Private equity (PEs) firms, hedge funds, and telecommunications infrastructure and service providers have been doing a growing number of increasingly large deals together in just the past few years and they all face the same pressure to deliver promised cash flow faster and realize multiplicative returns sooner.
But as PEs wade into service providers with an eye on cutting costs, making major operational improvements, and – in many cases – modernizing the entire technology platform, there is a growing desire to speed things up. They must determine how they can modernize the operations and networks they acquire to roll out new technology and services better, faster, and for far less cost than service providers traditionally have.
Deal flow grows
Private equity and telecom deals are growing bigger and more frequent. According to data from Preqin provided to Private Equity News, the aggregate value of PE buyouts of telecoms grew from just $8.7 billion in 2019 to more than $29 billion in 2021. Infrastructure fund deals have also grown from an aggregate of roughly $48 billion in 2019 to more than $78 billion in 2021 and, Preqin notes, that while telecom infrastructure deals were just 3% of global infrastructure deals for funds, in 2021 that value jumped to 10%.
Source: Private Equity News
For example, just last month an investment consortium led by private investment firm Macquarie acquired cellular tower infrastructure from Globe Telecom in the Philippines for more than $340 million, according to Forbes. Just this week Brightwood Capital Advisors, PhenixFN Corporation, and CCP Capital Strategies acquired Wireless Maritime Services (WMS) from AT&T and Anuvu. WMS is a cellular services provider focused on maritime applications, such as connectivity at sea.
But even large and heavily regulated telecoms are in play as pressure to consolidate a saturated European market grows and deep pocketed investors take larger positions in major telecoms, as Xavier Niel has done with Vodafone.
The real work starts after the deal
What’s the difference between a service provider acquiring another service provider and a private equity (PE) firm acquiring a service provider? The instant the deal closes, the clock starts ticking faster and louder for a PE firm.
PE firms are in the business of generating returns on their investments whereas telecoms tend to generate predictable revenue from infrastructure that can grow slowly. PEs must deliver multiples on their portfolio investments, where service providers can celebrate incremental improvements. But PE firms are not buying into service providers because they want flat revenue or slow growth. They want increasing cash flows and better margins to make their assets more valuable and productive.
To achieve that with a telecom service provider, operations automation is needed immediately, particularly at the heart of the order-to-cash cycle. This is where Intraway’s Symphonica steps in.
How Intraway helps PE firms deliver returns faster
Intraway’s Symphonica is a no-code, software-as-a-service (SaaS) solution that automates network and service provisioning, activation, and service orchestration to deliver any type of service to any type of endpoint.
Here are five ways Symphonica can help private equity firms realize and grow the returns the need from their telecom investments faster, more easily, at a lower cost, and with futureproofing built in.
- Use SaaS for more short- and long-term value: Telecom service provisioning, orchestration and activation are highly complex. Traditional solutions worked on a service-by-service basis; were managed on-site; provided with expensive licenses; and are expensive to maintain and customize. Symphonica’s SaaS model breaks those barriers.
- Get to market faster with any service to any end point. Symphonica stands apart in provisioning because it can deliver any service to any endpoint across networks ranging from legacy PSTN to GPON and cloud-native 5G networks. Symphonica can zero-touch automate the core of a service provider’s order to cash process, making sure services are delivered to customers on-demand.
- Scale faster and cheaper. Service providers have begun moving IT, operations, and network workloads to public clouds. But cloud economics are truly realized with a low-code, cloud-native, single code stream SaaS solution like Symphonica. It is faster to implement and far easier to scale because it uses cloud-native principles, leverages cloud resources, and requires no brittle customization or integration that won’t scale easily.
- Pre-integrate to cut time and cost. Symphonica comes pre-integrated with a host of proven partners that provide a variety of complementary BSS, OSS, and process automation technologies which similarly embrace cloud-native technology, including open APIs. By providing pre-integration and a simplified process for creating new integrations fast, Symphonica removes the traditional heavy expense of best-of-breed systems integration.
- Vendor agnostic. Symphonica is neutral regarding which network equipment, application servers, cloud platforms and any other system it provisions, activates, and orchestrates. As a result, service providers who use Symphonica avoid vendor lock-in not only in provisioning, but in choosing the components of their infrastructure. This ultimately unlocks the flexibility service providers need to turn over technology platforms, migrate services and customers to clouds, and to move different workloads from cloud to cloud.
Make it easy
In business, speed comes with the preparation necessary to make the complex simple. This is what Symphonica encapsulates. It makes complex processes, once the domain of highly trained engineers-only, accessible, and understandable to a much broader operational and business audience, and thereby easier to manage, automate, and improve. For example, this video demonstration shows how Symphonica automates provisioning for direct Internet access (DIA) over GPON. And this article shows step by step how Symphonica automates SD-WAN service delivery.
In any such case, Intraway puts the service provider in control of its network, service, and cloud resources and on the path to zero-touch automation faster, with less cost and effort, and in a more future-proof way than OSS platforms typically can deliver. In the end, this means faster returns, better margins, and more aggressive growth opportunities for PE investors to increase the value of their telecom investments.