION
Category Weighting 30.0% 7.5% 7.5% 5.0% 30.0% 10.0% 7.5% 2.5%
Coun
try
Prio
rity
NSO
(Q
ualit
ativ
e &
Q
uant
itat
ive)
Qua
ntit
ativ
e Pr
iori
tisa
tion
Ove
rall
inde
x sc
ore
Inde
x pu
rcha
sing
pow
er
Inde
x fi
xed
broa
dban
d pe
netr
atio
n
Inde
x br
oadb
and
pene
trat
ion
grow
th
Inde
x po
pula
tion
not
co
vere
d by
fix
ed b
road
band
Inde
x ru
ral
popu
lati
on n
ot
cove
red
by f
ixed
bro
adba
nd
Inde
x m
onth
ly f
latr
ate
pric
ing
Inde
x EB
RD r
egul
atio
n ra
ting
Inde
x lic
ensi
ng d
urat
ion
Albania 2 2 34 25 91 53 5 8 66 82 0
Armenia - 4 27 21 99 18 4 5 100 0 0
Azerbaijan - 3 31 33 97 61 12 17 30 0 0
BiH 3 3 32 26 76 40 5 10 58 82 0
Bulgaria 2 3 31 44 48 33 2 8 38 82 0
Croatia 2 2 40 65 44 46 4 6 43 95 0
Czech Republic 2 1 44 88 19 23 6 6 54 95 0
Georgia - 4 26 16 90 100 6 9 38 0 0
Hungary 1 2 37 67 17 14 3 4 56 95 0
Lithuania 2 3 31 59 16 15 2 4 32 95 0
Moldova 3 4 26 10 85 56 6 11 44 62 0
Montenegro 3 4 30 41 53 35 1 1 59 62 0
Poland 1 1 54 63 41 21 34 57 49 95 0
Romania 1 2 41 44 45 42 13 31 38 95 0
Serbia 2 3 30 38 78 31 9 14 37 25 0
Slovakia 1 2 44 77 47 21 4 10 54 95 0
Slovenia 2 1 45 100 0 12 1 2 64 95 0
Macedonia 3 4 25 33 58 45 2 3 50 25 0
Turkey 1 1 61 44 63 25 100 100 59 0 0
Ukraine 1 1 45 24 83 46 66 65 50 0 0
Indexed to best value = 100
MARKET PRIORITISATION & ENTRANCE
Fixe
d br
oadb
and
pene
trat
ion
Ave
rage
fix
ed b
road
band
pe
netr
atio
n gr
owth
(20
04-2
009)
Ave
rage
pop
ulat
ion
not
cove
red
by f
ixed
bro
adba
nd (
mill
ion)
Ave
rage
rur
al p
opul
atio
n no
t co
vere
d by
fix
ed b
road
band
(m
illio
n)
Albania 2.0% 177.2% 2.9 1.7
Armenia 0.2% 59.9% 2.4 1.0
Azerbaijan 0.7% 203.1% 6.6 3.5
BiH 5.0% 132.1% 3.0 2.0
Bulgaria 11.1% 109.7% 1.2 1.6
Croatia 11.9% 152.3% 2.3 1.3
Czech Republic 17.1% 76.8% 3.3 1.2
Georgia 2.2% 332.2% 3.2 1.9
Hungary 17.5% 46.4% 1.6 0.8
Lithuania 17.8% 49.5% 1.1 0.8
Moldova 3.2% 185.4% 3.2 2.2
Montenegro 10.0% 116.5% 0.4 0.2
Poland 12.6% 71.0% 18.7 11.8
Romania 11.7% 140.5% 7.4 6.4
Serbia 4.6% 102.8% 4.8 2.9
Slovakia 11.2% 70.3% 2.5 2.0
Slovenia 21.2% 39.7% 0.6 0.5
Macedonia 8.9% 149.6% 1.2 0.5
Turkey 7.8% 83.3% 55.7 20.6
Ukraine 3.5% 151.9% 36.6 13.4
158.5 76.2TOTAL
Market entrance according to current Business Plan
76.2m* 60.8m*Population in target markets not covered by broadband
Population in CEE + TR not covered by broadband
There exists a huge market potential for satellite broadband in Eastern European countries, Turkey and the Ukraine. An estimated 76 million CEE/UA/TR citizens live in rural areas not covered by broadband internet
In Eastern Europe, average broadband penetration (connections per 100 inhabitants) stands at 11.8% , dramatically lower than in countries such as Spain (20.2%), Austria (20.7%), and Germany (27.5%)
Poor ICT infrastructure (e.g. fixed-line, cable or 3G networks) in combination with diminishing returns to network expansion in rural areas hamper the closing of this digital divide
These areas will be covered by Avanti’s HYLAS1 and HYLAS2 satellites. HYLAS1 will cover 15 countries in Eastern Europe, while HYLAS2 will extend NetSatOne’s coverage area to include Turkey, Ukraine, as well as the Caucasus
There is relatively low competition in non-urban areas from fixed and mobile broadband service providers - very costly and time-consuming to set up the necessary terrestrial infrastructure
Satellite broadband as the obvious solution to further improve coverage in rural areas -government support is very likely
MARKET POTENTIAL
II
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
* Includes Turkey & Ukraine
Source: ITU (2009)
Slide 7
PREFINAL VERSION 7
VAST MARKET POTENTIAL MARKET ENTRY & SEGMENTATION
COUNTRY PRIORITISATION & ROLLOUT SEGMENTATION & TARGETING
Low income group
Target group 2
(rural)
Target group 4
(rural)Low
Low incom
e group
Target group 1
(suburban)
Target group 3
(suburban)Medium
High competition (cities)
B2B on case by case basis High
HighLow
Population density
II
PL
UA
RO
HU
CZ
SK
SL HR
BA
ME
ALMK
RS
BG
TR
LT
Priority 1 Countries
Priority 2 Countries
Priority 3 Countries
Priority 2 Countries not incl. in Roll-out scenario
Priority 3 Countries not incl. in Roll-out scenario
SEGMENTATION MATRIX
The extensive market analysis conducted by ABeam Consulting has enabled NetSatOne to devise a successful market penetration approach
Ideal target customers are inhabitants of suburban / peripheral areas with enough disposable income and computer skills, who have not subscribed to internet services
By user type
Residential
SMEs
Prioritization of countries by market potential
Target customers segments
By geographic region
Underserved areas (focus)
Unserved areas
High
Medium
Low
Segment Attractiveness
MD
Priority 1 Countries to be covered by HYLAS2
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
Slide 8
PREFINAL VERSION 7
Digi TVSubs: 1.1m
DolceSubs: 884,136
FocusSatSubs: 182,600AktaSubs: 80,000
Boom TVSubs: 130,000
Romania
D-SmartSubs: 900,000
DigiturkSubs: 2.3m
TurkeyBulsatcom
ITV Partner
Bulgaria
Combined subs of 315,300
VAST MARKET POTENTIAL SATELLITE BROADBAND TO COMPLEMENT DTH
TotalTVSubs: 170,000 (RS), 50,000 (BA), 30,000 (ME)
Digi TVSubs: 100,000 (RS), 67,000 (HR)
BalkansDigitalbSubs: 400,000 (AL), 40,000 (Kosovo),
UPC DirectSubs: 183,500
Digi TVSubs: 420,000
Hello HDSubs: 4,000
Antenna HungáriaSubs:36,500
T-Home Sat TVSubs: 156,142
Hungary
Sky LinkSubs: 1,000,000
CS LinkSubs: 500,000
UPC DirectSubs: 99,400
Digi TVSubs: 210,000
MagioSubs: n/a
Czech Republic & Slovakia
Viasat
Subs: 216,000
Poverkhnost +Subs: n/a
MYTVSubs: n/a
NTV +Subs: n/a
Ukraine
Cyfrowy PolsatSubs: 3.2mCyfra+Subs: 1.55mITI GroupPlatforms: TNK, nSubs: 724,000OrangeSubs: 122,000
TVPSubs: n/a
Poland
Note: Subscriber Data as of 3Q 2009
NetSatOne will enable DTH providers to introduce triple-play services. Through its “white-label”product, NetSatOne will offer high performance internet access and Voice over IP (VOIP) solutions at a competitive price
II
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
Slide 9
PREFINAL VERSION 7
NEW KA-BAND SATELLITE TECHNOLOGY CONSITUTES A MAJOR ADVANCE OVER EXISTING SOLUTIONS
Satellite is the only technology with 100% coverage
Available even in the most rural areas
Internet via satellite is available immediately
Time to market
No infrastructure costs for provisioning of additional customers
No additional terrestrial infrastructure for provider required
Currently the typical capacity of a large beam GEO satellite is 1Gbps
A new generation will boost the capacity from 1 up to 100Gbps through:
Spot beams (re-use of frequencies)
Ka-band (previously unused spectrum)
WildBlue (USA) started Ka-band spot beam based services in 2005
400,000 subscribers as of September 2009
Ka-band uses technology that drastically lowers latency (the time delay in signal transmission)
European launches 2010-2012:
HYLAS1 & HYLAS2 (Avanti)
KA-SAT (Eutelsat)
NetSatOne and Avanti Communications have signed a strategic partnership agreement
NetSatOne will have preferential access to Avanti satellite bandwidth through a right of first refusal
Avanti will grant a substantial discount on the bandwidth it provides to NetSatOne
Avanti will launch HYLAS1 in mid-November 2010
First European Ka-band spot beam satellite for IP
Very high power (62dBW) Ka (two-way IP) & Ku (broadcast only) band satellite
2-3 times more powerful than any other current satellite over Europe
15 years lifetime, support for up to 350,000+ users of broadband services
KA-BAND SPOT BEAM: A NEW GENERATION OF SATELLITES AVANTI & NETSATONE – A STRONG PARTNERSHIP
Future proof
New satellites will add capacity while subscribers can keep their equipment
Migration path for cooperations with fixed line operators
If FTTx or DSL arrives, possibility to direct satellite beam to another area
GAME-CHANCING TECHNOLOGYKA-BAND SATELLITE INTERNET III
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
Slide 10
PREFINAL VERSION 7
GAME-CHANGING TECHNOLOGYKA-BAND - A PROVEN TECHNOLOGY & BUSINESS MODEL IN THE U.S.
Founded in 1971, primarily focused on VSAT design, manufacture and service, largest provider of high-speed satellite Internet access in the U.S.
Leading supplier for VSAT user terminals, expanded business from device manufacturing to internet service
Largest provider of high-speed satellite internet access in the U.S. (exceeded 500,000 subscribers in January 2010)
Success factors
Early market entry: Financial resources to support building and maintaining large networks
From manufacture to service: Huge economies of scale in providing a highly automated service to all customers
Business diversity: B2B as well as B2C
Technology innovation: Continuous investment in new technologies, products and services
Operational efficiency
Founded in 2004, started next-generation Ka-band satellite broadband system in the U.S. mainly aimed at consumer business
420,000 subscribers in 2009, annual revenue of USD 209m
Acquired by ViaSat in December 2009 for USD 568m
Success factors
Advanced technology on satellites: Ka-band spot beam
Continuous investment: Fulfilling potential customer requirements and future market growth
Strong marketing, intense campaign: State-by-state campaign, integration of local dealer network power
Strong sales channels: Partnership with communities
Efficient operations: Customer oriented focus
HughesNet WildBlue
THE U.S. EXAMPLE HAS DEMONSTRATED THE STRONG DEMAND FOR SATELLITE BROADBAND SERVICES VIA KA-BAND SPOT BEAM SATELLITES
III
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
Slide 11
PREFINAL VERSION 7
SUPERIOR PRODUCTA DUAL APPROACH
The B2B2C product will be bi-directional satellite broadband internet service for business customers who will in turn provideinternet services to end consumers
Based on different business requirements, additional services and product bundles will be offered in different packages, from PCs,VoIP hardware and software, WLAN routers, to a complete franchising concept
B2B Product Concept
Internet cafés and local small broadband service providers will be supported by NetSatOne to penetrate the market with broadband internet services in rural areas
White-label product will enable DTH providers to complement their DTH offering with satellite broadband internet
Basic package will contain only the CPE and satellite broadband access, whereas premium package will be a full blown internet cafébusiness using a franchise system
NetSatOne will offer different product “sizes” to serve the different needs of individual customers regarding internet access (user behaviour)
The parameters which differ between light, medium and heavy internet users are transfer speed (up- and downlink) and transfer volume
NetSatOne will therefore offer a range of product sizes from which customers can chose their best fit. This will allow acquiring customers with a below-average income by offering an affordable base package, as well as high-end customers by offering a premium/professional package
Targeting end consumers via internet cafés (B2B2C)
Reaching end consumers who cannot afford own subscription
Local internet café operators as entrepreneurial partners
B2B business as “enabler” for B2C
B2B business to test and better understand local B2C markets
B2B as multiplier to acquire B2C subscribers (future sales cannel)
Subscriber migration from Filiago for base capacity utilization and new users to grow business sustainably
New subscriber acquisition
Combine marketing and internet cafés as multipliers for subscriber acquisition
Multiple user antenna to secure targeted ARPU
IN ORDER TO SUCCESFULLY PENETRATE THE IDENTIFIED MARKETS, NETSATONE’S STRATEGY WILL INITIALLY FOCUS ON B2B2C AS ITS CORE PRODUCT, COMPLEMENTED BY A B2C OFFERING WHICH WILL INCREASINGLY GROW IN IMPORTANCE
B2B2C B2C
EUR 129.001,5366,144Business Plus
EUR 59.001,0244,096Business
EUR 29.005122,048Professional Plus
EUR 19.002561,024Professional
EUR 9.00128512Home Plus
Indicative Pricing*
Upload-Speed(kbps)
Download-Speed(kbps)
Product name
(1) Assumed pricing for market entry in Poland, Hungary and Slovakia
B2C PRODUCT CATEGORIES1
IV
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
Slide 12
PREFINAL VERSION 7
TARGET CUSTOMER CUSTOMER VALUE PROPOSITION PRODUCT CONCEPT
End consumer in a location where terrestrial broadband internet is not available
B2CSingle Household
B2B2CResidential Block
End consumer living in a residential block in an area where terrestrial broadband internet is not available. Addressed via landlord (property owner)
B2BInternet Corner
Internet service provider (ISP) that wants to grow its customer base by offering broadband internet services in an area without terrestrial broadband internet access.
EUR 149
B2B/Wholesale White-Label
B2B SME/Corporation
Small and medium-size enterprises or corporations that are located in an area where terrestrial broadband internet is not available.
Get fast, reliable and secure broadband internet access for your business
Proprietor/operator of existing business with high customer/consumer fluctuation in an area without terrestrial broadband internet access (e.g. gas station, bar/café, convenience stores at train stations, bus terminals, rest areas)
PRODUCT
Proprietor/operator of existing business with high customer/consumer fluctuation in an area without terrestrial broadband internet access (e.g. gas station, bar/café, convenience stores at train stations, bus terminals, rest areas)
B2BInternet Terminal
EUR 149 (L)EUR 239 (S)
Entrepreneur, who wants to set up own business (in an area without terrestrial broadband access and with a minimum of potential customers).
B2B Internet Café(1/2)
Business/public authority that wants to offer broadband internet services in an area without terrestrial broadband internet access
B2B Internet for Public
Customer network
EUR 9 x 10Access to up to 10 individual units per rooftop CPE
SATDSL
EUR 9
PROFIT MODEL1
Monthly Charge
EUR 399 (L)EUR 399 (S)
EUR 1,400.00 x 10
EUR 20.00 x 500
EUR 49 (Lease)EUR 69 (Sale)
(1) Sample calculation based on a 24-month contract(2) Product Revenues (service charge, CPE sale, activation fee – Product costs (bandwidth sourcing, CPE, etc.)(3) 36-month contract
EUR 538
EUR 1,273
EUR 136,800
24m Gross Profit2
EUR 8,393 (L)EUR 7,711 (S)
EUR 5,039 (L)EUR 4,697 (S)
EUR 2,770
EUR 129,0403
EUR 1,511 (L)EUR 1,205 (S)
SUPERIOR PRODUCTINDICATIVE PRODUCT PORTFOLIO
IVThe Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
Get fast, reliable and affordable broadband internet access at your home (independently)
Get fast, reliable and very affordable broadband internet access in a residential block
Get a simple solution to offer your customers affordable broadband internet access in a location without terrestrial broadband internet access
Get a range of market-ready and scalable white-label broadband internet service products to market to customers in a location without terrestrial broadband internet access
Get a simple solution to offer your walk-in customers easy and affordable broadband internet access
Get a turn-key solution to start your own small business and offer your customers affordable broadband internet access in a location without terrestrial broadband internet access
Get broadband internet backhaul enabling you to offer broadband internet access to customers in a location without terrestrial broadband internet access
Primarily aimed at DTH providers as it will enable them to introduce triple-play services
Slide 13
PREFINAL VERSION 7
PROVEN BUSINESS MODEL
Profit
Revenue
Number of
subscriibers
x Revenue per
subscriber+ Monthly ARPU
CPE sales
+ Activation fee
Base fee
+ Value added services
Indirect
Direct
Onetime
+ Recurring
Onetime
+ Recurring
Office and staff
SAC+ CPE sourcing
Company setup+ Professional services+ Marketing
Bandwith sourcing
Broadband market growth
x Share of market growth
- Churn rate
Cost
Onetime
NetSatOne
Distribution
channels
B2B
B2B2C
Wholesale
B2C
Via sales representatives
Via online affiliates (e.g. country- specific online resellers)
Via local retailers (e.g. electronics stores)
Via wholesale partners (e.g. ISP, MNO or WiMAX operators)
Via own online platform
Via customer care centre
Via sales representatives
NETSATONE DISTRIBUTION CHANNELS
NETSATONE PROFIT COMPOSITION STRUCTURE
OPERATING MODEL
Both HETAN, NetSatOne’s parent, and Filiago, Germany’s leading satellite broadband provider which is to be merged into HETAN, have successfully established themselves as successful satellite broadband providersEssentially, NetSatOne will be in a position to deploy an operating model that has generated proven results in Western European marketsRather than being a mere greenfield venture, NetSatOne will benefit from:
A management team that has a strong track record and substantial expertise in the satellite broadband businessBusiness processes and organisation already in place (business processes such as billing, technical support, distribution logistics) which will be scaled up to enable swift penetration of target marketsThrough the proposed merger with Filiago, HETAN will acquire 10,000 subscribers and migrate them into NetSatOne, thereby providing a solid subscriber foundation
In order to leverage these existing assets most effectively, it is paramount to have a deep understanding of the target markets –specifically, the underlying factors that condition demand have to analysed in great depthTo this end, NetSatOne has, in collaboration with ABeamConsulting, conducted extensive exhaustive market analyses:
In a “bottom-up” manner, NetSatOne has evaluated target markets through local market research (identified e.g. threat of technological substitutes, disposable income, price elasticity, etc.) which entailed the gathering of first-hand information (interviews, surveys) The quality of the data gathered greatly transcends the relevance of available statistical data and enables NetSatOne to gauge true market demand
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
V
Slide 14
PREFINAL VERSION 7
2010 2011 2012 2013 2014 2015YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Revenue 3,785 19,719 40,492 75,939 103,092 125,997Gross margin 6,299 16,185 28,869 39,883 49,628
EBITDA 745 (7,092) 1,856 7,117 16,465 24,335margin (%) (36.0%) 4.6% 9.4% 16.0% 19.3%
EBIT (7,537) 789 5,651 15,362 23,855margin (%) (38.2%) 1.9% 7.4% 14.9% 18.9%
Net Income 603 (7,570) 767 4,577 12,443 19,322margin (%) (38.4%) 1.9% 6.0% 12.1% 15.3%
FINANCIAL PROJECTIONS
FINANCIAL PROJECTIONS (EUR ‘000)
FINANCIAL SUMMARY (EUR ‘000)
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
-20,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Revenue Gross margin EBITDA EBIT Net cash flow
PROJECTED CUSTOMERS
280
YEAR 5
366.913
124.800
241.077
1.036
YEAR 4
287.038
99.600
186.402
1.036
YEAR 3
203.152
74.400
127.744
1.008
YEAR 2
113.849
49.200
63.865784
CAGR +60%
YEAR 1
56.095
24.00031.815
Total Whitelabel customersTotal B2C customersTotal B2B customers
367k subscribers (after 5 years)
Required equity financing: EUR 12.5m
EBITDA positive 8 month after commencement of operations
Avanti bandwidth discount significantly reduces investment requirement
KEY PARAMETERS
Slide 15
PREFINAL VERSION 7
Required financing not yet secured
Barely existing organisational setup (esp. infrastructure and staff)
Level of complexity (B2B and B2C)
Huge market potential in CEE
Window of opportunity to take up market share due to low degree of competition
New technology (Ka-band spot beam) enables competitive bandwidth costs for satellite internet
Political support to close the digital divide
Long technology cycles in satellite business
TIMELINE & SWOTKEY MILESTONES & SWOT ANALYSIS
Marketing approach using B2B business as multiplier and enabler to reach B2C
Strong partners for market penetration
Attractive bandwidth sourcing conditions due to high bargaining power
Extensive experience in satellite internet industry and broadband market
Qualified, experienced, and highly-motivated management team
Price purge and/or higher innovation speed in alternative technologies
Cost and complexity of CPE self-installation
Low customer awareness of satellite tech
Delay or cancellation of satellite launch
Development of terrestrial broadband infrastructure (DSL, cable, wireless)
SWOT ANALYSIS
NetSatOne company established, EBRD shows strong interest to participate in project (February 2010)
Signed strategic partnership contract with Avanti (March 2010)
Launch of HYLAS1 satellite (November 2010)
Funding process completed and set-up of subsidiaries (November 2010)
Launch of marketing campaign, system operational (November 2010)
First customer (January 2011)
EBITDA positive (September 2012)
Launch of HYLAS2 satellite (August 2012)
1
2
3
4
5
6
7
8
2010 2011 2012 2013 20141 2 3 4 5 6
20157 8
WAVE 1: Jan-2010
WAVE 2: Sep-2011
WAVE 3: Oct-2012
PL, RO, HU, HR
SK, RS, BG
TR, UA
KEY MILESTONES SWOT ANALYSIS
The Vision Investment Highlights Market Potential
TechnologyThe Partners Business Model
The Product Financials
Timeline & SWOTBackground
Slide 16
PREFINAL VERSION 7
NETSATONE TEAM DEDICATED SECTOR EXPERTS
Sven DonhuysenChief Sales Officer
Utz Christoph WilkeChief Marketing Officer
Detlef MihokChief Technical Officer
With more than 10 years in the industry Sven is a long term expert in the telecommunication market
He is a successful entrepreneur in the telecommunication business and has founded several multi million Euro companies around the global distribution
Sven is a long term expert in creating unique new products for the market
His personal focus lies in marketing & sales including online and offline distribution. His specialityin sales is to find the right strategic partners through his network
Additionally, Sven also has long term experience in fund-raising and business development
Utz works for Filiago as Managing Director and Founder.
Before he founded the Filiago, he supported a variety of companies in the business development, marketing and strategic co operations as well as M&A and Post Merger Integration especially in the telecommunication market
Utz brings with him seven years strategic and operative management experience gained during building up Filiago
He holds a Master of Science in Economics
Detlef works for HETAN as Technical project Manager / CTO since January 2010
Prior to HETAN he worked in a variety of R&D and Satellite Services companies in different responsible positions in Sales, Software & Hardware & System Engineering, Product Development, Project Management, Operation and Field Service
He brings with him 30 years experience in design, implementation and operation of soft- and hardware development, project management, satellite communication systems, IP networks and internet services
He holds an Dipl. Ing. in IT System Engineering
Jörg SchmolinskiChief Executive Officer
Jörg works for HETAN Technologies GmbH as Managing Director and founder
Prior to this, he spent several years working as management consultant for international companies, including an incumbent telecom company in Eastern Europe were he acted as interim CEO
Jörg gained substantial experience in the telecommunication industry whilst working for a leading consulting company (JV of Deutsche Telekom and France Telecom)
After that he held management positions with telecommunications operators in various countries
He holds an Dipl. Ing. in Telecommunication Engineering
.
Thorsten HirsemannDeputy Chief Financial Officer
Thorsten works for HETAN as Authorized Representative Manager for financials and operations since the foundation of the company
Before he joined HETAN, he worked in a variety of media and telecommunication companies in responsible positions
He brings with him five years experience in satellite internet gained during his time as a Manager at TELES AG (skyDSL)
Slide 17
PREFINAL VERSION 7
Raiffeisen Investment AG
Krugerstraße 13A-1015 ViennaAustria
T: +43 (0) 1 710 54 00 – 160 F: +43 (0) 1 710 54 00 – 169 [email protected]
Peter Köhler Matei Filipidescu
Director Associate Director
T: +43 (0) 1 710 5400 146
M: +43 (0) 664 627 5346
T: +43 (0) 1 710 5400 206
M: +43 (0) 664 627 2763
FOR FURTHER INFORMATION PLEASE CONTACT:
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