REQUEST FOR PROPOSAL
Competitive and Market Intelligence Research Services
Broadband Infraco
for
1. Corporate Background
Broadband Infraco is a newly licensed wholesale telecommunications operator in South
Africa which is owned by the Government of South Africa and the Industrial Development
Corporation. It is specifically focused on providing wholesale long distance connectivity to
licensed fixed and mobile network operators, internet service providers and other value
added network service providers, which they can either use for expanding the reach and
capacities of their own networks or resell on to their customers. It also enables other telco
operators to save costs and to achieve better long distance redundancy.
Broadband Infraco is now licensed to be South Africa’s alternative long distance carrier
offering the South African wholesale market the following benefits:
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National and International telecommunications transmission capacity
High-speed bandwidth at lower cost
Consistent, high quality
A national fibre backbone that links all major cities in the country
A high capacity network that is scalable and offers high availability
Research and Advisory/Consulting services are an important input for Broadband Infraco to
understand the potential drivers, barriers, and growth potential for wholesale services in
South Africa, with focus on:
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Precedents from other countries, including Europe and North America;
The impact of regulation;
The impact of activities in related sectors, such as fixed line and enterprise / business
demand.
2. Market Research Rationale
Market research is important for every business, and should not be just a one-off activity.
Successful businesses conduct research on a continual basis to keep up with market trends
and to maintain a competitive edge. Regardless of whether one is starting or expanding the
business, market research is vital to understanding the target market and increasing sales.
Some of these reasons include:
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Identify potential customers
Who is going to use Broadband Infraco’s product/services? What’s the size of the
company?
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Understanding existing customers
Why do customers choose Broadband Infraco’s product over competitors? What do
they value? Is it service, product quality or the prestige associated with consuming
our product/service? Who influences their buying decision? What media/magazines
do they read? What websites do they visit? What do they enjoy doing?
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Set realistic targets
From the information collected, Broadband Infraco will be able to set realistic targets
for areas such as growth, sales and the introduction of new products/services.
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Develop effective strategies
From the research we’ll be able to make informed marketing decisions about how to
price our product/service, how to distribute our product/service, which media
channels to use (eg: newspaper, radio, Television, on-line, or direct marketing) or
whether to develop a new product/service. It will also help make an informed decision
about starting, building, consolidating, diversifying or reducing business activity.
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Examine and solve business problems
If Broadband Infraco has identified a business problem, research will help it work out
what is happening. For example, if sales have fallen one might discover that brand
awareness has also fallen, or that a new competitor has entered the market or a
substitute product has become available.
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Prepare for business expansion
Research will help Broadband Infraco identify areas for expansion and test the
market’s readiness for a new product/service. For example it could be looking to
open a new regional support team and need to find the right location or could plan to
make changes to the distribution channels and need to determine how that will affect
the customer base.
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Identify business opportunities.
Research could identify new business opportunities. Broadband Infraco may find an
un-serviced or under-serviced market. Broadband Infraco could identify changing
market trends such as population shifts, increasing levels of education or leisure time
which bring new opportunities.
Suitably qualified service providers up to the challenge as outlined above are herewith
requested to respond to this RFP via the requisite Commercial Departmental criteria and
channel.
3. Scope of Research
3.1 Broadband Wholesale Market dynamics
Broadband Infraco needs to determine the attractiveness of the wholesale Telco market and
to understand its evolving opportunities and threats as they relate to the strengths and
weaknesses of the organization.
The following dimensions should be outlined:
 Broadband Telecommunications Market Size in South Africa (ZAR)
 Total addressable market size
 Market growth rate
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Market trends
Demand Analysis
The research output could be either be for a qualitative or quantitative research or both:
A qualitative research - to get an indication from the market if the Broadband Infraco
products/services are seen as addressing the needs in the market and that there is
likelihood to purchase or acquire such services, or the contrary.
A quantitative research, on the other hand to assist Broadband Infraco to determine the
demand for its products or services, where demand is defined as the number of
users/subscribers that will purchase/acquire these products/services within a certain time
frame at a specific price from Broadband Infraco
3.2 Market Segments
Broadband Infraco needs to understand the different requirements from their different market
segments which Broadband Infraco have identified as follows (not necessarily and
exhaustive list):
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Fixed Line Operators (i.e. Telkom, Neotel)
Mobile Operators (MTN, Vodacom, Cell-C)
Internet Service Providers (ISP’s) (Tier 1 and Tier 2)
Metro Ethernet Network service providers (emerging)
Value Added Network Operators (VANS)
Mobile Virtual Network Operators (MVNOs) i.e. Virgin Mobile
Data Centre and Disaster Recovery (DR) service providers
Submarine Cable Operators
Global Operators
Operators in Neighboring States (traffic to and from, Namibia, Zimbabwe, Swaziland,
Botswana, Lesotho)
Under Serviced Area Licensees (USALs)
Broadcasters? (TV or Radio)
Government (Provincial and National) / Municipalities
What do these market segments want or expect in respect of:
 Bandwidth?
o Scalability / Granularity?
o Bandwidth on Demand?
o What is the optimum bandwidth granularity to remain cost effective?
 Topology:
o Point-to-Point?
o Point-to-Multipoint?
o Multipoint-to-Multipoint?
 Class of Service (Best Effort, Real Time or Constant Bit Rate)?
 What is their latency tolerance / expectation?
 What are their Service Level / uptime expectations?
 On what percentage of their traffic / bandwidth do they want or need protection?
 Do they want managed or un-managed services?
o Proactive or re-active management?
 What interface and transport technology trends are emerging in the wide area links?
(TDM or Ethernet interfaces?) – show trends and timing applicable to the South
African wholesale market.
o If Ethernet then indicate the requirement trend for:
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 Fast Ethernet
 Gigabit Ethernet
 10G Ethernet
 40G Ethernet
Is there a market for Storage Area Network (SAN) certified long haul links (60km or
greater)?
Do they expect or require co-location in Broadband Infraco points of presence?
What is the relationship in the wholesale market between price sensitivity and quality
of service?
What are the upcoming trends? What are the upcoming applications? How does
Broadbrand Infraco prepare for these upcoming trends?
How does Broadband Infraco differentiate itself from other wholesale service
providers? Does Broadband Infraco differentiate itself by being price sensitive or
quality sensitive?
Research needs to also focus on where the traffic is? In which cities specifically on
which routes?
What are the overall international traffic volumes and growth rates?
Preferences with respect to bundling of services (e.g. national with international links,
WACS with other undersea cables e.g. for connecting JHB to NEW YORK)
Other value added services that carriers would like to buy from a long distance
carrier to carrier operator (national and international)
3.3 Time Line:
To be effective for Broadband Infraco research data needs to be supplied in accordance with
Broadband Infraco’s business and planning cycle.
Broadband Infraco’s financial year is from 1 April to 31 March.
In order for Broadband Infraco to produce and approve its Corporate Plan and Network
Development master plan and capital program for the next financial year, the research data
and demand forecasts for the new year should be available by the end of September the
previous year (i.e. 6 months in advance) but no later than end December. i.e. to effectively
plan for 2011/2012 Broadband Infraco will need forecasts, projections and research by 30
September 2010 with quarterly updates thereafter
Drivers:
Bandwidth Drivers and their impact on long-haul bandwidth needs? (Video, Voice, Internet
etc.) What is the impact of local internet caching on international bandwidth demand?
Technology drivers:
 Are there any disruptive technologies out there that can give Broadband Infraco a
competitive edge: , i.e. Photonic Integrated Circuits (Infinera) Vs. Photonic Cross
connects / WSS?
 When should investment in TDM (SDH) taper off and investment in IP and Ethernet
increase?
3.4 Analysis of the Broadband Infraco Brand in the Wholesale Telecommunications
context
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Gauge the current levels of general awareness of the Broadband Infraco brand as a
corporate, including but not limited to assessing brand equity; brand recognition;
image; strength and any other general characteristics.
Advises Broadband Infraco with planning for uncertainty and put in place plans for
achieving Business Process excellence.
Help to identifying the opportunities in order to grow demand for Wholesale
broadband services where convergence of services is essential.
Help to identify Utility models for Telecoms in the ongoing carrier transformation
movement and how this will affect South Africa and our business objectives.
Help to conduct current and future trends analysis to drive network operations,
including the new approaches to network architecture.
Provide with Business cases for knowledge management systems to support
knowledge management programs.
Provide information with regard to the strategic alliance in the form of partnership
based on Technologies and Market alliances.
Barriers to entry, competitive landscape and supplier concentration.
Establish and develop a plan for Broadband Infraco ability to match its business
operations to the ICT industry, product and customer lifecycle and allocate resources
accordingly.
3.5 Customer demand for Broadband Infraco’s products & services
Introduction
Marketing is not as intuitive as it is made out to be. A fair degree of scientific rigor has to
precede any market entry campaign, Broadband Infraco has not undertaken any such
specific research to date. There are some elements that require analysis and study before
launching into a fully-fledged marketing/sales campaigns such as underscored by the
diagram beneath (credit to Joson Drohn, Marketing Strategist)
Here is the breakdown of what the diagram shows :
Before reaching out to the customers a business needs to study four elements related to the
potential customers :
 How loyal are they to an exisiting brand?
 Analyze the target market’s behaviour ( consumer behaviour ).
 Study the cultural difference of each market being targeted
 Analyze what the problems are that the product/service might provide solution to
After studying these four elements the marketing department needs to:
create a marketing strategy based on the findings derived from each element
develop competitive advantage to move customers from an existing brand to own
brand and demonstrate how to cater to their existing & future requirements.
send out marketing messages based on cultural and psychographic nuances
observed in the research process.
Convey how Broadband Infraco’s products & services portfolio can provide solutions
to their existing problems.
If Broadband Infraco follows this approach the result mostly ends in purchase of a product/
service which is the solution for the customer. Scientific demand quantification preceded
market entry. And for businesses it results in making the right decision for their corporate,
which is their solution to the problem. In the end it’s a win-win situation for both customers
and businesses.
Specific areas for probing demand include but is not limited to:
 Provides target market insights; quantitative size of potential market and demandgeneration activity
 Research to assist in the development of a relevant, appropriate and accurate sales
and marketing strategic plans and endeavors of Broadband Infraco
 Conduct a research on the demand for Broadband products and services provided
with broadband and existing broadband awareness levels.
 Survey if the Wholesale customers understand the reason and the benefits to acquire
wholesale Broadband connection from Broadband.
 What is the demand for value added services that fall within the broadband services
and to maximize the customer utilization of Broadband Infraco services.
 Determine un-discovered benefits attached to the Broadband services currently
available.
 Develop Broadband Infraco ability to extract maximum value from the Business
Strategy (Mission and objectives) by matching services mandate and Network by
defining customer pain point in line with demand.
3.6 Pricing of Layer 2 Services for Broadband
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Provides pricing market insights; quantitative prices of the following product
roadmap of metro and long distance services to be provided by Broadband Infraco :
Product Feature
Phase One (Q1 2010)
Transmission
(TDM)
STM-1 (155Mbits/s)
STM-4 (622Mbits/s)
STM-16 (2.5Gbits/s)
STM-64 (10Gbits/s)
Transmission
(IP/Ethernet)
Interfaces (TDM)
Phase Two (Q2 2010)
100Mbits/s
1Gbits/s
10Gbits/s
40Gbit/s
SDH / DWDM
Interfaces (IP)
SDH / DWDM
Ethernet
Ethernet
IPVPN
Protection
Protected
Unprotected
Protected
Unprotected
Self-healing capabilities
COS/Bandwidth
Dedicated
Dedicated
Best Effort
SLA Options
98.5%
Reactive (excl last mile)
99.99% carrier class
Proactive (excl last mile)
Reactive (last mile)
Connection Options
Point to Point
Point to Multipoint
Multipoint to Multipoint
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Provide research to assist in the pricing strategy, marketing and launch of services to
market.
What is the impact of Broadband Infraco coming into the wholesale market on the
consumer (retail) price of broadband internet and the quality of service experienced
by the end consumer?
3.7 Generic Research and Market Intelligence capability
The suitable service provider should also have the capacity to deliver on the following
generic marketing research/intelligence capabilities as either part of the main research
outputs or as stand-alone turnkey projects as per client preference:
3.7.1
Competitive Analysis
The goal of this analysis is to assist Broadband Infraco to assess the strengths and
weaknesses of current and potential competitors.
The following information should be included:
 Determine who our competitors are.
 Determine our competitors market share.
 Determine the type of products and value added services that our competitors offer.
 Create a detailed profile of competitors
 Any other value-adding profile information on all Broadband Infraco’s competitive
landscape.
With the retail customers (Neotel, MTN, Vodacom etc.) self providing long distance terrestrial
optic fibers along key routes is there a danger bandwidth saturation in South Africa? If so
what is this saturation point and when is it likely to occur?
What is the risk and probability of Dark Fibre Africa (DFA) competing in the long distance
market?
What co-optition opportunities present themselves without contravening any anti-competitive
regulations?
What are Broadband Infraco’s chances of garnering sufficient market share as a pure long
distance (pop to pop) service provider versus and end-to-end (access-core-access) long
distance service provider?
3.7.2
Subscription services
To provide information on subscription basis that Broadband Infraco can subscribe to access
for the duration of the subscription. The information should be based on Telecoms’ services
in the wholesale market and be accessible via a shared drive or some other electronic portal
as well as hard copy report format.
3.7.3
Strategy Advisory services
To assist Broadband Infraco with any strategic research query that might arise during the
course of its preparations to enter the market place and or during the normal course of its
business.
Given Broadband Infraco’s mandate - what should Broadband Infraco do (if anything) to
climb the Electronic Communications Service Provider ‘value chain’, and when? Can
Broadband Infraco survive as a long distance ‘pipe’ provider and still be sustainable in the
long term or does Broadband Infraco need to offer more and more value added services? If
so what is the projected timing on this?
3.7.4
Perform Ad hoc Turnkey Services
To provide flexible, personalized and responsive telecom market research as and when
required by Broadband Infraco.
4. Technical Requirements
4.1 Qualitative and quantitative research to be done the broadband wholesale market to give
an to determine the demand and to also determine whether Broadband Infraco products and
services will address the needs of the market.
4.2 To be able to determine attractiveness of the wholesale market
4.3 To able to do market segmentation and determine the requirements from the different
market segments
4.4 To be able to determine market drivers, bandwidth drivers and technology drivers.
4.5 Provide research to assist in the pricing strategy, marketing and launch of services to
market.
4.6 Provide a detail profile of competitors. Assess the strengths and weaknesses of current
and potential competitors.
4.7 To provide information on subscription basis that Broadband Infraco can subscribe to
access for the duration of the subscription.
4.8 To be able to assist with strategic research.
5. Capabilities of service provider
5.1 To be able to provide strategic depth and understanding of the wholesale telecoms
industry.
5.2 To be able to advise client on the market entry strategy.
6.Technical Criteria
The technical proposal will be evaluated against the following criteria:
Activity
1.Knowledge
telecommunications
Points
of 5
Wholesale
Market and support presence in
South Africa
2. Demand Analysis
5
3. Market Forecasting
5
4.Competitive Analysis
5
5. Market & Technology trends
5
6.Pricing
5
7.Strategic research and advisory 5
services
8. Subscription Services
5
7. Pricing Proposal
Pricing details are requested for the total project scope:
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Research access price (yearly) (Competitive; qualitative and quantitative research.
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Advisory/consulting services price (by hours.
8. Expression of Interest
Only reputable ICT/Telecoms Research and Advisory companies who have been in
business for longer than 5 years qualify to respond.
Responses must include examples of similar projects undertaken in terms of scale and
content not longer than 2 years ago.
Research and Advisory/consulting Firms responding to the RFP will be required to to make
presentations on what their proposals and respective research/consulting portfolio of
services they offer to Broadband Infraco. Broadband Infraco will then select the
supplier/research firm to conduct the research according to the research requirements
mentioned above and in line with its Supply Chain Management Policies and Procedures.
9. Legal Disclaimer
All information provided in this document is given to a supplier for request for quotation
purposes only and does not constitute or result in any legal contract, order, commitment or
promise between Broadband Infraco and any person or entity and does not guarantee the
compliancy of the supplier to Broadband’s Supplier Requirements or acceptance of
supplier's quotation or internal processes or guidance of any kind. Any forecasts or volume
estimations given in this document do not bind Broadband Infraco, and are subject to
change at Broadband´s sole discretion. Broadband Infraco will have no liability for any
errors, discrepancies and non-conformities that may be in this request for quotation. No
warranty of any kind, either expressed or implied, is made in relation to the accuracy or
reliability of the content of this request for quotation. Broadband Infraco shall not be liable
for any direct or indirect ,incidental, special or consequential damages, lost profits or for
business interruption arising out of or in connection with this request for quotation.
Contact Person for this RFP:
Ms Betty Madigage
Product Developer
Broadband Infraco
[email protected]
+2711 235 1791