Teledesic Case Study

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Teledesic Case Study

  1. 2. Agenda <ul><li>Company Overview </li></ul><ul><li>Project Overview </li></ul><ul><ul><li>Technology Involved </li></ul></ul><ul><ul><li>Market Analysis </li></ul></ul><ul><ul><li>SWOT Analysis </li></ul></ul><ul><li>Financial Analysis </li></ul><ul><li>Challenges </li></ul><ul><li>Recommendation </li></ul>
  2. 3. Company Overview <ul><li>Broadband Data Communication Service Provider </li></ul><ul><li>Founded in 1994 by Craig McCaw </li></ul><ul><li>Major Stake Holders </li></ul>
  3. 5. Project Overview “Bridge Digital Divide” <ul><li>Technology Involved </li></ul><ul><li>Technology Advantage </li></ul><ul><li>Market Analysis </li></ul><ul><ul><li>Current Market </li></ul></ul><ul><ul><li>Customer Base </li></ul></ul><ul><ul><li>Competitor Analysis </li></ul></ul>
  4. 6. Technology Involved <ul><li>Constellation of 288 LEO satellites for providing Data Communication Service </li></ul>
  5. 7. Technological Advantage
  6. 8. Market Analysis <ul><ul><li>Current Market </li></ul></ul><ul><ul><li>Customer Base </li></ul></ul><ul><ul><li>Competitor Analysis </li></ul></ul>
  7. 9. Current Market <ul><li>Internet Access Market </li></ul>Values in million <ul><li>Growing @ 1million/yr </li></ul><ul><li>Reach via ISP(whole sale capacity) </li></ul><ul><li>Use T1 Services </li></ul><ul><li>Growing @ 0.5million/yr </li></ul><ul><li>Reach directly </li></ul><ul><li>Use T1 Services </li></ul><ul><li>Need speed & reliable source </li></ul><ul><li>Can charge premium </li></ul><ul><li>Growing @ 6.6%/yr </li></ul><ul><li>90% population in metro </li></ul><ul><li>Use DSL, Dialup </li></ul><ul><li>Need speed @ low cost </li></ul><ul><li>Can Resale Capacity </li></ul>Data of 2003 (rapid change in 5 yrs)
  8. 10. <ul><li>Access Methods - Enterprise </li></ul><ul><li>M/S drop by 23% </li></ul><ul><li>Requirement of speed </li></ul><ul><li>Willing to pay more </li></ul>Values in % Data of 2003 (rapid change in 5 yrs)
  9. 11. <ul><li>Access Methods – Home Business </li></ul><ul><li>Dial up M/S drop by 46% </li></ul><ul><li>High speed technologies acceptance </li></ul><ul><li>High Speed @ Low Cost </li></ul><ul><li>Cable M/S boosted by 33% </li></ul><ul><li>DSL came & acquired 12% market </li></ul>Values in % Data of 2003 (rapid change in 5 yrs)
  10. 12. <ul><li>Access Methods – Consumer </li></ul>Values in % <ul><li>Dial up M/S drop by 36% </li></ul><ul><li>High Speed @ Low Cost </li></ul><ul><li>Cable M/S boosted by 24% </li></ul><ul><li>DSL came & acquired 10% market </li></ul><ul><li>High Cost so limited consumers </li></ul><ul><li>Huge amount of untapped market segment </li></ul>Data of 2003 (rapid change in 5 yrs)
  11. 13. <ul><li>Dialup consumption↓ price constant </li></ul><ul><li>DSL, T1, Cable price↓ consumption↑ </li></ul>
  12. 14. Customer Base
  13. 15. Customer Base
  14. 16. Competitor Analysis <ul><li>80 LEO @ 930 miles </li></ul><ul><li>Complex Ground Segment </li></ul><ul><li>Gateway System (slow & Expensive) </li></ul><ul><li>Regulations & Approvals not received </li></ul><ul><li>Launch cost higher </li></ul><ul><li>Low Speed </li></ul><ul><li>Less Reliable </li></ul><ul><li>Limited Coverage </li></ul><ul><li>High Cost </li></ul><ul><li>Low Speed </li></ul><ul><li>High Cost </li></ul><ul><li>Entry Barriers(Capital & Regulations) </li></ul>Per Unit Cost for launch Sky Bridge $12.5m Teledesic $8.68m
  15. 17. SWOT Analysis
  16. 18. Financial Analysis
  17. 19. Challenges <ul><li>$1.5bn present </li></ul><ul><li>$7.5bn promised </li></ul><ul><li>Failure of Iridium & other narrow spectrum </li></ul><ul><li>Telecomm Stock price LOW </li></ul><ul><li>High Risk </li></ul><ul><li>2 International Agencies </li></ul><ul><li>200 National Agencies </li></ul><ul><li>Different Countries Different Costs </li></ul><ul><li>Language & Currency Issues </li></ul>
  18. 20. Recommendations <ul><li>Appoint a technology partner </li></ul><ul><li>Deal should be auctioned where more than 1 partner </li></ul><ul><li>Appoint local partners to get local radio spectrum licence </li></ul><ul><li>Look for less traditional investors </li></ul>
  19. 21. Thank You

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