Case: African Communication Group
This report describes the Business model developed by African Communications Group (ACG) in Tanzania during the mid‐1990s, based on an analysis of the customers (WHO), the product offered (WHAT) and the ways used to get the market (HOW). Finally, the strategies and tactics adopted by the company are presented, showing how these tree elements converge in the same direction. By 1992, ACG bet for Tanzania, mainly because ACG was a young American company trying to develop a new market and this country doesn’t call the attention of the large telecom players. Tanzania had the highest backlog in Africa for telephone service, which was delivered by the State. With less than 80,000 telephone lines for a population of 27 million, the ratio of phones per person in the capital was around 1/100 and in rural areas 1/2,000. With an economy based on agriculture in rural areas, the main consumers of telephone services were the business people, who had to pay excessive fares. Even though the country presents several difficulties, the opportunity to develop a new platform of telecom services was interesting considering that by 1995, the demand for telephone services was 500,000 and the main public locations didn’t have phones. Furthermore, the demand for international calls (tourists, expatriates, business travellers) was considerable and unsatisfied. In addition, for other services as paging, ACG anticipated a base of 10,000 subscribers. In order to get this market, ACG considered an innovative pay phone system that didn’t require copper wire between outstations and ACG’s central platform; the use of wireless radio was a new concept that could be adapted to other markets and allowed ACG to operate on only one connection to TTCL, which operated the ...
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