This is a quantitative market entry case requiring break-even and profitability analysis. The case tests whether candidates can structure a complex cost build-up (spectrum licenses, base stations, CPE) against revenue projections to reach a defensible recommendation. The analysis reveals unfavorable unit economics: $2.6B upfront costs against only $1.4B annual revenue, making the investment unattractive.
Our client, Telecom Co., provides satellite TV services (DBS) nationally. Telecom Co.’s customer base is being threatened by telcos and cable companies offering “triple play” (combo services). To combat this, Telecom Co. is considering deploying wireless network (WiMAX) to offer broadband internet.
Should the client go into the WiMAX business?