Exclusive Financial Advisory Mandate for Telecom Network Transfer
Exclusive financial advisory supporting the transfer of a regional telecommunications network to a national operator
Description of the mandate: M&A advisory for the sale of a Swiss regional telecom network to a national operator
The engagement focused on the sale of a regional telecommunications network owned by a Swiss public entity, to a national telecom operator. The infrastructure concerned served several peripheral municipalities of a major French-speaking Swiss urban centre and counted several thousand connected households and businesses. The exclusive financial advisory took place within a strategic redirection of the public entity's multimedia activities.
The mandate aimed to identify an industrial partner capable of ensuring service continuity, network maintenance and the preservation of access conditions for existing clients.
Key challenges: structuring an asset deal preserving service continuity and strategic value
The main challenges were:
- structuring an asset deal involving specific regulatory, technical and political constraints;
- guaranteeing service continuity for end users and technological compatibility with existing infrastructure;
- preserving the strategic value of the transferred network in a context of rapid sector transformation;
- supporting public governance in a demanding institutional environment.
Approach and outcomes: preparation, counterparty selection, due diligence and negotiations
The team supported management and governance bodies in:
- preparation of the sale process (opportunity note, transaction structuring);
- review of the technical and financial documentation of the asset (operating profitability modelling, future cash flow value);
- the selection and approach of potential partners;
- management of due diligence on technical, financial and regulatory aspects;
- assistance with final negotiations on price, transferred perimeter and continuity commitments.
The transaction enabled the smooth transmission of the network to a national-scale telecom operator, while ensuring service continuity and the value of the transferred infrastructure. This mandate illustrates the ability to structure complex strategic asset divestment transactions in a demanding institutional environment.
Illustrative example: numerical application to a regional telecom network
For illustrative purposes only — unrelated to the actual data of the mandate — a regional telecom network serving 10,000 connected households/businesses with an average monthly ARPU of CHF 45 (recurring revenue ~CHF 5.4M/year) and operating EBITDA of CHF 1.8M (33% margin) could exhibit an asset valuation of between CHF 10M and 18M based on 5.5x to 10.0x EBITDA multiples (typical of regulated telecom infrastructure). The value of tangible assets (fibre, equipment, land) and customer contracts are valued separately.
Summary: 12-month mandate, full asset deal, transmission preserving service continuity
M&A mandate delivered over 12 months for a Swiss public entity divesting a regional telecom network. Full asset deal: structuring, valuation, partner selection, due diligence, negotiation. Deliverable: smooth transmission to a national operator with preservation of service continuity and infrastructure value.
Frequently asked questions: asset deal, telecom multiples, service continuity
Difference between asset deal and share deal for a telecom network?
An asset deal transfers identified assets (fibre, equipment, contracts) without transferring the company, whereas a share deal transfers shares. For divesting a network integrated into a public entity, the asset deal is generally preferred as it enables (i) isolation of the divested perimeter, (ii) limitation of transferred liabilities, (iii) simplification of residual governance, (iv) individual adaptation of customer contracts.
What multiples for telecom infrastructure?
For telecom infrastructure (FTTH, FFTC, mobile), observed EV/EBITDA multiples range between 6.0x and 12.0x, with a premium for (i) rural/regional profiles with long-term contracts, (ii) fibre share in the mix, (iii) quality of the client base. Multiples per connected household vary between CHF 800 and 1,800.
How to guarantee service continuity?
Service continuity is guaranteed via (i) contractual commitments from the acquirer on service level (SLA), (ii) a transition period assisted by the seller (TSA — transitional services agreement), (iii) technical staff transfer, (iv) a contractualised specification on maintained access conditions for the existing client base.
How long does a public infrastructure divestment take?
For a divestment of telecom infrastructure by a public entity, the standard duration is 10 to 18 months, due to public governance constraints (consultations, political validations), technical complexity of due diligence and any regulatory authorisations. The mandate described was completed in 12 months.
How to manage political constraints of a public divestment?
Political constraints are managed via (i) transparent communication upstream with political authorities, (ii) a contractualised specification guaranteeing access conditions, (iii) stakeholder consultation (local elected officials, users, unions), (iv) price structuring integrating long-term service commitments.
Does the transaction require regulatory authorisations?
Yes. The divestment of telecom infrastructure in Switzerland may require (i) notification to ComCom and OFCOM, (ii) merger control by COMCO in case of market effect, (iii) cantonal authorisations for infrastructure on public domain, (iv) political validation by the divesting public entity's governance bodies. To go further: company sale process.
Similar mandates: other M&A asset divestment transactions
The transactions shown include those completed by, or with the involvement of, Hectelion team members in current or previous professional roles. They are presented for illustrative purposes only and do not imply exclusive responsibility by Hectelion.
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The transactions presented were carried out by, with the contribution of, or with the participation of members of the Hectelion team in the context of functions performed currently or previously.