David cullen its technology

DGCNECT Round Table Meeting6th November 2014 Brussels

David Cullen, Director ITS Technology Group

Investing With Communities

Who Are ITS Technology Group?

Our Footprint Delivering Value and Customer Excellence

BackgroundPrivately owned

company with a heritage

spanning 17 years

Coverage

Activities spread across

2 countries with 7 offices

ITS Technology Group Limited

City Serve Limited

ITS Hammersmith & Fulham Limited

ITS Telecoms Solutions Limited

Glasgow

London

HQ Runcorn Nottingh

am

Redcar

Manchester

Canadian Entity Focused on

FTTH

ITS Canada Inc

ITS CanadaInc

Includes Group acquisition of Networks by Wireless (Sept)

Networks

Telecoms

IT Man-aged

Services

• Audit, Design, Consultancy, Build & Operate

• Maintenance & Support• Fixed / Wireless LAN /

WAN Fibre Optical Licenced / Un-

licenced Ethernet Guest Wi-Fi

• Rural and Urban • Public / Guest Wi-Fi• P2P and P2MP • Addresses Digital

Inclusion• Wholesale Telco Access• CCTV (Fixed and

Wireless)• Security Monitoring

• Audit & IT Health Checks• IT Service Desk

Desktop, Server, WAN/LAN Support

• Enterprise Cloud Solutions; Hosted Exchange Office 365 Share Point Dynamics CRM Lync

• Hardware Config & Delivery

• Data Backup & Recovery• Enterprise grade Security• Partner Delivery• Systems Integration

• Unified Comms• VoIP & Hosted Telephony• Non Geographic Numbers and Calls• ADSL/SDSL/Fibre/EFM/Leased Lines• Line Rentals & Call Saving Packages• Mobile Office Solutions & Lync • Mobile Communications across all

Networks

ITS Technology Group Service Offerings

One vendor, one point of contact which mitigates

operational & commercial risk

Variety of models, we can prime, sub contract, design, build, consult or just support

Rapid deployment with our in house design , delivery &

support team

Project based finance – up to 100% of the project costs

available

We design, build & support your complete ICT estate

One Solutio

n

Impressive Client

List

Funding

Models

Agility &

Creativity

Engagement Models

Network & IT Estate

Our client list is impressive & our partners list is solid which all testifies to our credibility &

customer excellence mantra

.

.

.

.

Why Choose ITS Technology Group?

Design Build Finance and Operate (DBFO)Open Access Fibre and Wireless Networks

in partnership with local authorities and communities

We look to establish ‘Bridgeheads’ in municipalities or communities where we can demonstrate an affordable and sustainable business case- and the capability to expand.

Three Key Criteria that indicate a sustainable bridgehead:

Active Engagement

• A community or local authority actively involved and passionate about creating social and economic benefit from broadband

• Clearly defined and respected Champion(s) leading the initiative

(Re-)use of Assets

• Available infrastructure (e.g. ducts, land, buildings, power) to reduce the capital cost of civil construction

• Available funds as investment where assets are needed

• Available resources to reduce labour costs

Demonstrable Anchor Tenancy

• Community commitment to take service (contracts/ shareholding, subscriptions)

• Adoption by local services (school, GP surgery etc)

• Transit links for mobile operators etc

What do we look for?

Direct Asset Co:

• FibreGarDen rural FTTP scheme in Cumbria

• Digital Teesdale: rural wireless scheme in Teesside

• CityServe: wireless scheme serving socail housing, business parks etc in deprived areas of East Manchester

Concession Approach:

• London Borough of Hammersmith & Fulham• 17km of CCTV duct

expanding to >40km

• 10 year concession to develop NGA

• Separate entity for joint exploitation/ investment

• 4 other authorities in London and other regions looking to adopt the mode

Other Public/ Private Partnerships:

• South Wales Fire & Rescue: wireless scheme using network for fire stations to provide ‘NGA hubs’

• Oldham: NHS network linking hospiitals and medical centres, expanding to provide NGA

Typical Commercial ModelsWe engage with the municipality or community using an

Asset Co/ OpCo approach either directly or through a Concession Agreement for use of their assets:

ITSOpCo:

Project Mgrand

Service Integrator

Infrastructure construction

Implement Support Systems

Active equipment

provider

ITS Technology Group and Partners:

roles in implementation and operation

Income from ITS to partners for plant, equipment and implementation support

Capital costs for network build and rollout

Investment from:• Local Municipality (as funds and

assets)• Other public sector partners• ITS (services and funds)• Risk Capital Funds ( at early

stage)• Infrastructure Funds ( at

maturity)Joint Venture

AssetCo:Joint investment and

ownership

Capital receipts

Implementation of infrastructure in line with the requirements and objectives of

the Investors- by Investors

The AssetCo/ OpCo Relationship: Funding and Capital Flows

Monthly service income from JV to ITS for:• Customer Svce Desk• Configuration mgt• Maintenance support

Wholesale network charges for services provided over infrastructure

‘Asset charge’ for use by other service providers

Infrastructure maintenance

Support Systems

Active equipment

maintenance

ITSOpCo:

Project Mgrand

Service Integrator

Joint Venture AssetCo:

Joint investment and ownership

Public Sector

Public sector retail charges direct to AssetCo operating as a Public Sector ISP/ aggregator

Income from ITS to partners for support and maintenance services

Monthly income from business and residential users of services provided over

infrastructure

Dividend Returns to Investors

A flexible commercial model to allow maximum opportunity for anchor tenancy capture

The AssetCo/ OpCo Revenue Flows

Internet Service Providersinc. ITS Managed Services

A Concession Contract to Commercialise the duct assets in London’s largest Borough to provide high-

speed fibre networks The Challenge

London Borough of Hammersmith & Fulham have CCTV and Traffic Control networks that use Council- owned ducts.H&F wanted to commercialise these to assist in bringing next generation access to businesses and citizens

The Solution

ITS Technology Group secured a 10 year exclusive concession agreement with H&F, to use the existing and all future ducts for deployment of a Fibre to the Premise (FTTP) solution and operation of a wholesale ultrafast broadband network

The Results

• £11m projected revenue to H&F (£2m guaranteed)

• Citizens and businesses have access to high quality, affordable NGA

• Open Access network attractive to ISPs and other network operators

• Leading model now being adopted by other authorities

“LBHF are proud to be part of such a ground breaking and innovative working relationship with ITS. Digital transformation is a key driver within our borough supporting residents and

encouraging businesses alike.ITS and LBHF are culturally aligned in both our working style and ambitions for digital and we

look forward to a successful working relationship.” Sharon Bayliss, Director for Customer and Business Development, Hammersmith and

Fulham Council

Hammersmith & Fulham

Hammersmith Duct Network

FibreGarDen

Intended network hub (PoP)

540 premises connected over a 71km FTTP network

Rollout from October 2014 to November 2015

Pricing

BT Equivalent

Infinity 1 Infinity 2

Download Speed

Up to38Mb/s

Up to76Mb/s

Upload Speed

Up to9.5Mb/s

Up to19Mb/s

Usage Limit 20 GB Unlimited

Contention 20:1? 20:1?

Monthly Line Rental

£17 £17

Monthly Service Cost

£15 £26

Total Monthly Cost

Inc VAT

£32 £43

Fibre GarDen

Basic Enhanced

Download Speed

30Mb/s 100Mb/s

Upload Speed

30Mb/s 100Mb/s

Usage Limit 40 GB Unlimited

Contention <20:1 <20:1

Monthly Network

Rental

£25 £42

Monthly Service Cost

£0 £0

Total Monthly

Cost Inc VAT

£30 £50

FibreGarDen Funding Mix and Value

Total Build and working capital: c.£1m

Typical Market Value of built and operating network: c.£3m

DWi (Reg 31)WRAS

D Series T SeriesThe Atlantis Hydrotec System

Up to 500mPer run

Atlantis Hydrotec Domestic ‘D Series’A Tested and Certifiedend-to-end solution………

• Requires only a small pit at each end to access the water supply pipe

• ISP simply removes end-stop at boundary, connects to micro-duct tail and installs blown-fibre through to the demarcation box at the premises

• Premises demarcation box includes a gas-block device

• Easy install regardless of driveway construction, type or length

• Typical one to two hour install for any length of run

• Certified installer training

MDUs and Business/Retail Parks

PTP Microwave and Satellite Links

Rural Communities – Broadband and ISP services

Mobile Phone Cells/Masts

Valve by-pass & fibre break-out locations

Atlantis Hydrotec Transmission ‘T Series’

The AssetCo structure provides an ‘easy to understand’ vehicle for other investors/ investments

Project Based Capital/ Social Investment• Short term risk capital to assist in ‘kick starting’ the business model• Clear objectives of the AssetCo• Identifiable returns/ increase in value• Identifiable social objectives owned by the AssetCo shareholders• Short- term exit ( 1 to 5 years)

“We had to overcome several obstacles during the establishment of our new network infrastructure and ITS have delivered these with no downtime or

loss of email connectivity which was key to us at the time. We would highly

recommend ITS”.

Oliver Lightowlers, Chief Financial Officer

Investment Requirements

‘Patient’ Infrastructure Funding• Long term capital for secure, stable business activities• Transfer/ purchase from project funders above• ‘Guaranteed’ returns on low risk, long term investment• Long term exit/ annuity value (10 to 25 years)

Loans or Grants• AssetCo model allows for debt and equity financing• Loans work better but Grants can be incorporated as long as associated

outputs can be owned by the AssetCo shareholders

The more capital offered into AssetCo’s = the more alternative networks ITS can undertake simultaneously.

Thank You

Email: [email protected]

Thank You

ITS’ Offices:

Head Office: The Heath Business & Technical Park, Runcorn, Cheshire WA7 4QXLondon Office: 2 Bloomsbury Street, London, WC1B 3STNorth East Office: The Wilton Centre, Wilton, Redcar, Cleveland, TS10 4RFScotland Office: Standard Buildings, 82 Gordon Street, 94/102 Hope Street, Glasgow, G2 6PHMidlands Office: Heritage House, Soloman Road, Cossall Industrial Estate, Ilkeston, Derbyshire, DE7 5UDCanada Office: 12966 Carluke Cres, Surrey, British Columbia, V3V 6R4, Canada

Visit: www.itstechnologygroup.com

Tel: 0844 856 9966

Typical USA/ Canada Cost Savings

Typical USA/ Canada Cost Savings

Typical USA/ Canada Cost Savings