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 •...