Monaco & Islands (M&I) is a portfolio business operating in territories within Europe, the Middle East, Africa and the Indian and Atlantic oceans. We are the market leader in most of the markets where we operate and in most of the services we provide.

Highlights

• 6% like-for-like growth in mobile revenue
• Bermuda business divested
• Relaunched our African operations as Afinis Communications
• Launched IPTV service in Monaco
• Monaco Telecom will focus on selling quad-play bundles in 2012

Performance

Our Monaco & Islands (M&I) business delivered strong performance in 2010/11, further building its reputation as a reliable and well managed business.

Revenue and EBITDA increased, thanks to a full year of contribution from our Maldives business which we consolidated in October 2009. On a like-for-like basis, EBITDA was in line with the prior year, while revenue was down 1%. Across the portfolio our mobile revenue rose by 6% on a like-for-like basis, although mobile ARPU fell as a result of the consolidation of the Maldives business which has a relatively lower ARPU.

Our Maldives business made a significant contribution to earnings, increasing mobile data revenue following the launch of a mobile broadband service and launching a mobile entertainment download portal.

We upgraded Monaco Telecom’s (MT) broadband network in 2010 to provide 30 Mbps download speeds and launched a video on demand IPTV service. The MT mobile business also grew subscribers, particularly through smartphone and tablet sales.

MT’s International division (MTI) relaunched our African operations under the Afinis Communications brand. Afinis’ business model is to supply connectivity services to large enterprises through both satellite and IP delivery networks. MTI’s joint venture in Afghanistan, Roshan, also enjoyed a successful year, increasing its mobile subscribers by 35%.

Our Guernsey business maintained mobile market share, despite aggressive competition.

Our Bermuda business was divested in March for US$70 million to The Bragg Group of Canada. The business could not be developed into a full service operation, so we sold it, receiving a good price.

Outlook

The outlook across the portfolio is positive, with our key territories in Monaco, Guernsey and the Maldives all expecting favourable economic conditions.

Our Maldives business is operating in a growing economy, driven by high end tourism. We expect more competition next year following the award of a fixed line licence to our mobile competitor. The results of the business will also be affected by the partial float of the local currency, the Rufiyaa.

Our Monaco business is trialling 4G mobile services ahead of a planned commercial launch in 2013. This will assist us to focus on continued growth of mobile data revenue.

M&I remains a diverse business, but with a mix of mature, strongly performing companies and high energy start-ups, it is well positioned for future growth.