Page 43 - Trends in Telecommunication Reform 2016

Box 1.9: Key lessons: Google Fiber (Uganda) Chapter 1
• Local operators may be deterred from investing in broadband infrastructure by fear of
assisting their competitors – particularly if required to offer parts of their network on a
wholesale, open access basis.

• This concern can be reduced if regulators offer incentives such as a limited period of
exclusivity, allowing the operator to recuperate their intial deployment investment before
offering the network for wholesale access.

• Local governments in developing markets have a central role in attracting new providers.
As in the previous case study, it is very important for new entrants to be clear about
which infrastructure (e.g., ducts, poles) is available to them and where it is located.

• Google Fiber succeeded in installing the network in Kampala when the Ugandan
government failed to do so in 2006. This indicates that a service provider motivated
by end-user revenues can be more successful than a government-funded deployment
project using a third party.

One example is Gigaclear, a new UK-based fibre low-message-size RF protocol that operates in the
broadband network operator that focuses on bands below 1 gigahertz (GHz). This could enable
rolling out fibre networks across rural areas in a number of smart intiatives, but the technology is
England. It has been able to fund its business new and the applications are still evolving.
expansion with the support of equity funds.
In February 2015, the company secured GBP Elliot Management signaled its intention to
6.5 million from investors such as CF Woodford support the expansion of the SIGFOX network in
Equity Income Fund and Forward Private Equity . the United States, based on its belief that SIGFOX
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could provide a high return on investment in
Providers of Internet services such as Google future years. The Series D investment round raised
and Facebook have also been involved in large- USD 115 million from several investors, including
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scale investments in broadband infrastructure. Elliot Management, which was the only financial
Both companies’ business growth depends on institution involved. Other investors included
people having adequate Internet access. The leading mobile operators (Telefonica, SK Telecom
yearly revenue growth generated by these types and NTT DOCOMO) and industrial partners (GDF
of companies allows them to bear the risk of SUEZ, Air Liquide and Eutelsat). The funding was
participating in large-scale investments. earmarked for accelerating SIGFOX’s worldwide
network roll-out programme in Europe, Asia and
Case study: SIGFOX, France the Americas, in association with international
telecommunication operators.
This case study demonstrates how a hedge fund
might invest in a start-up global cellular technology The investors collectively stood to benefit from
developer, as opposed to investing in broadband the development of "smart" applications in energy
infrastructure. Elliot Management is a hedge management, energy efficiency, sustainable cities,
fund founded in 1977 in the United States. The Internet-of-Things and machine-to-machine
company invests in debt and equity securities, with technologies. SIGFOX has signed a contract
a focus on companies undergoing restructuring. with TDF, continental Europe’s biggest owner
of broadcast and telecommunication masts, to
In 2015, Elliot Management participated in expand TDF’s national coverage. In 2014, SIGFOX
SIGFOX’s Series D funding round . SIGFOX is a partned with broadcast tower provider Arqiva to
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French start-up that has developed a cellular build a UK network dedicated to the Internet of
connectivity technology for the "Internet of Things. A year later, SIGFOX announced that it was
Things". It pioneered a very low-power, long-range,

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