Develop a 5-year Business plan for a telecom operator:
• Market size 10 million subscribers growing at 20% a year and growth rate going down to 10% in last year
• Market Share at end of year 0 = 10%
• Share of net adds 15% going up to 30% in last year
• Churn starting from 30% going down to 15% in last year
• Subscriber acquisition cost US$ 5.00 going down to US$ 2.50 in last year
• Marketing cost 10% of revenue going down to 7% of revenue
• Interconnect cost is 3 cents per minute
• License fee 1% of revenue less interconnect cost
• Other OPEX 35% of revenue going down to 25% in last year
• Revenue calculations
o Pricing – 3 packages
▪ Afixed cost US$ 5.00
• Free minuteson net 50 off net 20
• OG on net 5 cents/minOff net 7 cents/min
▪ Bfixed cost US$ 7.50
• Free minuteson net 75 off net 50
• OG on net 3 cents/minOff net 5 cents/min
▪ Cfixed cost US$ 10.00
• Free minuteson net 100off net 75
• OG on net 2 cents/minOff net 4 cents/min
o For all packages, below criteria applies:
▪ Peak hours usage is 70% of usage
▪ Off peak tariffs reduce by 25% from peak tariffs
▪ On net is 65% of the traffic
▪ Subscriber split is 50%, 30% and 20% on packages A B and C respectively
▪ Average monthly usage per subscriber is 300 MOUs on Package A, 500 MOUs on Package B and 800 MOUs on Package C
• For revenue projection, assume growth in usage of 5% per year with same call mix
Outputs Expected:
1. Revenue
2. Gross Profit
3. EBITDA
4. List of additional information/data points required to forecast Net Income
