11th June, 2019
The working capital finance revolution has created a game changing proposition for investors seeking a valuable alternative to money market funds and other short-term liquidity vehicles.
25th February, 2019
Greensill, the world’s biggest non-bank provider of working capital solutions, already has a pioneering financing scheme for mobile phone handsets. It has set up off-balance sheet purchase facilities, which ease debt levels in businesses that are often highly leveraged, by creating bonds sold to investors secured on the handset receivables.
Now Greensill is looking to apply similar thinking in the 5G roll out.
“There is a lot of liquidity in the financial system and money is looking for returns,” says Bart Ras, UK managing director at Greensill. “The absolute amounts out there are way more than sufficient to fund the roll out.”
As it has shown with its innovative solutions for funding handsets, Greensill is working to find a better way to finance the development of what will be the most expensive and exciting technological change of the past 40 years.
Australian Telecoms giant Telstra is one example of a carrier that has reaped the benefits of deploying supply chain finance solutions with Greensill.
"Banks have been willing to offer vanilla supply chain finance but only Greensill has helped take that service to the next level partnering with Telstra to develop the innovative SCF tools we have deployed."
By June 2019, Telstra has publicly said it will have invested $8 billion in its mobile network over the last five years. That effort has laid the groundwork for a massive nationwide 5G mobile launch in 2019, when the first commercial 5G devices will become available.
In anticipation of that the company conducted the world’s first connection of a 5G mobile device in December 2018, its high-speed network enabled Australia’s first commercial 5G-to-5G video call, and it has also powered the nation’s first 5G-connected car.
Currently, 5G connectivity is live in all major Australian cities, at a total of 200 sites. In the first half of 2019, Telstra will launch 5G-connected smartphones for consumers, allowing Australians to experience blisteringly fast connectivity from their fingertips for the first time ever.
Greensill’s Wonfor says fundamental changes are required in the telecoms sector, and more should follow Telstra’s lead. “Operators either haven’t got, or don’t want to have, an investment model similar to the one they used for previous generations,” Wonfor said. “Traditionally, it came down to operators taking the build risk and leaving it to sales and marketing to make it pay, or you had manufacturers of equipment having to step into financing to support their sales.
“We see an industry that has gone ex-growth from a consumer point of view at a time when operators still have significant amount of debt that has been used to build their existing networks. They also have investors that expect dividend flow and that is putting pressure on their balance sheets and working capital. In short, they don’t want debt or an asset on their balance sheet that is going to be used by someone else with an uncertain payback.”
Learn more in our latest whitepaper, “Financing the Future of 5G.”
Each month, Greensill’s team of experts contribute to the latest insights and analysis, setting the agenda and leading the discussion on unlocking capital so you can put it to work.
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