Strategic support for the launch of fixed internet connectivity and landing of submarine cable

The problem

• Our client, a cloud service provider, was considering launching an enterprise-focused ISP business including landing its own submarine cable in a highly regulated Middle Eastern country
• We were engaged to provide strategic, technical, regulatory and business planning support to develop the business plan for both the ISP business and the submarine cable business considering various connectivity and product offering scenarios

The solution

• We first performed a detailed assessment of the domestic and international connectivity market from a market demand, supply-side (market structure for domestic connectivity and available capacity for international connectivity) and regulatory perspective, which then led to the definition of potential scenarios for the client to offer connectivity services to enterprise customers
• As part of this, we engaged with the regulator to understand in detail the current regulatory framework and licensing requirements. We also conducted a detailed assessment of our client’s network architecture and identified key gaps/challenges the client should work on
• We developed possible business models for the ISP business and explored other options for getting international access to the traffic generated from it
• Finally, we created a bottom-up business case for both the ISP and submarine cable operations, including revenue, opex and capex projections and a discounted cashflow (DCF) valuation of the opportunity

Figure: Planned network diagram with logical connectivity

The result

• Our report was presented to the senior leadership of the client’s organisation. The client adopted our recommendation on the business opportunity
• Our client also used our analysis and recommendations to apply for a telecoms licence and to make an informed decision on the capacity to purchase on the submarine cable and for negotiations with potential vendors