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Investor presentation

Investor presentation. December 2003. The Short Story. December 2003. Transaction highlights. Transaction details. Use of Proceeds. Further broadband access growth

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Investor presentation

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  1. Investor presentation December 2003

  2. The Short Story December 2003

  3. Transaction highlights Transaction details Use of Proceeds • Further broadband access growth • Assuming vertical integration with careful additional investments in new LEOs (horizontal expansion/co-location of equipment), NextGenTel intends to continue investing in new customers by adding necessary new equipment, in order to reach its customer targets. • Investments in IP Telephony • NextGenTel plans to launch IP-telephony in 2004 • Other investments and general corporate purposes • Other investments may include new products and services, new sites at co-located LEOs and investments to expand NextGenTel’s content platform.    • Strengthening of balance sheet • NextGenTel intends to reduce interest-bearing elements of short term debt   • Price per share: NOK 25 - 40 • Market Cap before issue: 500m – 800m • New Shares Issued: 4,5m – 5,5mIncluding greenshoe (500’ shares) • Gross offering proceeds: 112 - 220 mNOK • Secondary Sale of shares 749’ – 1.150’ • Current no. of shares outstanding: 20m • Subscription: 25/11 – 8/12 at 17.00 • Allocation: 9/12 • First day of trading: 19/12

  4. NextGenTel is perfectly poised to benefit from this huge growth opportunity: Copper is gold … Platform for existing and future broadband access solutions No digging .. Norway has a strong and effectively regulated LLUB regime DSL is set to win the broadband race in Europe xDSL grows much faster than all other broadband technologies as it is the most cost effective way to offer broadband to the mass market Fast growing mass market Recurring revenues with strong path to profit based on access alone. Strong future additional revenue possibilities related to additional products/services with marginal costs: Telephony (based on IP) Video on demand (already offered) Web TV, etc. (already available) Reduced marginal investments required as technology improves and costs drop Complete network built with more than 58,000 customers at present.. Sustainable #2 position in the Norwegian broadband market This position is important to sustain growth and maximum profitability A strong player in both the residential and the corporate market Strong acquisition candidate The NextGenTel evolution has lots of similarities to that of NetCom Challenge is to secure a growth from 60,000 – 200,000 subscriber lines over the next four – five years ! Broadband – one of the fastest growing telecom segments in the world …

  5. xDSL - the most cost effective way to offer broadband to the mass market The most cost effective way to offer broadband to the mass market is to base the solution on existing infrastructure: • The future is Copper-based • xDSL today provides for solutions based on ADSL and SHDSL • VDSL (Ethernet over Copper – LRE) will be next wave for short haul applications (< 1.5 km – 10 Mb/s) • Copper has the widest coverage in Europe • Marginal investments expected to continue dropping • In combination with existing copper infrastructure and existing telephony services, NextGenTel is building / offering its broadband solution to both the residential and corporate market: • DSL-based • Extensive use of partners • 3rd party financing (leasing) • IP all the way home: • Router based Source: McKinsey & Company 2000

  6. An IP-based Next Generation Telecommunications Network NextGenTel has aimed at building a Next Generation Telecommunications network: • IP-based • “Plug&Play” access technologies • Fewer components • Strong back-bone / Fibre-based (rented) • Less hierarchical network Experienced development in costs/investments (not precise)

  7. xDSL: Set to win the broadband race....... Strong expected future growth: • The broadband market is expected to grow strongly during the next 3 - 4 years • Early movers: 2000 – 2002 • Mass market adoption: 2003  • Norway is among the fastest growing xDSL nations in Europe (Forrester: 45% penetration in 2008 • DSL dominates in Norway, the Nordic Countries and in Europe: Source: Post og Teletilsynet (Norway) Source: Norsk Telecom & various others

  8. High potential – more than 1 mill. broadband lines in 2008 ? High potential for DSL: • ~ 650,000 – 900,000 subscriber lines in 2008. • Telenor estimates to have 500’ - ‘ 600’ xDSL subscribers within 2008. • Given sustained market share of ~22-25%, this implies 145’-180’ subscriber lines for NextGenTel in 2007 - 2008. • Further upside in future broadening of offerings (VDSL, VoD, Telephony, etc.). • ADSL > ISDN; ADSL follows similar growth as that experienced for ISDN and could have a much bigger potential • Main drivers: • Faster Access • Fixed price • Free usage • Entertainment Serv. • Online gaming Source: Ovum Source: Norsk Telecom

  9. Business model ensuring profitability on access alone …. • A holistic approach to the exciting broadband market: • Access • ISP • Services: • VPN, etc. • Contents (facilitator): • V-o-D, etc. • Future offerings: • Telephony, etc. • Always On – Fixed Price – Faster ! • Best price/performance … • Free usage … • Speed … • Router (incl. features & functionality) • Competitive offerings to: • Residential market • Corporate market • Low cost volume marketing & sales channels (Web and Call Centre) • The broadband experience …

  10. Best price/performance: Pure IP based solution Powerful router solution Free use (no download limitations) Higher bandwidth (704  850 kb/s / 3 x up-stream compared to competition) V-o-D / live web TV streaming The focus on both residential and corporate users gives; Market availability Volume (scaleability) / Logistics (LE home offices) Holistic service development for the networking community Shorter path to profitability (aggressive cost base) NextGenTel’s product leadership

  11. Selected milestones & achievements • Raised approx mNOK 320 in equity • Extreme focus on execution (processes & measurements) • Selected milestones: • Cisco strategic partner fall 00 (equipment financing) • 10.000 lines in operation Jan 02 • IBM strategic partner spring 02 (Services, equipment financing) • 20.000 lines in operation June 02 • EBITDA positive in Q3 – 2002 (monthly) • ~35.000 lines in operation December 02 • ~ 44.000 lines in operation March 03 • ~ 58,000 lines in operation October 03 • Major corporate home PC agreements • Strong improvement in earnings through 2003 and in estimated future earnings • Proven business model, recurring revenue, limited downward risk

  12. NextGenTel is the major challenger to Telenor … • Sustained installation pace of approx. 4,000 gross lines per month • ~160 LEOs / COs in operation / Approx. 850,000 subscriber lines reached • In addition, 350,000 – 500,000 lines reached via Telenor Wholesale agreement • > 25 % market share (compared to Telenor – increased in Q3-2003 to 26.8 %) • 139 employees (f.t.eq.) • Offices in Bergen, Oslo, Trondheim, Kristiansand and Stavanger. • ~ 11 % SME customers (lines) • ~ 89 % Residential customers (lines) • ~ 30 % of revenue generated by SMEs Facts Market share vs. Telenor Source: NextGenTel & Telenor NextGenTel’s ambition is to sustain its # 2 position

  13. Favourable market position …. • NextGenTel has a favourable market position: • First mover in Norway (rapid growth) • Clear # 2 broadband and DSL player in Norway(> 20 % overall DSL market share, > 18% overall broadband market share) • NGT covers approx. 50% of Norwegian households (own network ~45%) • Attractive player in a Nordic consolidation • Strong anticipatedgrowth (low overall penetration in Norwegian market (11% Vs 65% coverage) Source: Norsk Telekom Source: PT

  14. NextGenTel – Owners / Board of Directors NextGenTel Holding ASA – proforma shareholder structure Board of Directors: • Bjørn Stray, Partner, Northzone Ventures, Chairman • Arve Johan Andresen, Partner, Northzone VenturesDifferent Northzone investment units owns approximately 26% of the shares in NextGenTel • Lawrence Lepard, Partner, Geocapital Partners. Different Geocapital investment units own approximately 31% of the shares in NextGenTel  • Eric Huygen, Independent board member. Huygen owns approximately 0.3% of the shares • Fritz Rieber, Borea. Borea owns approximately 9% of the shares in NextGenTel. In addition, Mr. Rieber personally owns approximately 2% of the shares in NextGenTel • Bengt Thuresson, independent board member • Olav Stokke, CEO NextGenTel. • Lars Erik Larssen, CFO NextGentel • Mr Stokke and Mr Larssen together with the founding partners of NextGenTel owns approximately 11% of the shares in NextGenTel

  15. Income Statement

  16. Balance Sheet and Cash Flow

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