Our client was a player in the telecom industry faced with competitive threats to its core business. They were looking for paths to grow revenue and ways to protect and leverage their core business. They also were looking to react to the economic shifts in their industry caused by a major shift in technology.
Our objective was to develop a strategy for entering the U.S. PCS (wireless phone service) market. The critical issue was viability of a potential PCS business model. To evaluate this prospect, we needed to understand demand for wireless service in terms of product offerings and penetration potential.
Additionally, we sought to model the attractiveness of various options, propose a strategy with the greatest chance of success, and identify partners that could potentially complement our clients’ skills and needs in this segment.
We first structured market research and synthesized results into strategic options. Looking primarily at potential cost structures of the PCS business, we identified the key economic leverage points for modeling. We then performed original research on new and future infrastructure costs to make our model more robust.
We modeled the integrated economics of the business, using the identified key issues and a range of possible parameters. This assisted us in developing an optimal strategy that included identification of potential partners, attractive geographies, and desired business model. We participated in negotiations with several potential partners which resulted in an operating joint venture.
The PCS Business Joint Venture has been established for the client and its partners have committed in excess of $3B towards development of the business. Our client is currently active in bids for PCS licenses and the operational organization is in the process of being staffed.