US multinational tech company, commercial due diligence
Situation
An American multinational technology company and its private equity (PE) partners sought assistance in assessing an investment in metro fibre in two Sub-Saharan African (SSA) countries. Additionally, they aimed to expand their market presence into six other SSA countries.
Approach
We spearheaded the market assessment of this due diligence and regional expansion. We collaborated with the company’s central team and local business development teams, reviewing their existing documentation. We delved into the SSA region, evaluating opportunities in seven countries, considering factors such as macroeconomic conditions, market potential, competition, regulatory environment, and demand analysis. He ranked the proposed new markets based on these factors.
We assessed both the consumer and enterprise segments of the wholesale market for Mobile Network Operators (MNOs) and Internet Service Providers (ISPs). We analysed market drivers such as urbanization, player concentration, and the affordability of services and smartphones. Subsequently, we developed forecasts for subscriber base and data usage in each country.
To create a site take-up rate and market share forecast, we analysed all players (ISPs, MNOs, Fixed Telcos, Cable Operators, Tower Cos) and their services, identified potential clients, and assessed the existing metro infrastructure. This analysis provided crucial input for the technical model (number of metro fibre sites for MNOs and ISPs) and the financial model (Capex/OpEx, IRR).
Finally, we contributed to the business plan review, go-to-market strategy, product/pricing strategy, and risk analysis.
Results
The technology company and its PE partners adopted the report’s recommendations, deciding to stabilise the operating model in the existing two countries before expanding to the two SSA regions we had prioritised.