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Supply Chain case study

Sourcing Strategy for

AlphaTel
“AlphaTel” The Company
AlphaTel Limited is the largest telecom company which operates in two states (also called
as Circles) in the desert city of Botswana with a customer base of more than 5 Million. It
offers Mobile Services and is a leader from both revenue and customer market share stand-
point. The company currently has operations in 2 telecom licensed circles and is offering
2G, 3G and 4G (LTE) wireless services to its customers.
Large Capex investments are being done to serve the large surge in data and voice con-
sumptions due to competition from a new player offering mobile wireless services at
almost negligible prices. All the telecom players in the Industry (including AlphaTel) are
getting impacted due to the same. Being a market leader, an aggressiave tariff reduction
strategy as that adopted by new player is neither a sustainable nor advisable.
Over the years, AlphaTel has set industry standards in forming strategic partnerships with
the leading companies of the world to optimize synergies and come up with cost effective
solutions to create value for its customers. It is also known for its innovative contracting
models and is credited with pioneering the business strategy of outsourcing all of its busi-
ness operations except marketing, sales, supply chain and finance. Currently at AlphaTel,
telecom equipment is provided and maintained by Hylusia Wireless and Erion Network
Ltd. The towers are maintained by Initial Infratel which is a subsidiary company of AlphaT-
el.

About Circles/States
Circle APPLE
State of Apple is famous for its Apples and is located on the northern part of Botswana.
AlphaTel is the 2nd largest operator with around 2 Million subscribers.
For Circle APPLE in Botswana, Hylusia Wireless and Erion Network Ltd. are the partners
who provide network equipment to AlphaTel
Government of Botswana of Circle APPLE has allocated below spectrum band to AlphaTel
Spectrum Bandwidth (MHz) Current Tech
900 MHz 6 2G
1800 MHz 15 2G+4G
2100 MHz 10 3G
2300 MHz 20 TDD LTE

Current Scenario Erion Network Ltd Hylusia Wireless

900 Mhz-2G 3860 Sites 2692 Sites
1800 MHz(2G+4G FDD) 913 Sites 5639 Sites
2100 MHz(3G) 4666 Sites 0 Sites
2300 MHz(4G TDD) 0 Sites 3990 Sites

Note: Hylusia’ s TDD Sites co exists with existing 2G /3G/FDD Network from Erion. Also
Erion’s 3G Sites co exists with Hylusia’ s 2G/FDD/ TDD Network

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As Ericon Network was an existing partner in Circle APPLE for last 8 years so their equipment
in 900 MHz was only 10% usable (4G ready) whereas in 1800 MHz as 80% equipment were
usable(4G ready) and in 2100 MHz only 64% equipment was usable( 4G Ready).

As for Hylusia Wireless, the equipment were recently deployed and all their equipment are
100% usable and 4G ready
As the competition in Circle APPLE is rolling out more sites to give coverage and capacity, to
keep up with the competition, AlphaTel is also planning to rollout more sites in Circle APPLE to
suffice the coverage and capacity requirements.

Current Scenario AOP (Annul Operating Plan) 2nd Year Expansion

900 MHz 318 Sites 3,822 Sites
1800 MHz 1,572 Sites 2,568 Sites
2100 MHz 0 Sites 3,516 Sites
2300 MHz 2357 Sites 1,943 Sites

*Note: The above numbers are not cumulative

Circle ORANGE
State of Orange is famous for its oranges and is located on the southern part of Botswana.
AlphaTel is leading operator with around 3 Million Subscribers.

Government of Circle ORANGE has allocated below spectrum band to AlphaTel

Spectrum Bandwidth (MHz) Current Tech
900 MHz 10 2G
1800 MHz 15 2G+4G
2100 MHz 10 3G
2300 MHz 30 TDD LTE

Current Scenario Hylusia Wireless

900 Mhz-2G 8497 Sites
1800 MHz (2G+4G FDD) 7945 Sites
2100 MHz (3G) 4732 Sites
2300 MHz (4G TDD) 2894 Sites

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Hylusia Wireless is the only partner in Circle ORANGE and provides all the site network
equipment. All their equipment is 4G ready and usable

The situation is similar to that of Circle APPLE, wherein there is a stiff competition, so in

order to suffice the coverage and capacity requirement, AlphaTel has to rollout more sites
Current Scenario AOP 2nd Year Expansion
900 MHz 1,345 Sites 1,456 Sites
1800 MHz 2,316 Sites 1,934 Sites
2100 MHz 956 Sites 654 Sites
2300 MHz 2100 Sites 2,456 Sites

*Note: The above numbers are not cumulative

Supply Market Overview

Apart from existing partners Ericon Network and Hylusia Wireless, there is another partner
which exists in Botswana by name of Sunyong Technologies .They currently supply network
equipment to AlphaTel’s competitor Ideyong.

Problem Statements

In order to deal with above situation, you need to answer the below questions to enable
AlphaTel to reduce CAPEX Investment and rollout complete 4G in Botswana
a. Whom should we select as a partner in Circle APPLE in Botswana
b. What is the commercial model we should follow to offer business to partners
c. What will be the overall sourcing strategy in Botswana?

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