Infratil : Console Connect Investor Presentation

Strategic investment in

Infratil investor presentation

10 July 2023

Infratil will initially acquire an 80% stake in Console Connect for US$160m

Transaction Summary

Infratil has executed a conditional agreement with HKT to accelerate the growth of Console Connect through a strategic partnership

Transaction summary

Valuation & returns

Approach to funding

Timing & conditionality

• Infratil has executed a conditional agreement with HKT Limited (HKT) (SEHK: 6823) to establish a strategic partnership to accelerate the growth of HKT's Console Connect business
• Transaction structure to align interests:

1-

2- Console Connect business to be driven further with HKT in a joint sales and marketing effort

3- Console Connect owns its Tier 1 global IP network, as well as long-term integrated access to a global backbone network

4- Accelerate Console Connect's investments in network infrastructure and technology platform

• Infratil will ultimately own between 60-80% of Console Connect, with HKT holding the remainder
• • ultimate ownership stakes will reflect the relative capital contributions of each party
• As the majority investor, Infratil will have significant governance rights and, working alongside HKT, will continue to drive the development and growth of Console Connect
• 3.4x FY2022A revenue multiple for Console Connect's software-defined interconnection ("SDI") platform
• Platform expected to generate returns consistent with Infratil's target returns of 15 - 25% for development assets
• Initial Infratil consideration of US$160 million, including an earnout and subject to usual completion adjustments for cash, net debt, and net working capital
• Strategic partnership with HKT, with both jointly investing up to US$295m in Console Connect to accelerate growth via marketing, R&D and new subsea cable investments over a 2-year period
• Infratil's investment will be funded through available capital and existing bank facilities
• • as at 6 June 2023, Infratil had total available liquidity of ~NZ$1 billion
• Completion of the acquisition is conditional on telecommunication, foreign investment regulatory approvals and merger approvals
• Completion of the Console Connect investment is currently expected by Q3 2024

2

Investment

Thesis

High-performing, reliable global networks are essential to

1	This is an idea	2	Clear benefits of	3	Innovative offering with
	that matters		growth and scale		strong value proposition

supporting an increasingly digitised global economy

• Digital network infrastructure is increasingly important to meet exponential growth in global data demand
• • Global data traffic expected to increase at 18% CAGR over the next 5 years1
• Global subsea networks are critical digital infrastructure, carrying over 95% of global internet traffic2
• • Subsea cable bandwidth is expected to grow at 34% CAGR to 20283

• Software-definednetworking technologies have revolutionised network provisioning, enabling businesses to scale and reduce costs easily
• Significant need for a centralised global communications platform to optimise networking management and provide critical connectivity
• On-demandmodel is a capital efficient way to monetise unused network capacity, significantly improving network economics

• Clear path for Infratil to grow global platform, driven by secular tail winds
• Thought leadership and R&D capabilities to create and maintain competitive differentiation as digitisation increases and number of use cases grow
• Potential for strategic partnerships with Infratil's portfolio companies and other ecosystem players

1 Ericsson Mobility Report November 2022;	2 Atlantic Council, Wall Street Journal; 3 TeleGeography Global Bandwidth Forecast Q3 2022	3

What is Console Connect?

Console Connect

1

Console Connect

2

HKT Joint Sales & Marketing Effort

is a leading communications service platform, that provides

Top 3 global software-defined interconnection ("SDI") platform

Next-generation enterprise connectivity solution enabling

1,000+ customers to:

• Instantly self-provision private and secure connections across a global ecosystem
• Monitor network usage in real time, purchase bandwidth on a pay-as-you-go model, and order value-added services via a centralised user portal

Offer critical fibre infrastructure and IP access to enterprises, content providers, and service providers in partnership with HKT

• Joint go-to-market via HKT-supported approach to existing and new enterprise and wholesale ("E&W") customers
• Recurring revenue model

next-generation

Underpinned by

connectivity solutions

3

Integrated with Tier 1 global network

Top 10 Tier 1 network globally

738,000 route	~170 cloud zones	carries 17% of all
kilometers	reached	internet traffic
59+ Tbps bandwidth	900+ data centre	70 international
capacity	PoPs	cable systems

4

Platform and network development

R&D initiatives and proprietary pipeline of

subsea cable development projects

• Clear pathway to increase Console Connect's network capacity to meet customer demand
• Intention to partner with HKT to accelerate Console Connect growth via network and R&D initiatives

4

How Console Connect Works

Next generation

The Console Connect solution

Connect to:

Through a centralised user portal:

connectivity solution solving multiple enterprise pain points

Your office

building

Console Connect

enabled data centre

(900+ locations

worldwide)

Console Connect

platform

Underpinned by a

Tier 1 subsea cable and IP network and access to global wireless towers and terrestrial backhaul

your office branches

data centres

clouds

SaaS platforms

internet exchanges

IoT & mobile operators

Mobile endpoints

Providing efficiency and cost savings:

• Monitor network usage in real time
• Utilise bandwidth and internet access on demand
• Order other value-added enterprise IT services all through a centralised user portal

5