Valuation of telecommunication assets in sub-Saharan Africa Aude Schoentgen To cite this version: Aude Schoentgen. Valuation of telecommunication assets in sub-Saharan Africa. Economics and Finance. Télécom ParisTech, 2015. English. NNT : 2015ENST0010. tel-01502810 HAL Id: tel-01502810 https://pastel.archives-ouvertes.fr/tel-01502810 Submitted on 6 Apr 2017 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. N°:N° : 20092 00 9 ENAMEN AM XXXXXX XX 2015-ENST-0010 EDITE ED 130 Doctorat ParisTech T H È S E pour obtenir le grade de docteur délivré par Télécom ParisTech Spécialité “ Sciences Economiques & Sociales ” présentée et soutenue publiquement par Aude SCHOENTGEN le 12 mars 2015 La valorisation des actifs télécoms en Afrique sub-Saharienne Directeur de thèse : Laurent GILLE T Jury M. Denis LESCOP , Telecom Ecole de Management Rapporteur H M. Alain RALLET, Université Paris Sud Rapporteur M. David BOUNIE , Telecom ParisTech Examinateur M. Nezih DINCBUDAK , Orange Examinateur È M. Michel ROGY , Banque Mondiale Examinateur M. Laurent GILLE , Telecom ParisTech Directeur de thèse S E Télécom ParisTech école de l’Institut Mines Télécom – membre de ParisTech 46, rue Barrault – 75634 Paris Cedex 13 – Tél. + 33 (0)1 45 81 77 77 – www.telecom-paristech.fr La valorisation des actifs télécoms en Afrique sub-Saharienne RÉSUMÉ : Deux problématiques ont été peu explorées dans la littérature économique et managériale: - les méthodes d’évaluation des opportunités d’entrée et d’investissement par un opérateur télécom international, - le cas du continent africain comme destination de ces investissements, qui fait l’objet de beaucoup d’intérêt de la part des grands opérateurs internationaux. La thèse porte sur les investissements étrangers en Afrique dans le secteur des télécoms, en s’intéressant à deux modes d’entrée: l’acquisition d’une licence et le rachat d’un opérateur installé. Son objectif est de montrer dans quelle mesure les facteurs locaux, liés au pays d’accueil de l’investissement et à son marché télécom local, ont un impact sur la valorisation de ces investissements en Afrique sub-Saharienne. La thèse couvre la question de l’intérêt stratégique de ces investissements, les méthodes pour estimer ces opportunités, ainsi que la nature des différents facteurs à considérer dans cette estimation. Une base de données a été développée, rassemblant les transactions effectuées par les principaux opérateurs multinationaux en Afrique sub-Saharienne sur la période 2000-2010. Plusieurs analyses quantitatives ont été menées à partir de cette base de données, afin d’identifier les déterminants des prix de ces transactions. La thèse montre le manque de régularités et de rationalité dans les prix des transactions du secteur télécom sur le continent. Mots clés : actifs télécom, licences mobiles, fusions-acquisitions, valorisation, prix, Afrique Valuation of telecommunication assets in sub-Saharan Africa ABSTRACT : There is still scant knowledge in the economic and international business literature regarding two issues: - Valuation methods of modes of market entry and of investment by an international telecom operator, - The case of Africa as a host continent for these investments. The thesis deals with foreign investments in Africa in the telecom sector, focusing on two entry modes: license awards and acquisitions of local operators. Its objective is to demonstrate on what extent « local » factors (related to the host country and its local telecom market) have an impact on the valuation of these investments in sub-Saharan Africa. This work covers the issues of the strategic interest of these investments, the methods to valuate these investment opportunities, as well as the different factors to take into account in this valuation. A database has been developed, gathering all deals made by multinational operators in sub- Saharan Africa over 2000-2010. Several quantitative analyses have been conducted as from this corpus, in order to identify the determinants of deal amounts. This work demonstrates the lack of regularity and rationality in deals’ prices of the telecom sector in Africa. Keywords : telecommunication assets, mobile licenses, M&A, valuation, price, Africa AVERTISSEMENT Télécom ParisTech n’entend donner aucune approbation ou improbation aux opinions émises dans les thèses. Les opinions émises dans cette thèse doivent être considérées comme propres à leur auteur. 3 This thesis is dedicated to E. and M. 4 ACKNOWLEDGMENTS I would like to express my sincere gratitude to my advisor, Professor Laurent Gille (Telecom ParisTech), for having trusted me despite the geographic distance between us, for his continuous guidance and support in this research, for his respectful approach and his constructive criticism. I would like to thank the members of the jury for having accepted to assess my thesis: David Bounie (Telecom ParisTech), Alain Rallet (Paris Sud University), Denis Lescop (Telecom Ecole de Management), Michel Rogy (World Bank) and Nezih Dincbudak (Orange). Thank you to Yann Burtin (MIGA, World Bank Group), Cheikh Baye Cheikh (Mauritania Regulation Authority), Nezih Dincbudak (Regulatory affairs, Africa Middle East & Asia, Orange), Sidy Diop (Microeconomix), Dominique Saint-Jean (former CEO Orange Kenya), Emmet Kelly (Morgan Stanley), Omar Maher (EFG Hermes) and Kader Ouro-Agoro (Togo Regulation Authority). This work strongly benefitted for your comments and advice. Thank you to Joëlle Toledano and Pierre-Jean Benghozi. This work benefitted from your comments at mid-term evaluation. My very sincere thanks to Jonathan Zelmanovitch (M&A, Orange) for sharing his professional insights, for his continuous support throughout all these years and for his friendship. I thank my family and friends for their support during these years. Special thanks to my great and loving brother Bertrand for his support and his continuous advice. Finally, I am deeply thankful to my partner Julien for his patience and his unconditional support and care. Thank you for rekindling my dreams. This would not have been possible without you. Thank you. Aude S. December 2014 5 ACRONYMS ADSL Assymetric Digital Subscriber Line ARE Autorité de Régulation de Mauritanie (Mauritanian Regulatory Body) ARPU Average Revenue Per User ARTP Autorité de Réglementation des Télécommunications et des Postes (Togolese Regulatory Body) BB Broadband BTS Base Transceiver Station CAGR Compounded Annual Growth Rate CAPEX Capital Expenditures CAPM Capital Asset Pricing Model CAR Central African Republic CC Control of Corruption (WGI) CDMA Code Division Multiple Access CFAF CFA Francs COFACE Compagnie Française d’Assurance pour le Commerce Extérieur CPI Consumer Price Index CST Communication Service Tax DCF Discounted Cash Flow DJTTEL Dow Jones Telecommunications Titans 30 Index DRC Democratic Republic of Congo EBIT Earnings Before Interest and Taxes EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization ECA Export Credit Agency ECGD Export Credits Guarantee Department EDGE Enhanced Data Rate for GSM Evolution EFI Index of Economic freddom EMTS Emerging Markets Telecommunications Services (Nigerian operator) ENPV Expended Net Present Value EV Enterprise Value FCF Free cash Flow FCPA Foreign Corrupt Practices Act FDI Foreign Direct Investment GDP Gross Domestic Product GE Government Effectiveness (WGI) GPRS General Packet Radio Service GSM Global System for Mobile Communication GSMA Groupe Special Mobile Association HIV Human Immunodeficiency Virus HSDPA High Speed Downlink Packet Access 6 HSUPA High Speed Uplink Packet Access ICRG International Country Risk Guide ICT Information and Communication Technologies IMF International Monetary Fund IRR Internal Rate of Return IRS Interest Rate Swap IT Information Technologies ITU International Telecommunication Union JV Joint Venture LTE Long-Term Evolution M&A Mergers and Acquisitions MDF Main Distribution Frame MHz Megahertz MIC Millicom International Cellular (Millicom Tigo) MIGA Multilateral Investment Guarantee Agency MNC Multinational Company MNE Multinational Enterprise MRO Mauritanian Ouguiya (currency) MTC Multinational Telecommunication Company MTN Mobile Telephone Networks (South-African operator) NHIL National Health Insurance Levy NPV Net Present Value OECD Organisation for Economic Cooperation and Development OLI Ownership, Location and Internationalisation OPEX Operational Expenditures P&L Profit and Loss statement PCA Principal Component Analysis PGR Perpetual Growth Rate POS Point of Sales PRS Political Risk Services PV Political Stability and Absence of Violence/Terrorism (WGI) R&D Research and Development RL Rule of Law (WGI) ROV Real Option Value RQ Regulatory Quality (WGI) SEC Security Exchange Commission SFR Société Française du Radiotéléphone (French operator) SIM Subscriber Identity Module 7 SMS Short Message Service sSA sub-Saharan Africa TGR Terminal Growth Rate TV Terminal Value ULL Unbundled Local Loop UMTS Universal Mobile Telecommunication System USA United States of America USD United States Dollars VA Voice and Accountability