All experts agree that the next billion mobile cellular subscribers will come from rural areas in developing countries. The governments of these same countries also claim that it is essential for new mobile operators to focus on a province or a part of the territory. The geographical approach will therefore have to be favored over aggressive marketing, especially as current users tend to complain about the poor quality of existing networks.
Nevertheless, opinions are unanimous in asserting the very high costs of setting up a mobile telephone network in rural areas. Thus, for lack of alternative or determined competition to cover the whole territory, rural populations are not able to benefit from such service. Moreover, we note that the rate of equipment of urban populations in 4G equipment is increasing sharply each year (about 150%).

It is to this end that the company Rural Network (RNET) specialists in African markets, want to implement an innovative solution and solidarity offered through its company LOKOLE TELECOM The government is even the first to encourage this development. It is necessary for the country, a network of communication extended, powerful, which answers the obligations of the Universal Service.

As early as 2011, international experts noticed that the penetration rate of telephony equipment was increasing considerably in the coming years. The project leaders agreed to invest several million dollars, despite their in-depth knowledge of the African market, to commission experts to carry out preliminary studies on the subject and to verify that such a deployment was possible in the country.

It proposes to equip the rural population living in the Democratic Republic of Congo relay antennas for the installation of a mobile phone network. The Democratic Republic of Congo (DRC) is a country whose surface is equivalent to Western Europe with a density 4 times lower. Currently, it is estimated that there are nearly 4,000 villages in DRC that are not covered by mobile phones. The LOKOLE TELECOM company wishes to be able to offer their users mobile reloading services, instant money transfer, or electronic banking.

THE PROJECT

A) The major innovation focuses on four aspects:

La solution de base est la solution éthique et solidaire des solutions purement financières.
La proposition d’une solution beaucoup moins coûteuse pour l’installation de ces antennes.
La naissance d’un acteur africain sur un marché porteur d’innovation technologique.

B) PRESENTATION OF THE PROJECT HOLDERS

RURAL NETWORKS COMPANY (R-NET), , which includes the license of GHI, is the carrier of this project, and will operate rural telephony under the new company LOKOLE TELECOM, (LOKOTEL), a Congolese telecommunications company based in the Democratic Republic of Congo and currently acting as a mobile network integrator in Africa.

RNET is mainly recognized for its consideration of rural areas in its mobile network deployment strategy. A major African national group, R-NET makes a point of integrating local populations into the deployment of its mobile networks. A true creator of jobs, R- NET actively participates in the economic development of rural areas in Africa.

Rural Networks is currently managed by :

	Maurice Castel Balimaka Chief Executive Officer of LOKOLE TELECOM Master in International Law, Special License in International Relations, Consular and Diplomatic, 32 years of experience in negotiation and Business Administration, Corporate Director, Honorary Minister.
	Gilbert Nkuli Yen Yengani Deputy Chief Executive Officer Telecommunications Engineer, 40 years of experience in the Telecommunications sector (Renatelsat, Comcell, CWN-CellNet, Vodacom).
	Johan Bureau Director Technical Director Has extensive international experience in Telecommunications and Transportation. He led the implementation of business solutions in Africa and the Caribbean. He has deployed transport infrastructure and supervised research projects that support the strategic decisions of telecom operators. Work for 14 years exclusively in Africa in the fields of transport, information systems, civil engineering and operational deployment.
	Pittala Rajya Lakshmi Director Chief Financial Officer Accountant, Experience in budgeting and strategic planning in Congo for 15 years.

STRATEGIC AND TECHNICAL PARTNERS
– NURAN Wireless – CANADA
– AMOS SPACECOM – ISRAEL

II) ACTIVITIES AND STRATEGY

A) ECONOMIC ACTIVITY AND MODEL

The activity of LOKOLE Telecom will be based on the installation and operation of mobile phone antennas. These rural populations will be able to benefit from all the services of a mobile operator; to complete their offer, LOKOLE Telecom will offer traditional mobile telephony services, mobile charging services via terminals, credit transfers and all electronic banking services.

The company plans to install the first antennas in October 2016, at the rate of 10 sites per week (mature pace). Before considering a densification of its network, the company LOKOLE Telecom wants to implement 5,000 antennas in rural areas in the next 10 years.

The total amount for the commissioning of a radio antenna will be approximately $ 100,000, which is quickly amortized in view of the number of people who will be covered by this service.

The support of the Congolese government in this project is real as this project promises a rapid economic development of the country. So after the operating agreement on the license. In parallel with the purchase of this license for a 25-year operating life, LOKOLE Telecom is committed to training people in telecommunication trades.

The objective of LOKOLE Telecom is to set up call centers in these villages and around the various antennas. Through this opportunity, the company wants to be able to create a local dynamic and develop a number of sales outlets (schools, offices, markets …) .

The deployment of the network will first pass through the installation of radio antenna, then then this deployment will be completed by the addition of digital and data functions.

The economic model of the project is the same as that of the market leaders: the payer of the transfer wishing to transfer a sum of money pays a commission to the transfer company, calculated on the basis of the amount sent.

In addition, subscriptions will be offered to the population taking into account the purchasing power of local populations and their needs. The LOKOLE Telecom company aims to cover 80% of the territory in the next 10 years.

To achieve their objectives, it will be essential for the company to deploy its antennas with great speed and a certain geographical logic. In order to be able to play on the speed of deployment it will be imperative for the company to secure the routing paths to the different sites.

The existing road infrastructure and the large area of the territory will require specific logistics adapted to efficiently convey the materials on site and administer them.

For this type of project, success depends in part on the number and trust of partners. That is why the company LOKOLE Telecom will have to invest significant sums for the installation of each site, it is therefore noted that the WCR of the activity will be very important. To follow its deployment goals across the country, the company will have a return on investment of less than 4 years.

LOKOLE Telecom has been granted a 20-year license by the Congolese State, and has been allocated a 900 MHz band and a 1800 MHz band capable of radius of 10 to 15 kilometers around the site where the antenna will be installed. Mobile phone line deployment in these areas is part of a dynamic economic development of these areas; In this sense, the company LOKOLE Telecom has reached an agreement with the Congolese government to train local populations in telecommunication trades.

B) MIX MARKETING

→ Product Policy and Prices

The rapid deployment of pylons and the mobile phone offer, customers will be able to benefit from SMS, MMS, VMS, Internet and M-Banking services within a radius of 10 to 15 kilometers around the newly installed site. The company will have one year to launch and equip about 300 villages with a mobile phone service.

A system of pre-payment, mobile reloading, at an affordable price, that is to say, taking into account the low income of rural populations in the Democratic Republic of Congo, will be offered to residents.

Mobile telephony is one of the sectors where the return on investment is a key indicator to monitor. In this sense, a site will have to be profitable from the first months of commissioning; from $ 4,000 / month a site will become profitable.

In view of local and more generally continental considerations, LOKOLE Telecom is considering the development of a money transfer service by internet platform to facilitate these money transfers; as a reminder, there is currently no provincial distributor of silver in the DRC. In addition to the price of the SIM card, users will be able to benefit from the services of the operator only by reloading (that is to say prepayments)

→ Distribution Strategy

The services offered by the company LOKOLE Telecom, SMS, MMS, VMS, Internal, Mobile Banking, will be connected to the same satellite and centralized in Kinshasa, at the headquarters of the company. It will obviously be centralized a service MSC (Mobile Switching Center) to establish the connection with a correspondent, to alleviate malfunctions, a high demand punctual or a need to replace a station BTS GSM by another for a given time. All calls made from a village will be first retrieved by the satellite, then forwarded to the MSC and finally the connection will be established with the requested party.

A BTS GSM station is able to meet the requests of 1,000 users within a radius of 10 to 15 kilometers, in this sense, a second station can be installed to improve the quality of service and streamline the network. The company LOKOLE Telecom has indeed been granted a license of a band of 900 MHz and 1800 MHz, capable of covering large areas and allowing a large number of simultaneous calls without loss of quality at the service level .With regard to national calls, these stations will be interconnected (via a national rooming system) to those of other operators based in the Democratic Republic of Congo. The presence of LOKOLE Telecom in rural areas will allow other operators to benefit from relay points in areas not covered by their services and vice versa.

The telephone operator LOKOLE Telecom wants to be surrounded by a reduced number of distributors (between 5 and 6) to distribute its products. This indirect network could be supplemented by the presence of LOKOLE Telecom agency in the regional capitals. System maintenance will be possible remotely via the maintenance center, which is located next to the monitoring center. The attribution of the sites will be done on a case by case basis. Pre-installation surveys will determine the suitability of the location. These surveys will be carried out systematically (an envelope of $ 9,000 is planned for each site) by technicians on site.

The sites, with an area of 100m 2, will be surrounded by a fence and monitor permanently by a guard. It should be noted that securing of these sites plays in favor of these villages since it allows an economic development of the region.

An antenna will have to be able to cover 10 to 15 kilometers of “bush” and will thus be able to benefit to different villages. The installation of a new antenna should capture between 25 and 30% of the population in the first year. To ensure good communication around its services, LOKOLE Telecom plans to density its presence in areas where it is already established to improve the quality of its service

→ Commercial strategy

OKOLE Telecom’s communication will essentially highlight the quality of its network in rural areas,
currently not served by other operators, as well as its speed of deployment.

To accelerate its development, technical sales staff will be responsible for building relationships with local stakeholders (shops, schools, shops, parishes …) to operate and secure the various sites, under a contract of collaboration. These sites, apart from their ability to transmit calls, will be official sales points for the various services offered by LOKOLE Telecom.

The operators of these sites will of course be remunerated through the sale of these products and services. The objective is obviously that these communication centers become centers of economic development for these rural areas through the creation of jobs. The communication of LOKOLE Telecom will be based on an aggressive marketing mixing press actions, televised spot, posters …

Well aware that the brand image is a non-negligible point in the development of a company, especially in the case of a telephone operator. LOKOLE Telecom wishes to surround itself with a graphic design team as well as an outsourced marketing department, in charge of setting up an effective communication strategy for the Congolese populations.

C) ROAD SHEET

Phase 1 Organization and Startup
Birth of the concept, construction of the sales process, development of the Mix Marketing.
Realized
Phase 2 Business Plan
From the perspective of a search for financing, it is necessary to write a business plan presenting the entire creation project.
Realized
Phase 3 Search for financing
Active phase of research of public, banking and / or private financing.
In progress
Phase 4 Launch of the activity
Scheduled for July 2019
To achieve

Phase 5 Growth
Development of the business in order to reach a representative turnover.

To achieveThe short and medium term development objectives are:

The arrival of a key partner, specialized in TELECOM ensuring the technological realization in its entirety
Seeking funding for the launch of the project
Securing material supply routes

III) THE BUSINESS SECTOR OF MOBILE TELEPHONY

A) ISSUES AND STATE OF THE MARKET

The telecommunications sector is defined as the remote transmission of information with basic electronic and computer resources. These flows of information between people represent major challenges for their beneficiaries and :
– Exchange information orally
– Access to information solution

The Democratic Republic of Congo, like any African country, is a source of tension and greed. Local geopolitics will therefore be a key element in the success of this project.

In terms of the state of the sector, at present the money transfer market can be defined as a growing market in developing countries. Indeed, despite significant competition intensity, in particular due to the relaxation of regulations, the number of users currently not equipped remains excessively important. In this sense, prices are generally down.

B) KEY FIGURES

On January 1, 2000, the DRC had only 350,000 telephone subscribers (penetration rate of 0.7%). In 2013, they are 18 million subscribers (penetration rate of 25% in 2013).
Access to mobile internet by 4G is increasing its number of users by 150% per year. Currently, there are nearly 6,000,000 subscribers.
It is estimated that 30% of the territory of Democratic Republic of Congo currently covered in mobile telephony. Nearly 4,200 cities are currently waiting for mobile phone coverage.
The Democratic Republic of Congo is currently dominated by 4 major players: Vodacom, Airtel, Orange, Africell. Their strategy relies on the solidification of their network. Mobile operators announce 49% penetration rate (first half 2015 figure).

C) REGULATIONS

From the end of the 90s until the beginning of 2010, the telecommunications sector in the Democratic Republic of Congo was marked by the decline of public telecommunication networks, in favor of the rapid development of mobile networks.

This upheaval is mainly due to the introduction of institutional reforms allowing the opening of markets and the liberalization of mobile telephony services. Law No. 14-97 of May 26, 1997, which limited the state’s monopoly on the provision of basic services (telephone, telegraph and telex), goes further by liberalizing all these services.

With regard to competition, it should be noted that the laws applied in the DRC are similar to the international laws of the sector.

D) MARKET ACTORS

→ The banks

Banks are the preferred partners of money transfer operators, as are Posts. Although they are no longer unavoidable, they strongly favor consumer confidence. Their weak point is their absence in many areas of the territory with an agency for 250,000 inhabitants. The company LOKOLE Telecom will face competition from banks on its offer of mobile money transfer service.

→ Competition The leaders

	Airtel Without doubt the most widespread operator in the Democratic Republic of Congo, it has one of the best national coverage among all the actors.
	Vodacom Just like Airtel, Vodacom is a major player in mobile telephony in the DRC. Currently, this network is used “for want of something better” in the words of subscribers who are waiting for the emergence of a new operator in the country.
	Orange Orange has just finalized last April the acquisition of operator Tigo. This acquisition is part of the development of Orange in Africa, and plans to strengthen its presence and improve its services.
	Africell Africell is a mobile network operator belonging to the Africell Holding Group. Present in the Gambia, Sierra Leone, the Democratic Republic of Congo and Uganda. Set back from its competitors, Africell has a 4G license that it operates in the DRC since March 2015.

E) PERSPECTIVES OF EVOLUTION

Despite the presence of many competitors in the Democratic Republic of Congo, international experts say, there is room for a new mobile operator. The main difficulty for current operators is the loyalty of their customers, particularly because of the poor quality of the services offered.

The territorial approach as a launching strategy in this market is imperative and should reduce deployment times in these rural areas. Settling well in these rural areas should help to retain these new subscribers and attract unsatisfied subscribers.

To successfully enter the Congolese market, it will be essential for LOKOLE Telecom to adapt its service offering and take into account the realities on the ground.

V) The catchment area

→ Geographical area

The Democratic Republic of Congo is a country on the surface equivalent to that of Western Europe, but with a population four times lower (of the order of 13 inhabitants per square kilometer); the north-east of the country is particularly sparsely populated (between 0 and 2 inhabitants per square kilometer). For example, the country has no more than 15 cities with more than 10,000 inhabitants. The DRC is a country of more than 67 million inhabitants, making it the fourth most populous country in Africa.

The company LOKOLE Telecom has chosen to locate in rural areas of the country, currently neglected by local telephone operators. As the country is 30% divided by urban areas and 70% by rural areas, the market potential is relatively large. According to the latest figures, more than 4,200 cities would benefit from proper access to mobile telephony.

For 10 years, we have witnessed a certain political stability, a reassuring element for investors. The country lives mainly from the production hydrocarbon and wood exports..

→ Potential consumers

The number of mobile phone users has grown from 300,000 to 35,000,000 in 15 years and today reaches a penetration rate of 49% (2015 figure). Thus more than half of DRC’s population, more than 30,000,000 people, can be considered as potential consumers, especially since competitors do not currently intend to develop in these areas. regions.

Current users of mobile services regularly point to poor service quality, network problems, and sometimes inaudible conversations. The marketing that plans to put on the beach the company LOKOLE Telecom should help to recover some of these unsatisfied users.

VI) SUMMARY ELEMENTS

A) SWOT

Facteurs internes	Forces	Faiblesses
Offre	→ Offre quasi inexistante à l’heure actuelle → Politique prix très compétitive	Temps de déploiement relativement long pour être compétitif
Marketing	→ Marketing agressif → Mécontentement des utilisateurs vis-à-vis des offres actuelles	→ Fidélisation des utilisateurs très délicate
Personnel	→ Expériences dans les télécommunications → Ont déjà entrepris plusieurs projets
Finance	→ Déploiement rapide possible → Apport important possible	→ Coût d’investissement très important → Nécessité d’un retour sur investissement inférieur à 4 ans
Facteurs externes	Opportunités	Menaces
Demande	→ Pays en voie de développement, de plus en plus demandeur	→ Nouvel entrant sur le marché, craintes des utilisateurs
Concurrence	→ Se concentrent sur la stabilisation de leurs réseaux	→ Capacité à se déployer beaucoup plus rapidement → Repositionnement des autres opérateurs
Zone de chalandise	→ Millions d’abonnés potentiels	→ Renversement politique
Perspectives d’évolution	→ Couverture nationale et amélioration de la qualité des services	→ Couverture des zones urbaines pour compléter l’offre

B) FACTEURS CLÉS DE SUCCÈS

→ Local development strategy.

It will be essential that the company LOKOLE Telecom orient its development according to a territorial strategy and that it communicates in this direction.

Reduced cost: The BTS GSM solution that LOKOLE Telecom will use will work thanks to solar energy. Thus, installation, commissioning (no more than 4 hours and requiring no special skills), and maintenance (managed remotely), will reduce costs and thus be competitive.

→ Aggressive Marketing

La fidélité des utilisateurs sera un facteur déterminant au regard des exigences exprimées par eux.

Warnings to readers:

The report presented below presents the strategic and financial forecast data of the project.

We recall that the projections made are indicative and remain dependent on the vagaries of the market and economic factors that can not be modeled in the context of the present.

The hypotheses retained have been communicated by our client and have been validated in terms of relevance and consistency by our firm.

VI) FINANCIAL DOSSIER

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LOKOLE TELECOM – Financial Dossier