Telco Start-Up, Africa

Our Brief

"We have $100m in initial investment on offer to build a new telco. We are acquiring spectrum licenses across Africa and the Middle East to deploy WiMAX. We are considering building a mobile ISP for small business and enterprise. We have a month to build a business case to secure the investment. How can you help?"

Our job was to both provide structure in developing the brief itself, as well as to provide strategic direction to create the business concept/vision, and design the resulting business model. (Another consultancy that specialises in network buildouts was providing the detailed financial modeling and writing the business case based on our input). Furthermore, time was of the essence to meet deadlines to produce a business case and confirm the full funding.

What was done?

We conducted two intensive on-site workshops, each of two days. Both provided prepared input, and a structured process and highly interactive format. We acted as both facilitators and active participants (sharing our insight and opinions). A key need was to absorb as little time as possible of the executive stakeholders, as they worked to liaise with investors and acquire spectrum licenses (which ran to government timetables outside our control).

The first workshop was to develop the concept and vision for the company. We focused on understanding the key drivers of the opportunity: what are the levers for driving reward and risk? We prepared these interview questions, completing the data on-screen in real time. We then looked at how some strategic options might fit into this framework. The result was that we were able to discount the initial idea of becoming a mobile ISP, and instead directed efforts towards serving consumers that the GSM ecosystem found hard to reach. This was partly based on material we had prepared by applying both "Blue Ocean Strategy" and "Innovator's Dilemma" type thinking to the telecoms market.

From this workshop we wrote up a detailed description of the concept and business vision. The second workshop, following the same structured real-time documentation process, provided the detailed business model design. Again, we prepared scenario options and recommendations in advance, and rapidly co-created an initial business model. After the workshop we provided a detailed documentation of the business model and our recommendations.

What was the result?

The client has followed our business model design very closely. As the company is just entering market trials, it is too early to tell whether the overall business model is going to meet expectations in the market. Naturally, the immediate deadlines to build a business case were met.

We believe we have helped design an attractive product concept, together with a low-cost distribution and support model. Some of the unique feature and marketing suggestions came from our extensive knowledge of, and theoretical writings about, the core telco voice and messaging products. Over the long term, this will prove highly disruptive to the established GSM ecosystem, as it offers a functionally superior product to GSM telephony with an inherently lower cost structure.

What were the benefits?

As the client is only just going live at present, and is a start-up, there obviously is no baseline to measure the above against. Our job was to design the business model. In so doing:

  • We have designed a product that by focusing on voice messaging, rather than telephony, potentially requires less spectrum, and offers greater user coverage, per cell site.

  • The unique highly distributed and localized distribution and support system aligns the interests of the field sales and support staff with the company, raising customer satisfaction, and lowering costs.

  • The revenue model allows for much finer-grained price discrimination, offering a 'freemium' personal communications model not seen elsewhere. Even if you have no disposable income, you can become part of the client's network as a user; this naturally stimulates more revenue-generating calls and messages elsewhere in the system.