Acg Analysis

INDUSTRY DEFINITION: PAYPHONES in Dar-es-Salaam VALUE CREATION
Key WTP Drivers
• • • • •

VALUE CAPTURE

Pent-up demand, how much? Low/mid purchasing power

High literacy; but new service for most Chicken & egg problem (people to call?) Nature, level of demand highly uncertain Key Cost Drivers

✔

Equipment Suppliers • Proprietary tech

TTCL

???

• Tied to gov’t/rule-maker

?

• Wants traffic (+ margins!) • Long term contracting possible • Competitor in payphones, • Equip Suppliers don’t want to ruin

reputation with buyers

✔
Rivalry
resourced

substitute in wireline • Crony/Corrupt organization • Bottleneck control over n/w

✔ ?

• • • • • •

Typically high-cost infrastructure Interconnection Network reliability

New Entrants • Regulatory, license • Uncertainty of local env’t, need for local knowledge • Large fixed investment to achieve scale

• Scope for diff’n •Small, under•Incentives to grow, not to compete

✔

Labor (productivity of local workers?) Local institutional/government risk? Vandalism/security risk?

x

Merchants • Many, small • Want the business!

Substitutes • Walking, talking is dominant solution, but not one that will

✔

✔

=

?

End-Users • Few options • “Small” • Highly price sensitive?

✔

strategically challenge payphones • Fixed line network is utterly awful

Close links between value creation & value capture drivers VALUE CREATION
Key WTP Drivers
• • • • •

VALUE CAPTURE

Pent-up demand, how much? Low/mid purchasing power

High literacy; but new service for most Chicken & egg problem (people to call?) Nature, level of demand highly uncertain Key Cost Drivers

✔

Equipment Suppliers • Proprietary tech

TTCL

???

• Tied to gov’t/rule-maker

?

• Wants traffic (+ margins!) • Long term contracting possible • Competitor in payphones, • Equip Suppliers don’t want to ruin

reputation with buyers

✔
Rivalry
resourced

substitute in wireline •...