Project Overview:
Westcom was formed to take advantage of a unique telecom opportunity in Sierra Leone: to develop a new market-leading MNO. Westcom will challenge the vulnerable incumbent duopoly by offering competitive pricing, data accessibility and reliable service quality.
• Sierra Leone presents a unique opportunity for a new Greenfield operator with a strong focus on:
- competitive pricing
- data accessibility
- quality of service
• The market has strong growth potential, as mobile penetration and broadband access lag other African countries. Sierra Leone is an effective duopoly with high pricing and low innovation.
• The competition is vulnerable: Airtel and Africell form an ineffective duopoly with ageing infrastructure and limited cash for investment.
• Westcom is seeking $55m in equity and debt financing in order to fully fund its launch and rollout plan.

Phase 1: To be famous for a high quality service at a great price.
Phase 2: Famous for email and social networking, as well as value.
Phase 3: Famous for great service and rewarding customers

Already appointed managers are: CEO, CFO/COO, CTO, Finance Director, and Technical Director.
Appointees have a combination of EM Telco experience (15+years) and/or specialist education & experience.
UK‐based management team to be sited in‐territory during Design, Build & Launch.
Oversight of local management while developing strategy for future regional growth.
Local executives to be engaged based on skill, experience and desire to be part of a growing regional franchise

Macro Variables:
Growth in GNI per capita is faster than the regional average (12% versus 7%).
Sierra Leone's GDP growth has outstripped Sub-Saharan Africa for the past 15 years.
Sierra Leone's population is growing rapidly and becoming more urbanized.
70% of the population is under 30 and therefore will mature into potential customers.
Sierra Leone's significant growth in subscriber additions is expected to continue at 20% CAGR.
The government understands that strong competitive ICT infrastructure fuels growth.
Further deregulation of the telecom market will yield more opportunities for Westcom.
Sierra Leone is committed to driving out corruption through improved governance.
Mobile penetration is currently only at 46%.
SIM Penetration is only at 65% compared to 113% in Ghana.
Data Penetration is only at 19% compared to 24% in Ghana.

Africell: Dominant player with 62% market share that has failed to roll out 3G & now focused on a failing operation in East Africa.
Airtel: Insignificant market & managed service deal means that network is overloaded and using old tech. Airtel has 35% market share.
The 2 other small operators have significant hurdles to surmount to achieve scale.

Uses & Sources of Funds:
Sources: $55mn Total project cost of which 50% is planned to be raised in equity.
$3.5mn in Bankruptcy Auction Purchase
$45mn in Huawei Capex
$0.9mn in License Fee
$6.2mn in Working Capital

Financials: Figures in USD mn
Years Revenue EBITDA
2016 6.6 -5.2
2017 42.8 4.7
2018 69.9 20.9
2019 81.9 28.8
2020 90.5 34

An exit multiple in 2020 at 8x EBITDA will result with a value of ~$270mn for an equity investment of $28mn.

Posted Sep 23, 2015

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