fiber optics project in jeddah-ver 01

Business Plan

for

Telecommunications Sector

OSP (LDN, FEP & FTTX)

Prepared By:- Sharif Anwar Project Manager OSP (Fiber Optics)

Nawazinda Telecom Technologies, P.O.Box:- 220089, Riyadh:- 1311,Saudi Arabia. Phone:- +966 1 403 1268 Fax:- +966 1 402 6618, Cell:- +966 506790124 / 564387877 E-Mail:- [email protected] Web:- www.nawazgroups.com

mailto:[email protected]

http://www.nawazgroups.com/

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Table of Contents

1. Executive Summary .............................................................................................................................. 3

2. Objectives............................................................................................................................................. 3

2.1 Keys to Success ............................................................................................................................ 3

3. About OSP ............................................................................................................................................ 4

3.1 OSP Standards .............................................................................................................................. 4

3.2 Standards are beneficial because they: ....................................................................................... 5

3.3 Codes, Standards, and Methodology, continued ........................................................................ 5

3.4 About FTTP ................................................................................................................................... 6

4. The Market: Growth and Opportunities .............................................................................................. 7

4.1 Conclusion .................................................................................................................................... 8

5. Start-up Cost Summary of Project-01 .................................................................................................. 9

5.1 Financial Details of CSS Project-01 ............................................................................................... 9

6. Start-up Cost Summary for Project 02 ............................................................................................... 14

6.1 Financial Details of BZY Project 02 ............................................................................................. 14

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1. Executive Summary

The telecommunications revolution has arrived in Saudi Arabia: Personal communications and unified

messaging systems are at the vanguard of this technological phenomenon. Dating from the 1984

deregulation of local and long distance telephone service, competition has accelerated and sought out

every nook and cranny of telecom products and services for both consumers and businesses. From that

day only 15 years ago, when consumers were tied to a fixed phone with its fixed phone number, mobile

and cellular phones have proliferated to meet the demand for communication anytime, anywhere in

the world. Companies that have not foreseen change or kept up--are quickly consigned to the

technological and financial graveyard, Iridium being just the latest example. Financial muscle has been

displaced by quality and depth of management and speed of execution as the final arbiter in the

marketplace.

2. Objectives

This business plan prepared is to present the partner and make discussion on project. In particular,

discussion of new joint ventures for the partners to start new business in Class Level (Sub Contractor) of

Mobily, STC and Zain in Saudi Arabia. This business plan will provide background information and

outlines activities for carrying out business tasks. For each activity, specific minimum requirements are

provided to ensure the success of the deliverable. Finally, cost estimates are provided for each activity

along with a priority level. The primary objectives are:

To become the market leader in OSP services within one year

To become the lowest cost provider and drive an aggressive pricing model through the industry.

To have the best and most responsive customer service by year-end Year 1

To see a positive ROI by January 2012.

2.1 Keys to Success

There are keys to success for new business:

1. Marketing must generate sufficient business volume to drive an aggressive pricing model while still

achieving planned profitability projections.

2. Equity capital must be secured at a reasonable valuation.

3. Continue to provide quality services at competitive prices.

4. Expand level of services into new regions.

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5. Provide turnkey solutions and services.

3. About OSP

Telecommunications OSP cabling began with the placement of the first telegraph system, which

consisted of wires linking two stations. From this simple beginning, OSP has expanded into a vast global

telecommunications infrastructure.

The majority of OSP facilities are designed, installed, and maintained by local access providers (APs)

serving specific geographic areas. However, OSP facilities located on private properties or in areas not

covered by a local AP become the customer’s responsibility. To support the needs of the local APs,

many private companies offer OSP design, engineering, and construction services.

In some countries, the AP (the provider of the physical connection) is also the service provider (SP [the

provider of the desired service]) and can be the same company. BICSI defines OSP as the

telecommunications infrastructure that is designed and installed externally to buildings and typically

routed into an entrance facility (EF).

OSP may include:

• Optical fiber cabling.

• Balanced twisted-pair cabling.

• Coaxial cabling.

• Supporting structures required to link serving facilities to outlying locations and enable voice,

data, video, and other low-voltage systems.

3.1 OSP Standards

OSP networks may differ because of:

• Topography.

• Climate.

• Choice of cabling.

• Economics.

• Local code requirements.

• Network functionality.

• Current and future types of supported equipment.

• Customer requirements.

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The specifics of telecommunications infrastructure may be unique; however, overall OSP network

components and the methods used to complete and maintain installations are relatively standard.

Standardizing cabling installations is necessary to ensure successful performance of increasingly

complex arrangements.

3.2 Standards are beneficial because they:

• Promote design and installation consistency.

• Impose conformance to physical and transmission line requirements.

• Provide a structured telecommunications facility that enables efficient system expansion and

other changes.

• Provide for uniform documentation.

3.3 Codes, Standards, and Methodology, continued

While codes address minimum safety requirements, standards are intended to ensure system

performance by providing installation requirements and guidelines. In general, standards are

established as a basis to compare, measure, or judge:

• Capacity.

• Quantity.

• Content.

• Extent.

• Value.

• Quality.

The use of the terms shall and should in standards affects the way the stated tasks are accomplished.

These terms are defined as:

• Shall—A mandatory requirement.

• Should—A recommendation.

Independent organizations specialize in establishing, certifying, and maintaining these codes and

standards. Methodology is the implementation of practices and procedures employed within a

particular industry. Installation manuals are examples of methodology

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3.4 About FTTP

FTTP stands for Fiber to the Premises which is one type of fiber optic communication delivery in which a

optical fiber connection is directly run to the customers' premises. The P (premises) can be business,

commercial, institutional and other applications where fiber network connections are distributed to a

campus, set of structures, or high density building with a centrally located network operations center.

Some other FTTx such as FTTN (fiber to the node), FTTC (fiber to the curb) still depend on copper wires

for "last mile" (final connection) to the customers' premises which contrasts with FTTP. FTTP can be

further categorized into FTTH (fiber to the home), FTTB (fiber to the building), etc.

FTTB: Fiber To The Building. This is in reference to fiber optic cable, carrying network data,

connected all the way from an Internet service provider to a customer's physical building.

FTTD: Fiber To The Desk.. FTTD indicates applications where fiber optic connections are

distributed from the central office to individual work stations or computers inside a structure,

dwelling, or building.

FTTH: Fiber To The Home. FTTH indicates fiber network connections running from the central

office to a residence, or very small multi-unit dwelling.

FTTN: Fiber to the node. FTTN is also called fiber to the neighborhood or fiber to the cabinet

(FTTCab). It is a telecommunication architecture based on fiber-optic cables run to a cabinet

serving a neighborhood.

FTTC: Fiber To The Curb. This is also called fiber to the kerb (FTTK). It is a telecommunications

system based on fiber-optic cables run to a platform that serves several customers. Each of

these customers has a connection to this platform via coaxial cable or twisted pair.

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4. The Market: Growth and Opportunities

The rise of Saudi Arabian telecoms: Unrivalled promise and opportunity in a vibrant market. The story

of Saudi Arabia’s phenomenal telecom growth began in 2005 with the liberalization of the sector. The

opening of the telecom market helped the economy at large, by not only acting as a key enabler of the

economic growth but also attracting relevant foreign investment. The overall impact has been

outstanding both from a customer and business perspective – an ever increasing customer base has

enjoyed a wide array of innovative products and services, while at the same time telecom players have

posted solid financial results benefiting their large Saudi Arabian shareholder base as well.

This white paper provides the Delta Partners perspective about the underlying forces and opportunities

that are shaping the next wave of growth in the Saudi Arabian telecom market, and how relevant

stakeholders (such as companies, government, regulatory bodies, etc.) can act as enablers and benefit

from the opportunities.

Saudi Arabia is the largest telecom market in the GCC sized at USD 11.6 bln in 2010, with the growth in

telecom revenues expected to be about USD 1 bln from 2009 to 2010. Saudi Arabia alone will grow, in

absolute terms, more than the rest of the GCC telecom markets put together.

Six key promise pillars are shaping the next wave of growth opportunities

In the driver’s seat: A youth-centric and expatriate consumer generation bolstering demand

The internet and broadband surge: Unleashing the growth

The smart device: An integral lifestyle choice

Beyond the basic: Innovation in telecom applications and services

Mobile financial services: Banking at your fingertips

The connected corporation: Need for sophisticated ICT services

Each of the promise pillars has strong implications for the industry stakeholders and they need to act now to seize the relevant opportunities that lie within this market

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Saudi Arabia’s population, with around 27 mln people, is the largest in the GCC. The youth and

expatriate segments are an influential part of the consumer dynamics, representing a large portion of

this base. The youth segment (15-24 years) stands at around 5 mln of the total population, and the

expatriate segment is estimated at around 8 mln people (refer Exhibit 2); both segments are by far the

largest in size in the GCC.

These segments are crucial drivers for telecom products and services. The youth segment is tech-savvy,

adopts new products and services, possesses significant purchasing power and could represent high

customer lifetime value for telecom players. The expatriate segment will continue to be an important

contributor to the economic growth in Saudi Arabia in the coming years and, as such, possesses relevant

disposable income to spend. Telecom products and services that enable contact with families and

friends abroad form a large part of the expatriate segment’s demand and represent a significant share

of revenue for telecom players.

4.1 Conclusion

The Saudi Arabian telecom market due to its vast size and potential is on the radar of most industry

stakeholders. In the coming period, the focus needs to be on the creation of an ecosystem that brings

together, in a mutually beneficial way, telecom operators, device players, hardware/equipment

vendors, software solution providers and content players. The real winners in the Saudi Arabian telecom

market will be those who can smartly capitalize on the promise pillars and continuously adapt their

chosen strategies to relevant changes in the economic environment, industry context and competitive

dynamics. The government can play a vital role in ensuring the creation of Saudi Arabia as a hub for

telecom industry innovation and development, both as a mechanism for diversifying the economy and

boosting economic growth.

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5. Start-up Cost Summary of Project-01

Start-up costs, shown below are comprised mostly of initial investment, equipment, material, manpower, marketing and consulting fees. Start-up costs are being financed by the new joint venture. With new joint venture I am seeking for 900,000 in funding in order to implement plan for a telecom business in Saudi Arabia.

5.1 Financial Details of CSS Project-01

Summary of Cost

# Description Amount

1 Office Manpower Cost 10,000

2 Skilled & Non Skilled Manpower Cost 32,500

3 Transportation Cost 4,500

4 Equipment & Tools Cost 160,000

5 Material Cost 83,000

6 Fuel & Maintenance Cost 4,000

7 Food & Other Cost on Site 6,000

Total Cost 300,000

Operational Cost in 1 Month

Operational Cost in 1 Month 300,000

Cost with Risk Management

15 Days Contingency Period or Hidden Expenses 25% 75,000

Total Operational Cost in 1 Month 375,000

Offered Price

Offered Price 88 per meter (88*6000) 528,000

Our Operational Cos Per Meter

Our Cost Per Meter 50

Our Cost Operational + Risk


Our Profit on Operational Cost

Total Profit in 1 Week on Original Cost 228,000

Our Profit on Risk + Operational

Total Profit in 1 Week on Original Cost 153,000

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Initial Cost for Office, Labor Camp Warehouse & Tools

# Task Name Unit

Unit Qty Total

Price

1 Office

1.1 Office on Rent 1.1.1 A Commercial office on rent Months 2,500 6 15,000

1.1.2 Office Cleaning & Misc Nos. 500 1 500

1.2 Furniture & Others

1.2.1 Big Office Table Nos. 1,200 1 1,200

1.2.2 Medium Office Table Nos. 800 2 1,600

1.2.3 Revolving Chairs Nos. 400 3 1,200

1.2.4 Visitors Chair Nos. 300 6 1,800

1.2.5 Center Table Nos. 300 1 300

1.2.6 Visitors Sofa Set Black Nos. 1,200 1 1,200

1.2.7 File Cabinet Nos. 500 2 1,000

1.2.8 Center Table Carpets etc. Nos. 400 1 400

1.2.9 Miscellaneous Items Nos. 1,000 1 1,000

1.3 Kitchen Accessories

1.3.1 Fridge Nos. 500 1 500

1.3.2 Stove Nos. 200 1 200

1.3.3 Tea Set Nos. 100 1 100

1.3.4 Glass Jug Nos. 50 1 50

1.3.5 Kitchen Grocery Nos. 100 1 100

1.3.6 Cleaning Items Nos. 50 1 50

1.3.7 Miscellaneous Items Nos. 100 1 100

1.4 Electronics Items & Equipment

1.4.1 2 Telephone Lines Nos. 1,000 2 2,000

1.4.2 Telephone Sets Nos. 100 4 400

1.4.3 Fax Machine Nos. 400 1 400

1.4.4 Desktop Computers Nos. 2,000 1 2,000

1.4.5 Printer Desktop A3 Nos. 750 1 750

1.4.6 DSL & Networking Nos. 500 1 500

1.4.7 Air Conditioners Nos. 700 2 1,400

1.4.8 Electric Fittings Nos. 500 1 500

1.4.9 Office Accessories & Stationary Nos. 500 1 500

1.4.10 Miscellaneous Items Nos. 500 1 500

Total 35,250 2 Labor Camp & Store Cost

2.2 Rent a small compound with At least 3 Rooms

Month 2,500 6 15,000

2.3 Air Conditioners Nos. 700 3 2,100

2.4 Electrical Fittings Nos. 500 1 500

2.5 Kitchen Items Nos. 200 1 200

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2.6 Fridge Nos. 500 1 500

2.7 Water Dispenser Nos. 300 1 300

2.8 Cleaning Items Nos. 50 1 100

2.9 Beds for Labor Nos. 100 12 1,200

2.10 Bed Accessories for Labor Nos. 100 12 1,200

1.11 Miscellaneous Items Nos. 1,000 1 1,000

Sub Total 22,100

3 Tools Cost

3.1 Generator Nos. 3,000 1 3,000

3.2 Hand Shovel Nos. 30 20 600

3.3 Gantry Nos. 30 20 600

3.4 Level Scale Nos. 50 5 250

3.5 Tools Box Nos. 100 2 200

3.6 Miscellaneous Items Nos. 500 1 500

Sub Total 5,150

3 Safety Items Cost

3.1 Safety Helmets Nos. 10 20 200

3.2 Safety Jackets Nos. 20 20 400

3.3 Safety Warning Tape Nos. 65 10 650

3.4 Safety Tape Nos. 65 10 650

3.5 Safety Cone/Rod Nos. 50 50 2,500

3.6 Safety Steel Rod Nos. 50 50 2,500

3.7 Safety Steel Plates Nos. 10 1000 10,000

3.8 Safety Warning Boards Nos. 10 100 1,000

3.9 Safety Blocks Nos. 50 20 1,000

3.10. Emergency Light Nos. 200 2 400

3.11 Fire Extinguisher Nos. 1,000 2 2,000


Sub Total 22,300

Total Initial Investment

84,800

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Operational Cost for 6,000 Meter in 1 Month

# Task Name Unit Unit

Qty Total Price

1 Office Manpower Cost

1.2 Supervisor Month 4,000 2 8,000

1.5 Labor Camp Watchman Month 2,000 1 2,000

Sub Total 10,000

2 Skilled & Non Skilled Manpower Cost

2.1 Trenching Machine Operator Month 2,500 1 2,500

2.2 JCB (Bachoe Machine) Operator Month 2,500 1 2,500

2.3 Bobcat (Skid Loader Machine) Operator Month 2,500 1 2,500

2.4 Dyna Dumper Truck Driver Month 2,500 1 2,500

2.5 Electrician + Mechanic (Foreman) Month 2,500 1 2,500

2.6 Labor 10*1800=18,000 Month 18,000 1 18,000

2.7 Miscellaneous Month 2,000 1 2,000

Sub Total 32,500

3 Transportation Cost

3.2 Twin CAB for Supervisor & Labor Month 4,500 1 4,500

Sub Total 4,500

4 Equipment Cost

4.1 Trenching Machine Month 18,000 1 18,000

4.2 JCB (Bachoe Machine) Month 12,000 1 12,000

4.3 Bobcat (Skid Loader Machine) Month 8,000 1 8,000

4.4 Dyna Dumper Truck Month 7,000 1 7,000

4.5 Loader for Material & Equipment Week 5,000 1 5,000

4.6 Milling and Paving (Sub Contract) LM 6,000 18 108,000

4.7 Miscellaneous Items Month 2,000 1 2,000

Sub Total 160,000

5 Material Cost

5.1 Concrete 20*65 CM Trench 1 Meter 0.576 CM Nos. 6,000 13 78,000

5.2 Miscellaneous Material Items Month 5,000 1 5,000

Sub Total 83,000

6 Fuel & Maintenance Cost

6.1 Fuel & Maintenance Cost Month 3,000 1 3,000


Sub Total 4,000

7 Food & Other Cost on Site

7.1 Food on Site for Labor Month 3,500 1 3,500

7.2 Water on Site Month 1,000 1 1,000

7.3 Communication Month 500 1 500

7.5 Medical Month 500 1 500

7.6 Entertainment for Client Visitors on Site Month 500 1 500

Sub Total 6,000

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Payment Schedule

# 6,000

LM Descriptio

n 1st

Month 2nd

Month 3rd

Month 4th

Month 5th

Month 6th

Month 7th

Month 8th

Month 9th

Month

1

1st 6,000

Meters

Expenses 300,000

Investment 375,000

Total Invoice

528,000

Profit 228,000

2

2nd 6,000

Meters

Expenses 300,000

Investment 375,000

Total Invoice

58,000

Profit 228,000

3

3rd 6,000

Meters

Expenses 300,000

Investment 375,000

Total Invoice

58,000

Profit 228,000

4

4th 6,000

Meters

Expenses 300,000

Investment 375,000

Total Invoice

58,000

Profit 228,000

5

5th 6,000

Meters

Expenses 300,000

Investment 375,000

Total Invoice

58,000

Profit 228,000

6

6th 6,000

Meters

Expenses 300,000

Investment 375,000

Total Invoice

58,000

Profit 228,000

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6. Start-up Cost Summary for Project 02

Start-up costs, shown below are comprised mostly of initial investment, equipment, material, manpower, marketing and consulting fees. Start-up costs are being financed by the new joint venture. With new joint venture I am seeking for 100,000 in funding in order to implement plan for a telecom business in Saudi Arabia.

6.1 Financial Details of BZY Project 02

Summary of Cost


1 Office Manpower Cost 10,000

2 Skilled & Non Skilled Manpower Cost 32,500

3 Transportation Cost 4,500

4 Equipment & Tools Cost 160,000

5 Material Cost 83,000

6 Fuel & Maintenance Cost 4,000

7 Food & Other Cost on Site 6,000

Total Cost 300,000

Operational Cost in 1 Month

Operational Cost in 1 Month 300,000

Cost with Risk Management

15 Days Contingency Period or Hidden Expenses 25% 75,000

Total Operational Cost in 1 Month 375,000

Offered Price

Offered Price 97 per meter (97*6000=582,000) 582,000

Our Operational Cos Per Meter


Our Cost Operational + Risk


Our Profit on Operational Cost

Total Profit in 1 Week on Original Cos 282,000

Our Profit on Risk + Operational

Total Profit in 1 Week on Original Cos 207,000

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Mode of Payment


1 Total Operational Cost 300,000

2 40% Advance 232,800

3 10% on Site Closing 58,200

4 50% on PAT after 4 Weeks 291,000

5 Total Invoice 582,000

Required Amount


1 Total Initial Cost 27,450

2 Total Operational Cost 300,000

3 40% Advance 232,800

4 Remaining Required Amount To Complete Work 67,200

Initial Cost for Office, Labor Camp Warehouse & Tools


Qty Total Price

3 Tools Cost

3.1 Generator Nos. 3,000 1 3,000

3.2 Hand Shovel Nos. 30 20 600

3.3 Gantry Nos. 30 20 600

3.4 Level Scale Nos. 50 5 250

3.5 Tools Box Nos. 100 2 200

3.6 Miscellaneous Items Nos. 500 1 500

Sub

Total 5,150

3 Safety Items Cost

3.1 Safety Helmets Nos. 10 20 200

3.2 Safety Jackets Nos. 20 20 400

3.3 Safety Warning Tape Nos. 65 10 650

3.4 Safety Tape Nos. 65 10 650

3.5 Safety Cone/Rod Nos. 50 50 2,500

3.6 Safety Steel Rod Nos. 50 50 2,500

3.7 Safety Steel Plates Nos. 10 1000 10,000

3.8 Safety Warning Boards Nos. 10 100 1,000

3.9 Safety Blocks Nos. 50 20 1,000

3.10. Emergency Light Nos. 200 2 400

3.11 Fire Extinguisher Nos. 1,000 2 2,000


Sub

Total 22,300

Total Initial Investment 27,450

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Operational Cost for 6,000 Meter in 1 Month


Qty Total Price

1 Office Manpower Cost

1.2 Supervisor Month 5,000 2 10,000

Sub

Total 10,000

2 Skilled & Non Skilled Manpower Cost

2.1 Trenching Machine Operator Month 2,500 1 2,500

2.2 JCB (Bachoe Machine) Operator Month 2,500 1 2,500

2.3 Bobcat (Skid Loader Machine) Operator Month 2,500 1 2,500

2.4 Dyna Dumper Truck Driver Month 2,500 1 2,500

2.5 Electrician + Mechanic (Foreman) Month 2,500 1 2,500

2.6 Labor 10 Month 18,000 1 18,000

2.7 Miscellaneous Month 2,000 1 2,000

Sub Total 32,500

3 Transportation Cost

3.2 Twin CAB for Supervisor & Labor Month 4,500 1 4,500

Sub Total 4,500

4 Equipment Cost

4.1 Trenching Machine Month 18,000 1 18,000

4.2 JCB (Bachoe Machine) Month 12,000 1 12,000

4.3 Bobcat (Skid Loader Machine) Month 8,000 1 8,000

4.4 Dyna Dumper Truck Month 7,000 1 7,000

4.5 Loader for Material & Equipment Month 5,000 1 5,000

4.6 Milling and Paving (Sub Contract) LM 6,000 18 108,000


Sub Total 160,000

5 Material Cost

5.1 Concrete 20 * 65 CM Nos. 6,000 13 78,000

5.2 Miscellaneous Material Items Nos. 5,000 1 5,000

Sub Total 83,000

6 Fuel & Maintenance Cost

6.1 Fuel & Maintenance Cost Month 3,000 1 3,000


Sub Total 4,000

7 Food & Cost on Site

7.1 Food on Site for Labor Month 3,500 1 3,500

7.2 Water on Site Month 1,000 1 1,000

7.3 Communication Month 500 1 500

7.4 Medical Month 500 1 500

7.6 Entertainment for Client Visitors on Site Month 500 1 500

Sub Total 6,000

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Payment Schedule

# 6,000 LM Description 1st

Month 2nd

Month 3rd

Month 4th

Month 5th

Month 6th

Month 7th

Month 8th

Month

1 6,000 Meters

Expenses 300,000

Investment 67,200

40% Advance 232,800

10% Payment 58,200

50% Payment 291,000

Total Invoice 582,000

Profit 282,000

2 6,000 Meters

Expenses 300,000

Investment 67,200

40% Advance 232,800

10% Payment 58,200

50% Payment 291,000


Profit 282,000

3 6,000 Meters

Expenses 300,000

Investment 67,200

40% Advance 232,800

10% Payment 58,200

50% Payment 291,000


Profit 282,000

4 6,000 Meters

Expenses 300,000

Investment 67,200

40% Advance 232,800

10% Payment 58,200

50% Payment 291,000

Profit 282,000

5 6,000 Meters

Expenses 300,000

Investment 67,200

40% Advance 232,800

10% Payment 58,200

50% Payment 291,000

Profit 282,000

5 6,000 Meters

Expenses 300,000

Investment 67,200

40% Advance 232,800

10% Payment 58,200

50% Payment 291,000

Profit 282,000

5 6,000 Meters

Expenses 300,000

Investment 67,200

40% Advance 232,800

10% Payment 58,200

50% Payment 291,000

Profit 282,000

fiber optics project in jeddah-ver 01

Documents

aggressive

transportation

optic cables

skid loader

maintenance

total operational

telecom players

promise pillars