BACKGROUND:

We want you to experience proposing a major private
high-tech project in a country where it is difficult to do business.
You must make alliances, understand the national and international
regulatory structure in which you will work, and consider the needs
and means of the people/government in the country where you are
building this system. We also want you to learn something about how
such a project might be financed, and what funding constraints you might find.

THE PROJECT:

In this case, you are a private company that has made a strategic local
alliance in a Sub-Saharan Africa country for the construction of a new
telecom system for that country. Your strategic alliance is with a
private local company with excellent connections, but no exceptional
sources of funding. You are writing a business plan for presentation
to entities in international capital markets for funding.

Some constraints under which you will be working:

You will be building a system for Kenya, Nigeria or South Africa. You
will be given the opportunity to choose which country you wish to work
on. We will then assign individuals to specific teams. We reserve
the right to place individuals in countries other than the one they
requested in an effort to have a balanced number of companies focused
on each country.

You will have to obtain local regulatory permission for your phone company.

You will be subject to price regulation by the government of your host
country.

Your plan must be capable of being funded through international, private
funding sources.

Your project will be viewed as a capital project with long-range returns.

The options open to you are some combination among residential and/or
commercial uses in rural and/or urban areas. You must justify your choice both
to the national government and to the investors.

Some points to keep in mind:

-- How can you form alliances and gain government permissions? What
kinds of concessions (such as tax breaks, other incentives) can you
negotiate to make this all easier?

-- What is the regulatory climate both nationally and internationally;
how stable is it; how will you address that in your plan?

-- What sources of financing are available to you to get this project
going, and to sustain it; are they the same?

-- What scale can you afford to work on; what partnerships might you
need?

-- How do you figure your cost structure?

-- How do your investors get their money back out of the project?

You have been divided into 9 different companies. The tasks in each
company are: management, finances, engineering, sales/marketing,
operations, government (and other external) relations, and perhaps
regulatory policy. You should divide these tasks up amongst yourselves.

ASSUMPTIONS:

When you prepare your financials be sure to include for our use a 2
page discussion of all your basic budgetary assumptions:

-- unit costs and fixed costs,

-- administrative costs (including overhead),

-- discount rate,

-- total population and target population,

-- market growth expectations,

-- a paragraph about your in-country partner,

-- and any other assumptions made in your business plan.

ASSIGNMENT:

Your business plan should be written as a group project. This means
that each of you will make contributions to it, but one person should
be responsible for final production so that there is consistency in
writing and editing. We are looking for a coherent document that
reads well. IT IS DUE IN CLASS ON WEDNESDAY, NOVEMBER 29.

Teams will present their plans to an assortment of interested
potential investors on November 29 at 9:00 AM, November 30 at 7 PM, or
December 1 at 9:30 AM.

SOURCES:

In class on Friday, November 3 we will distribute some of the materials that
you will need to research and write this plan. Other materials are,
of course, available on the Net and in the Library.

Distributed to each team:

Telecommunications Policies for Sub-Saharan Africa, World
Bank. [PLEASE RETURN THIS ITEM WHEN PROJECT IS COMPLETED.]

Options for Rural Telecommunications Development, World Bank.
[PLEASE RETURN THIS ITEM WHEN PROJECT IS COMPLETED.]

Price Waterhouse manual on writing business plans.

Also consult the following in Dewey:

World Telecommunications Development Report
HE7568.W67 1998 REF

African Telecommunications Indicators
HE8461.A37 1998 REF

We will put some other materials from the World Bank on reserve at
Dewey.

There are a number of websites that show more on writing business
plans.

REVISED SCHEDULE FOR AFRICAN TELECOM CASE

Day	Subject	Lecturer
F Nov 3	Introduction to Telecom case	AS
M Nov 6	Business opportunities in African telecom	Guy Zibi
W Nov 8	Business plans	David Matias
F Nov 10	Holiday
M Nov 13	Government Regulation of industries	RDT
W Nov 15	Technology transfer to Africa	Mutambara?
F Nov 17	Work
M Nov 20	Financials	David Matias
W Nov 22	Work/Open
F Nov 24	Holiday
M Nov 27	Work
W Nov 29	Presentations in class, beginning at 9 AM
Th Nov 30	Presentations in class, evening, 7-9
F Dec 1	Presentations in class, 9:30-11:30
M Dec 4	Debriefing on Telecom case and Feedback.