Acg Analysis

593 WordsFeb 21, 20133 Pages
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

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