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Why I know Angie Communications will be a EUR200B Company

on Saturday, 23 May 2015. Posted in News

Usually, I try to be very modest. But if you have an allergy for boasting and superlatives, please stop reading; this post is all about the rights that my team and I have earned in the last 15 years to exhibit our pride. Our hard work in these 15 years has culminated in a very valuable, innovative and disruptive company.

So, here goes.

 

I am the first to admit that Angie’s plans are extremely ambitious. But that makes life spicy. And I know my team and I are up for it.

Nevertheless, while hugely ambitious, our plan is also very simple. We decided that our focus should be on only a handful, large markets. Let’s take our UK plans, for example.

We already have access to capital to acquire mobile spectrum in Ofcom’s upcoming auction. Such a license is, in our case and setup, a license to print money. We will be the only privately-owned nationwide mobile operator in the UK (until, of course, we will go public).

If we were to succeed in “stealing” 20 million subscribers from the other players, and if each subscriber would pay us approximately EUR20 per month (we use euros in our estimates), we would generate 4.8 billion in revenue. Forget all business analyses, forget about strategizing, forget about “ifs and hows”. Just consider the basic calculation. If 4.8 billion is not worth risking your shirt for, what is?

Of course, analyses, strategy, planning and competencies are crucial to realizing a nationwide mobile infrastructure. On top of that, we are also focusing on nationwide wireless (outdoor Wi-Fi etc.) and a nationwide footprint of fiber optic infrastructure that has to result in 3 million actual connections to premises, each of them at 10 gigabit per second. How we will realize this is documented in detail (go to http://ang.ie/vdr if you want to read our docs – especially the “Blueprint”).

Angie’s kind of business has no real comparable. There are no companies listed on public stock exchanges that solely specialize in next-generation communications services; Angie builds three distinct yet converged infrastructures in each market (mobile, wireless, fiber). And last, but not least, Angie is the only company that will own such next-gen infrastructures in multiple markets. Not Verizon, not AT&T, not Liberty, not BT, not KPN, not Deutsche Telekom, not France Telecom…. but Angie!

Anyway, we want to enter as many markets in the world as possible. I have three business development experts working on our global entry. We will build infra ourselves, or we will partner with local investors and/or telcos. The world is our pond.

Coming back to the valuation. In our pro-forma estimates, the full potential of mobile and fiber revenue in the UK is EUR8.6 billion. Yes, that is a lot, but it is almost a fact (explained in section 2 of the Blueprint). The independent valuators checked the multiples based on somewhat “comparable” industry (communications in Europe) and concluded that sales/revenue for Angie would be less than 2 (1.8 to be precise). However, Angie UK has less expenses and less legacy operations to take care of than the competition, and its Net Earnings is estimated to reach 2.86 billion (after reaching stability, by 2023). The multiple for Net Earnings is much higher for obvious reasons. The valuators estimated the comparable multiple at almost 28. Thus, as crazy as it sounds, if Angie UK were to really reach Net Earnings of 2.86 billion by 2023, as a public company it could be worth a staggering 80 billion. 

When looking at EBITDA, Angie UK's 4.8 billion with a very low multiple of 5.6 would result in a value of 27.2 billion. (All these numbers are shown in Section 2 of the Blueprint, pages 44, 45)

Now, if my team of experts and I were to succeed in doing the same as in UK in three other comparable markets (through local holdings under Angie Communications International), with almost the same characteristics, an oversimplified calculation would show a (3x 80 billion) valuation of 240 billion (based on Net Earnings) or at least (3x 27.2 billion) 81.6 billion.  

You must think, wow… this guy Neal is seeing pigs fly in his castle in the hot air. Well, I am certainly not. My team has 20+ experts and we have another 10+ external experts who all are confident that this is going to happen. They earned their tracks in the industry, built infrastructure, managed billions, directed multi-ten-billion dollar deals etc. But above all, nobody in this industry can shoot down my claims and plans. I have welcomed several critics to challenge any of our findings in our Blueprint, and while some dared to criticize me openly, they didn’t come up with any form of detailed analysis. If they were to do so, I would gladly spend a few hours mowing their criticism down. After all, what they may not know, is that our plans have been scrutinized and our findings have been verified by many external experts since 2009. Our team is a bunch of professionals and not cheerleaders or yes-men. And on top of that, I am not just Angie's biggest cheerleader. I am Angie's worst and most asshole-ish critic. 

Anyhow... yes, we are prepared. We have always been prepared.

We’re marching towards the €200 billion!

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