Commercial due diligence of Project Asterix on behalf of Vauban Infrastructure Partners

The problem

• In late 2019, Bouygues Telecom launched a new project called Asterix. Its aim is to co-invest in French fibre networks in medium-density areas where Orange is rolling out infrastructure using its own funds
• Once Asterix co-invests in the Orange network, Bouygues Telecom (and potentially other retail operators) will provide rental access to Asterix
• To realise this co-investment, Bouygues Telecom has decided to partner with an investment fund

The solution

• Analysys Mason was commissioned by Vauban Infrastructure Partners to conduct commercial due diligence of Project Asterix
• We reviewed the regulatory context, focusing on French medium-density areas and analysing the market trends as well as the project contract structure
  • in particular, we conducted economic analysis to compare the approaches of co-investment and rental over the Orange fibre-to-the-home (FTTH) network, in order to help Vauban Infrastructure Partners optimise its offer
• We reviewed Bouygues Telecom’s business plan and provided our own revenue, opex and capex forecasts of the Orange sub-networks that fell within Project Asterix’s scope
• We focused on Orange roll-out plans and Bouygues Telecom take-up curves (migration from standard broadband to fibre), as well as potential commercialisation to retail operators other than Bouygues Telecom
• In addition, we analysed how the Covid-19 outbreak affected H1 2020 roll-out and commercialisation figures, and provided a revised business plan

Figure: Project Asterix contract structure

The result

• At the start of 2020, Bouygues Telecom informed Vauban Infrastructure Partners that it had been selected to create the joint venture (JV). We provided additional support to close the deal, including Q&As sessions with Bouygues Telecom, a business plan update and a document review 
•  In April 2020, Bouygues Telecom and Vauban Infrastructure Partners announced the creation of a special purpose vehicle (SPV) named SDAIF,¹ which will invest over EUR1 billion in Orange fibre networks over the next four years

¹ Société de Développement pour l’Accès à l’Infrastructure Fibre