For a FTTH infrastructure operator in Eastern France, we performed a commercial due diligence of the mass and enterprise markets as well as potential new services

The problem

• In 2016, the consortium of NGE, Altitude Infrastructure, CDC and the fund Quaero Capital won the contest to manage the public initiative network (PIN) for the Alsace region of France. As a result, the consortium created Rosace as a special-purpose vehicle (SPV) to manage the PIN
• In light of significant developments in the market (notably the evolution of retail operators’ market strategies), the management and shareholders of Rosace had updated their business plan and intended to refinance the SPV’s debt. As such, Analysys Mason was commissioned to perform commercial due diligence

The solution

• Our due diligence was structured around three key aspects:
  • a presentation of the fibre-to-the-home (FTTH) market in France, focusing on the French regulatory context as well as the market trends
  • a review of Rosace’s business plan for the mass and enterprise markets, with a particular focus on:
    • revenue drivers: wholesale tariffs, commercial operator strategies, take-up and penetration assumptions, as well as the access mode by commercial operator
    • associated opex and capex, including subsidies and royalties
  • a quantification of potential new services that Rosace was planning to offer in the near future using its FTTH infrastructure
  • its business plan centred around providing connectivity to various objects (e.g. CCTV cameras), as well as software and data-centre services

Figure: Evolution of CCTV cameras in 50 largest French municipalities between 2013 and 2019 (cameras per 100 000 inhabitants)

The result

• Our due diligence report was used by Rosace to successfully refinance its debt
• In addition, Rosace’s parent company Altitude Infrastructure THD used our report for equity purposes