African Communications Group : Who, What, How?

Topics: Consumer theory, Permanent income hypothesis, Income Pages: 2 (417 words) Published: September 29, 2011
First, let us assess ACG’s business model with the « Who, what, how » tool. Then, we will see if these choices fit together.

ACG offers to middle income clients living in cities, a reliable and well-priced card-operated phone service, including paging and voice mail. The supporting technology, radio, is reliable. The network of retailers is well located to sell the cards and notice the consumption.


ACG targets a stream of Tanzanian urban population (roughly 5,1M people in 1992). The customers must have enough purchasing power to get a card-operated pay phone, but cannot afford a cellular or a private line, so let us define them as middle-class. Most of them do not have access to any working phone (as a poll of customers seems to indicate). Possibly they want to make international calls to Europe, Asia or the US (some high income customers may enter this segment). People in transit may also use it. ACG does not focus on rural area, despite the fact that it accounts for 81% of the country population.


In a country where infrastructure was antique and poorly maintained, ACG offers an innovative and reliable pay-phone system. Customers use these cards to issue calls from local booths. It enables to call local, long distance and international destinations. As the technology supports it, ACG offers as well a paging and voice mail service


As far as distribution is concerned, cards will be sold by retail establishments. Price will vary from 0,87$ (local calls) to 34,72$ (international calls). The retailers are located closed to phone booths, so that they get a good visibility on the consumption and get motivated to sell. Their margin will be around 14%. As far as engineering is concerned, 10 booths are connected to a SR Telecom station, which is linked to a central transmission tower by radio. Calls are then bulked and transmitted from ACG headquarters to TTCL. This system should assure a good service level to users and requires...
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