telecom, media internet
Transatlantic connection
TMI research - digging deep
When the telecom team arrived in Utrecht five years ago, a similar group was mov-
ing into our Chicago office. Since then, the US team has pursued a similarly low pro
file, while generating very nice numbers indeed from its activities in the main tele
com segments - telephony, cable television, broadcasting and publishing. Chicago's
Doug Zylstra talks us through his team's operations.
Real service
8 What'sNewS
Issue 8 December 2000
Anyone who has seen figures on, for
example, the huge numbers of US
connections to the Internet could be for-
given for thinking this is not only a ma-
ture, but also a highly saturated market.
To some extent, that supposition is cor
rect. However, according to Doug Zylstra,
there are still some segments, such as wire-
less (or cellular/mobile telephony as ir is
known in Europe and Asia), which are
still developing dramatically. Another fac
tor which is keeping the TMI team hard at
work is an historie environment. 'The reg-
ulatory situation here in the US differs
from other regions,' Zylstra explains. 'Li-
cences were awarded on a local or at best
regional basis. Deregulation kicked in a
few years ago. Now we're
looking at a huge move to-
wards consolidation so that
the US creates a national
footprint. This environment
has offered us great success
in servicing consolidators as
they acquire local providers.' Doug Zylstra
Consolidation is also ongoing in another
of Chicago's business segments: broadcast
ing. Again, regulations played a role in
creating a mass of smaller players. Now,
deregulation has inspired extensive M&A
activity. A similar trend in cable television,
where RI is recognized as banker to the in-
dustrv's top players, is also generating a
lot of business for Chicago. T'd say we'll
have done around 50% more business this
year, 2000, than in 1999, with the sarne
number of people,' Zylstra says.
The team will grow in the coming
months, as analysts are brought in
to support existing sta ff. One of
the reasons that Zylstra is hiring is
the shift in his business. From a
Hr_ credit focused activity, the team is
gradually moving towards a more
m structured approach to servicing
customers. 'We've always taken
just as much of a transaction as
we wanted,' he continues. 'We will
increasingly need to syndicate our posi-
tions down. This is in line with the way
the whole of R1 is going. And we're in
there too, generating the kind of returns
that are possible in this sector, but only if
you know your business, you know your
customers and you know how to deliver
real knowledge-based service.'
Since the TMI team first joined RI, re
search and sector analysis has always
been top priority. The launch back in
1996 of dedicated publi-
cation RaboCom is just
one example. Rather like
a professional journal,
the content is generated
by Rabobank TMI spe-
cialists and others. But
the fact that our own re-
lationship managers and
product specialists con-
tribute is an indication of what
distinguishes TMI in its own
market. Says editor Nico van
Eijk, 'Oftcn in this business ana
lysts will go for a broad view of
the market. We do that too. But
we're even more interested in
depth. That's how we select
counterparties. If you know
your customer and their business, then
you can see where you can add value. 1
know it sounds like a cliché, but we re-
ally are into long
term relationships.
It's not only a ques-
tion of defining
those players Nico van Eijk
you believe will
stay the course. You also have to
differentiate yourself so that you
come to the table as equals. Basi-
cally, that's what we've tried to do,
bring our own specialized knowl-
edge of the sector into the equation.'
As an expert on telecom law
and regulatory environ
ments, Van Eijk is a classic
example of TMl's approach.
However, RI's team is also
recognized for their technical
knowhow - and that's in ad-
dition to the banking and fi-
nancial skills they bring to
the relationship. 'Our atti
tude is that if you'rc in a long-term rela
tionship, if you're always looking for the
next job you can do with that customer,
e UMTS Report
Equity advice: This
summer saw the
publication of the
TMI equity research
team's cross-sector
report on the UMTS
opportunity. For
those of you who
are still getting used to GSM, UMTS means
Universal Mobile Telecommunications Systems
and is the so-called third generation platform
for mobile telecommunications. It won't be
available until 2002/2003 at the earliest, but
it's already making headlines as players vie for
very expensive licences. Auctions have already
taken place in a number ofcountries, so it's a
hot topic for investors and analysts alike. Our
dedicated TMI people at Rabo Securities are no
exception as this comprehensive report shows.
then you can also follow and analyze the
contpany more effectively. So it works
both ways. The customer gets our ex
pertise. We get the kind of risk/return
ratio that matches Rabobank rather
strict profile.' At the risk of another
cliché, that's pretty much a win-win in
anybody's book.
