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Senegal Mobile Telecommunications Industry

Senegal Mobile Telecommunications Industry. Agenda. Telecommunications in Africa Why Mobile Telecommunications? Why in Senegal? Mobile Telecommunications in Senegal Market Strategy Financial Analysis Risks/Challenges. I. Telecommunications in Africa. Successful Privatization

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Senegal Mobile Telecommunications Industry

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  1. Senegal Mobile Telecommunications Industry BUS 576 -Dr. Chrite

  2. Agenda • Telecommunications in Africa • Why Mobile Telecommunications? • Why in Senegal? • Mobile Telecommunications in Senegal • Market Strategy • Financial Analysis • Risks/Challenges BUS 576 -Dr. Chrite

  3. I. Telecommunications in Africa • Successful Privatization • Teledensity is low • High Cost of infrastructure • Low GDP • Increasing Mobile Penetration • Mobile Telecommunications has high margins in West Africa BUS 576 -Dr. Chrite

  4. II. Why Mobile Communications? • Land-Line Infrastructure is suspect in Africa • Opportunity for substitute good • More reliable • Profits are 20 – 40% in mobile comm. • ROI at least 20% • Pre-Paid strategy reduces paperwork, employees, and risk BUS 576 -Dr. Chrite Pyramid Research

  5. III. Why Senegal? BUS 576 -Dr. Chrite

  6. III. Why Senegal? (Cont.) • GDP of $4.4 billion • GDP-purchasing power parity (PPP) of $15.6 billion • annual GDP/capita was $500 with a GDP/capita-PPP of $1,600. • CONSUMER POWER!!! • Low Inflation, Low Debt • Free flow of capital for foreign investors BUS 576 -Dr. Chrite

  7. III. Why Senegal? (Cont.) • Push toward privatization • Auctioning off license in May 2002 • End of monopoly • Moderate cellular phone penetration BUS 576 -Dr. Chrite

  8. III. Why Senegal? (Cont.) BUS 576 -Dr. Chrite

  9. III. Why Senegal? (Cont.) • Stable government • Government investment • Health • Education • Telecommunication • Civil stability • Strong Secondary and Tertiary Education Systems • Healthy population growth • Low HIV/AIDS infection rate BUS 576 -Dr. Chrite

  10. IV. Mobile Telecom in Senegal • Market Growth and Access • Stable government and society • Developing Mobile Infrastructure • Telecom and regulatory liberalization • Profitable! • Springboard for regional expansion BUS 576 -Dr. Chrite

  11. V. Market Strategy • Use existing infrastructure to wire Senegal • Base stations and cell towers • Pre-paid Business Strategy • Use existing points-of-sale • Local stores, restaurants, gas stations, etc. • Roaming contracts with other GSM providers across the globe • Expand coverage by adding additional towers over 5 years BUS 576 -Dr. Chrite

  12. Projected Coverage Area BUS 576 -Dr. Chrite

  13. VI. Financial Analysis BUS 576 -Dr. Chrite

  14. VI. Financial Analysis BUS 576 -Dr. Chrite

  15. VI. Financial Analysis BUS 576 -Dr. Chrite

  16. VII. Risks/Challenges • Technological Reliability • Government Regulation • Inflated Licensing Fee • Across West Africa • Competing with the government provider Alize • Disposable Income • Market Acceptance BUS 576 -Dr. Chrite

  17. Conclusion • Mobile Telecom in Senegal • Stable Government • Low penetration • Market Opportunity • Senegal • West Africa • Projected PV USD 34 million • Manageable Risk with promising rewards BUS 576 -Dr. Chrite

  18. Q&A BUS 576 -Dr. Chrite

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