Value Dynamics Framework

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The telecommunications industry is characterized by an unusually high rate of change – not only in technology, but also in customer expectations, industry structure and government regulation.

Our Value Dynamics Framework therefore places particular focus on evaluating future cash flows and the degree of influence available to change key value drivers.

In short, the intrinsic value of an operator consists of hard assets (net cash plus plant, rights and real-estate) plus the present value of future cash flows.  Those future cash flows are in turn determined by three factors: the number of customers (share), the lifetime value of those customers, and the total cost of operations and infrastructure. 

The challenge comes in assessing each of those factors in the context of a dynamic, competitive market.  Our Value Dynamics Framework looks at the ability to deliver value (our Value Pillars), the maturity of capability relative to competitors, and the ability to execute (including transformational barriers and cash constraints). 

As such, the framework provides a consistent systematic approach to valuation and is designed to accomodate new or existing operators, developed or developing markets, and wholesale or retail business models. 

The Value Dynamics Framework can be used to assess fair value, or to perform scenario analysis in support of strategic decisions aimed at increasing shareholder value.

More information:

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