DG Connect - INCA Round Table 06-11-14 Investment Models Broadband, ftth, wireless, rural, urban, nga

1. James Enck
Corp. Development & IR

2. CityFibre overview
Presentation to DG Connect
Slide 2
Dundee
Newcastle
Ayr
Sheffield
Bath
BOURNEMOUTH
Fibre to the
Home Network
Kirklees
A Builder of UK Gigabit Cities
• Designer, builder, operator & owner of city-wide
shared fibre optic wholesale network infrastructure
(Stokab in Stockholm is probably the best
reference point)
• CityFibre Infrastructure Holdings PLC
• Created via acquisition in 2011
• £46.5m equity raised to date (AIM: CFHL)
• Strong institutional investor base
• Gigabit Cities in deployment:
• York, Peterborough, Coventry, Aberdeen
• Network presence in 57 conurbations
• Largest FTTH network in UK in Bournemouth
A shared infrastructure model entirely
independent of BT Openreach

3. Contract-based, shared infrastructure model
High returns on
incremental
capex
Shared infra
delivers better
economics for
partners
Presentation to DG Connect
Slide 3
• Consumers (FTTH)
• Small Businesses
• Mobile Cell Sites
• Big Businesses
• Public WiFi & CCTV
• Public Sector Sites
Anchor contract
partially de-risks
ROI

4. Contract-based, shared infrastructure model
Anchor contract: 5 - 20 year agreement for initial fibre network
covers 50 - 100% of build costs, but uses less than 5% of the network capacity
Upsell: Local Authority Upsell: Businesses & Mobile Upsell: Consumer FTTH
 Contract and network grows
as more public services are
added: schools, NHS, council
sites, CCTV etc.
 Incremental networks growth
for significant returns by
targeting close proximity
mobile masts, data centres
and SMEs
 ISPs take CityFibre to the
home as consumer media
suppliers need faster internet
speeds to sell
Source: CityFibre GIS data Source: CityFibre GIS data Source: CityFibre GIS data
Presentation to DG Connect
Slide 4

5. Progressing towards a highly scalable footprint
• CityFibre’s approach is gaining support from many large consumers of infrastructure, across all market segments
• Our 5 current projects provide an addressable footprint of >500,000 homes
• Anchor opportunities are accelerating; Local authority & government support is increasing
Indicative: Assumes typical UK city with 100,000 homes, 7,000 businesses and 500 public sector sites
200 mobile cell sites per city, (small cells at 3:1 ratio of macro cells)
Gigabit Cities
Shared Infrastructure
Public Sector Sites
(Cumulative Addressable)
Addressable Mobile Cell
Sites (Cumulative)
Macro Cells [Small Cells]
Addressable Businesses
(Cumulative)
Addressable Homes
(Cumulative)
5 Cities 2,500 1,000 [3,000] 35,000 >500,000
10 Cities 5,000 2,000 [6,000] 70,000 1,000,000
15 Cities 7,500 3,000 [9,000] 105,000 1,500,000
20 Cities 10,000 4,000 [12,000] 140,000 2,000,000
25 Cities 12,500 5,000 [15,000] 175,000 2,500,000
Partners / Potential
Partners
Indicative Contract Term 5 - 20 years 10 years 3, 5 or 7 years 10 years +
Presentation to DG Connect
Slide 5

6. City of York – Proving the model
Anchor contract a solid foundation
 Went live 2011, connecting 105 education and council sites
 10 year initial contract: £4.2m contracted revenue (TCV)
 Network build: £4.5m for 94km network (94% TCV/capex)
Incremental business shows increasing operating leverage
 Additional £2.2m (+52%) of contracted revenue added since anchor –
with incremental capex of only £0.97m (229% TCV/capex)
 £426k TCV added in H1, vs. capex of £114k (TCV/capex of 373%)
 £700,000 current annual run-rate revenue, 93% gross margin
FTTH JV on track and moving forward
 JV with Sky and TalkTalk to deploy FTTH city-wide progressing
 Fujitsu construction contract signed, in deployment
 First residential customers expected to be connected in mid-2015
YORK
Presentation to DG Connect
Slide 6

7. Expansion cities update
 Build on schedule and on budget for completion December 2014
 30 out of 106 planned council sites already live with services
 25% of businesses pre-registered for services, 40+ converted to contract
 Acquisition of 180km network closed 3 June, rebranded as Coventry CORE
 “Gig Up” demand aggregation campaign launched in June
 Over 220 businesses pre-registered to date
 Announced 11 August, 72km build to connect 176 public sector sites
 First contract win with PSN accredited partner Easynet
 First PSN procurement to employ significant dark fibre solution
 Announced 3 September, partnering business ISP, Internet For Business
 Contractual commitment to upsell/migrate existing customers, 50km initial
build of potential 120km
 A UK economic powerhouse
 No Virgin Media presence
KIRKLEES
Presentation to DG Connect
Slide 7

8. Thank you