The client, a private equity firm, had a need to determine viability of a project they had been approached to fund by two service providers offering services in a ‘greenfield’ area of telecommunications in South Africa.
The following key questions needed answering:
- Confirm market size assumptions and drivers for growth in the market, and the practicality of the underlying business plan.
- Assess the position of the project sponsors, including their strengths and weaknesses vis-à-vis those of competitors.
- Consider the impacts of regulatory interventions and permissions.
The solution approach
BMI-T approached this project in a two phased manner. In Phase 1 we provided client with information on the market under investigation that included technologies being used, developments in similar markets internationally and profiles on the service providers requiring funding. This feedback allowed the client to get an overall understanding of the market and also get a view of how the project sponsors are positioned in the market.
Phase 2 outputs narrowed down to actual market viability and this involved formulating alternative scenarios based on overall market direction, as well as opportunities and threats that could lead to a deviation of the baseline scenario.
The outcomes or the project
The client was presented with both qualitative assessment and quantitative market and scenario outcomes models, which formed the primary input into the decision of whether or not to fund the venture