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Raj

LightFast - Launching high-speed broadband in Indonesia

Case information

Difficulty: Advanced

Candidate-led

100+ Ratings

Times solved: 6.4k

Market analysis Market sizing Market entry New product Profitability analysis Growth strategy

Case Prompt:

Your client is the CSO of LightFast, a Middle-Eastern telecoms and media player. They are a national incumbent player who expanded operations into South-East Asia and North Africa in late 2010s. Their operations in Indonesia include pay-TV and fibre-optic broadband. However, the broadband business has flat-lined since launch.

LightFast is now looking to reset its Indonesian subsidiary and has asked you to advise them on whether they should re-launch or close operations.

They would like you to advice on the size of the opportunity if they were to re-launch in Y1, estimate the expected payback period and then highlight key considerations to make a go/no-go decision.

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Sample Structure

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0. Background Information

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I. Calculating Market Size

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With the information above and the candidate's assumptions, we can go ahead and calculate the market size.

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

B2C spend in fibre broadband = (Avg. price) * (# of addressable HHs in Y1)

Total market opportunity

1. 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.

2. Addressable HHs

a) Population = 100M

Candidate should make a reasonable guess between 80-100M. Interviewer to prompt the candidate to assume 100M if their guess is within that range.

b) Persons per HH = ~3

Candidate to make a reasonable assumption given a young, emerging market infers larger households, and globally HHs around 2.

c) Total HHs = 33M (candidate may round down to 30M for ease of calculation)

d) Penetration rate = 5% of HHs

HHs with fibre broadband = 1.65M (assume 1.5M for ease of calculation)

e) HHs that will be out of contract each year = 50% (as 2-year 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 two-year average term).

Fibre HHs that are addressable = 750,000

So, total market opportunity = 750,000 HHs * $500/yr = $375M / yr

II. Payback Period

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III. Discussion of key factors to determine go/no-go decision

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Further Questions

An excellent candidate would use Diagram 1 (map of Indonesia), to identify a fourth factor being

Geography – impact of disparate islands on cost of deploying cables and suitability of fibre vs 4G?

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on Mar 06, 2021

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LightFast - Launching high-speed broadband in Indonesia i

Case Prompt:

Sample Structure

0. Background Information

I. Calculating Market Size

II. Payback Period

a) Structure payback period calculation

III. Discussion of key factors to determine go/no-go decision

Further Questions

LightFast - Launching high-speed broadband in Indonesia