Paragraphs highlighted in green indicate diagrams or tables that shall be shared in the “Case exhibits” section.
Paragraphs highlighted in blue shall be verbally communicated to the interviewee.
Paragraphs highlighted in orange indicate hints for you on how to guide the interviewee through the case.
At case commencement:
Share Diagram 1 with the candidate.
The following structure provides an overview of the case and structure to apply:
Background Information
Provide the following information to help the candidate with making assumptions for market sizing:
Average broadband contract length – 2 years
Average fibreoptic broadband service price – $500/year
Fibre Optic penetration rate – 5% of households
I. Calculating Market Size
With the information above and the candidate's assumptions, we can go ahead and calculate the market size.
The candidate should explicitly state that they will use market size as a proxy for the size of the opportunity.
a) Structure market sizing calculation
Market Size = (Price) * (Volume)
B2C spend in fibre broadband = (Avg. price) * (# of addressable HHs in Y1)
b) Identify data / make assumptions to calculate
Provide the
following background information ONLY when asked by the candidate:
B2C spend in fibre broadband = (Avg. price) * (# of addressable HHs in Y1)
 Price = $500 / year
A strong candidate will point out that this will segment by income level of customer and likely skew market size but that $500 is a fair assumption.
 Addressable HHs
 Population = 100M
Candidate should make a reasonable guess between 80100M. Interviewer to prompt the candidate to assume 100M if their guess is within that range.
 Persons per HH = ~3
Candidate to make a reasonable assumption given a young, emerging market infers larger households, and globally HHs around 2.
Total HHs = 33M (candidate may round down to 30M for ease of calculation)
 Penetration rate = 5% of HHs
HHs with fibre broadband = 1.65M (assume 1.5M for ease of calculation)
 HHs that will be out of contract each year = 50% (as 2year contract)
Given the case asks to estimate the market opportunity in Y1, the candidate should be able to correctly recognise that if the average contract length is 2 years, that in order to estimate potential customers in Y1 (i.e. those eligible to switch by being out of contract), this will be 50% of the total customer base (half of the twoyear average term).

Fibre HHs that are addressable = 750,000
So, total market opportunity = 750,000 HHs * $500/yr = $375M / yr
II. Payback Period
After completing market sizing, share this information with the candidate:
"The CEO agreed with your market sizing and has decided to take your recommendation. LightFast now plans to rollout in one city district in Jakarta (called District A) to prove the business case. But the CEO would like to understand how long the payback period would be if he were to go ahead. How would you think about that?"
Share Table 1 with the candidate.
Provide the following background information
ONLY when prompted by the candidate for "investment costs, CAPEX, uptake, OPEX, profit, or expected costs":
 Typical uptake of broadband per district (avg. over 5 years) = 50% of HHs subscribe
 Typical length of cable needed = 0.5km per HH in a district
 Connection cost = $100 per HH connected (oneoff charge)
 Infrastructure cost = $1,000 per km of cable (oneoff cost)
 Typical operating profit margin = $150 per HH per year
a) Structure payback period calculation
Payback Period (years) = Total Investment / Annual Operating Profit

Total Investment = CAPEX to rollout fibre + connection cost per household that signs up
HHs in District A = 250 (inferred from table)
HHs connected = 50% * 250 = 125 (given uptake of 50%)
CAPEX to rollout fibre = $1,000 per km * (250 HHs * 0.5km per HH) = $125,000
Connection cost = $100 * 125 (HHs connected) = $12,500
Total Investment = $125,000 + $12,500 = $137,500

Operating profit = # of HHs connected * Avg. operating profit per HH
125 HHs * $150 per HH per year = $18,750
Total Operating Profit in Y1 = $18,750
A strong candidate would point out that they will assume this profit stays constant each year to calculate the payback period as given the uptake if 50% averaged over 5 years. But he or she will also point out that it is likely that the HHs connected will ramp up in reality and so profit will ramp up, too.
Payback period = $137,500 / $18,750 = 7.3 years
III. Discussion of key factors to determine go/nogo decision
Interviewer to read out: The CSO of LightFast has seen the payback period and market size and overall is happy with the decision to go ahead and relaunch service in Indonesia starting with District A. He is pleased with your work helping this decision!
What other factors would you advise the CSO to assess beyond the market size and payback period?
Candidate to apply a market entry framework mentioning factors:
 Level of competition – aggregated or disaggregated
 Local regulation – difficulty in getting licensed to launch
 Other technologies – lowercost alternatives to deploy