Connecting to Dutchtone
media and telecommunications
Rabobank International has emerged as an important shareholder in Dutchtone, a newly-
minted competitor on the increasingly liberalized Dutch telecommunications market.This
marks a further step in our careful engagement with media and telecommunications, a
market on which broad structural transformations, triggered by re-regulation and
technological development, will have a profound effect on the future shape of banking itself.
■Gathering components
Strategie deals
Complicated transaction
Compatible engagements
Necessary investment
What sNewS Issue2-February 1999
Dutchtone, a new group
that is now 80 percent
owned by France Télécom,
with the remaining shares
^livided equally between
P&urselves and ABN Amro, is
the culmination of a multi-year
relationship management
effort by our global media and
telecommunications group led
by Gerard van Kaathoven and
including Alexander
Gelderman, Nico van Eijk,
Ferry de Vries, Marjon Wind,
Joop den Besten and Danny
van Doesburg. Dutchtone will
serve as a platform for the
development of a full service
media and telecom company
that will compete in a full
range of services from mobile
to fixed line and through cable
and internet.
^The elements of Dutchtone
have been several years in the
making. They include a mobile
network, the Caserna cable TV
company (which has the
largest fibre backbone in
Holland and a total of some
1.1 million subscribers), plus
Furonet, the fast-growing
internet service provider. To
reach this point, we were
centrally involved in the early-
1998 Dutch state auction for
the national DCS 1800
operating licence, which we
won together with ABN Amro
and the Paris-based France
Télécom. This third digital
cellular system conipetes with
|wo existing networks; one
controlled by Libertel, which is
backed by ING, and another
by KPN Telecom. It will
greatly benefit from the
Global media and telecommunications group from left to right: Gerard
van Kaathoven, Johan Lont, Alexander Gelderman, Luc Rohof, Caroline
Spreksel, Geert Roggen, Marjon Wind, Ferry de Vries, Wim Brouwer and
Harold Kluit (missing from the picture are Julian Lewry and Nico van Eijk)
experience of the French group
since France Télécom is
already the world's third-
largest GSM operator with
cellular systems in over a
dozen countries ranging from
Argentina to Belgium and
France, from China to the
Ivory Coast, from Greece to
India and Japan.
Indeed, our relationship with
France Télécom goes back
further still. In mid-1996, for
France Télécom Mobiles
International, we also
underwrote the senior debt for
Mobistar, Belgium's second
GSM operator. In 1997, Rabo
Securities managed France
Télécom's prestigious initial
public offering (IPO). And we
received the lucrative advisory
mandate in the groups'
acquisition of Casema, the
aforementioned Dutch cable
TV group which will be
brought under the Dutchtone
umbrella. Other deals included
the financing of France
Télécom's mobile network in
Poland (Centertel). Thus this
next phase of our engagement
- the creation of Dutchtone -
puts all of the pieces together.
The company will serve as the
launching pad for a far-
reaching plan to carve out
strategie space in the emerging
information landscape of 21st
century banking. In addition to
ïts mobile, cable, and internet
initiatives, Dutchtone plans to
extend a competing fixed-line
network as well.
These initiatives will require
investments totaling some NI.G
3 billion (EUR 1.4 billion).
Rabobank, together with ABN
Amro, has taken the
opportunity to structure the
finance and handle a range of
products ranging from
payments traffic, treasury,
leases, insurance, pension
funds, and all the rest. This
may explain why the
Dutchtone transaction won the
'Deal of the Year' award for
the global media and telecoms
group as well as associated
professionals from cash
management services,
Rabobank Trust, the legal
division, the syndications arm,
and De Lage Landen (for the
Dutchtone vehicle fleet lease).
To some, it initially comes as
a surprise that a bank like our
own - so centrally focused on
food and agribusiness (F&A)
and health care - should be
engaged in media and
telecoms to this extent. But it
is a carefully balanced
engagement; one that will not
divert us from our central
strategie thrust but rather
advance it. The rationale is
quite clear and it extends far
beyond the fact that the
market is ripe with
ópportunities. Simply put:
modern communication
networks are emerging as the
pivot around which most
strategie banking develop-
ments will revolve. 'An ever-
growing proportion of
banking products and services
will be directly delivered to
the consumer via a network of
one sort or another,' notes
Alexander Gelderman. 'That's
why Dutchtone is more than a
pure financial investment. It
could become a strategie one.
It gives us a stake in the
distribution highway for
banking products and services
of the very near future. Even
this year, for instanee, we will
start to see smart cards being
loaded with digital cash via
mobile phones.'
Thus, an internationally
networked bank like our own
cannot ignore crucial develop-
ments in the Communications
field, and we continue to
devote sufficiënt resources to
stay ahead of the game. As the
Dutchtone deal suggests, media
and telecoms has emerged as a
ke y centre of competence.
