Proposal for the Setup of ISP (Abakaliki)

Proposal for the Setup and Administration of a Fully-Integrated Internet Service Provider (ISP) Prepared by Lighthause Communnications Ltd. Enugu.

Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Introduction This proposal is focussed mainly on the modalities involved in the setup of an ISP that will cater for the IT needs of consumers nationwide, or at least for the south, east and northeastern parts of Nigeria. Contrary to popular opinion, it does not require 10+ million dollars (1billion naira) to set up a full-scale and highly efficient ISP. Rather, the most difficult aspect of establishing an ISP is acquiring the requisite knowledge and experience, as well as securing qualified personnel to set up and administer the organisation. After a period of careful research and deductive selections, we have put together a complete and competent technical team to handle all the technical details involved in the actual setup and running of an ISP. What is missing from this team so far has been adequate financiers.

What is the Internet? The Internet is the world=s largest collection of computers ever tied together, and the most famous network in the world today. It has tens of thousands of computers connected to each other. These are computers owned by universities, businesses, nonprofit organisations, government bodies, and individual users.

Leased lines (which is later discussed \in detail), T1 satellite

transmission lines, Ethernet, wireless relay, remote access and even dial up connections over POTS (plain old telephone service) form the connections among these computers.

These

connections are provided by local operating companies (e.g. NITEL, Interpacket Networks, VGC Communications, etc.)

and all of the major long distance carriers. The hardware and the

accompanying connections form the physical body of the Internet.

What is an ISP? ISP is acronym for Internet Service Provider.

This is an organisation that provides services

for customers to enable them to connect to and/or access facilities on the Internet. may be anybody

Customers

C home users, companies, or large corporate bodies.

The Internet Service Providing company that sells computer access to the Internet, also called Internet service provider (ISP) or access provider. A user buys a subscription to a service provider, which gives the user an identifying username and password and a phone number.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

With his or her computer and modem, the user calls, connects to, and logs on to the service provider's computer. The user's computer then lets the service provider's computer take over, acting like a dumb terminal. The user can then utilize any of the tools the service provider's computer furnishes, which can give access to the World Wide Web (WWW), electronic mail (e-mail), File Transfer Protocol (FTP), Telnet, and other Internet services. Some service providers limit the amount of time a user can spend connected to the service provider's computer or charge more money for extra time.

Types of ISPs International These are ISPs that provide a connectivity backbone to users all over the world to hook up to the Internet. They are the final link to the information superhighway. As such, anyone who wants to get on-line must be linked through a major (international) ISP. There are not very many of them worldwide, such as CompuServe, America On-Line (AOL), Interpacket Networks, UU-Net, Global-1, and so on. AOL is a time-charging, and expensive ISP. It has only a few dial points in Nigeria, and was the first major ISP available in Nigeria, appearing in the late nineties. Most major international businesses and ISPs in Nigeria (as well as many private users) are linked to the world wide web through AOL. Compuserve, and other major ISPs, have no points of presence (POP) in Nigeria. Users have to make international calls to gain access through them to the Internet. Due to the high cost of linking up to the web through these international ISPs with no POP in Nigeria, nearly all of them offer satellite linking, which is a more reliable, stress-free and remarkably fast way to link up. However, there is a running argument about the cost effectiveness of satellite linking over a telephone hook up. But there is no gainsaying the fact that advantages of satellite linking over a telephone hook up far outweighs the cost.

National These are ISPs that serve the needs of local users directly. They form a link between the major ISPs and the end-users of the facilities of the global network. These have POP throughout Nigeria. Generally, they offer time-charging, data-charging or fixed rate or flat-rate pricing. They offer access to the web by linking up to the major ISPs.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Sub-ISPs These are small-scale providers that further increase the hierarchical structure of the link to the web. They tend to provide services for a clearly defined geographical area. The most common charging model is some variation on fixed or flat pricing with additions for data and time. These ISPs have to be quite creative with their pricing to compete with other. Big advantage is more personalised support and local area knowledge, which create user loyalty (outside of major cities which are well services by many small and larger ISPs and have special pricing).

Services to be Provided There are so many varied services that users would request. Due to this product mix and pricing, structures constantly undergo updates, revisions and total overhauls at many points. Some of these include:

Web Access: Access is whereby we as an ISP act as the gateway to Internet services for our customers. These customers either want direct access to the Internet individually or wish to tie a larger network of computers directly to the Internet full-time. This access does not have to entail any other single option other than a connection to our Internet server, but in many cases it will. Some of the considerations are discussed below. Dial-up Access Dial-up customers form a bulk of the Internet market. Dial-up customers will be using modems from speeds of 9600bps up to the latest standard of 57,600bps (bps is a measurement of the rate of data transmission. Anything slower than 9600bps is really too impractical for good graphical access and we will not sell to these customers but rather suggest a modem upgrade first. These customers will make up the majority of all our headaches as they will fill our Technical Support phone line(s) with endless calls. Dial-up users want speed! However, we are more than ready to satisfy this need, for our projected transmission

and access speed is 2.0Mbps i.e. about

2,097,152 bps (Mode of operation will be discussed in detail later on). Users will also want a POP e-mail account. This is a standard e-mail box that takes incoming mail for users and stores it on our local server until they are able to pick it up at their next call. Dial-up users will want us to provide them with Usenet access as well. Many of them will wish to have their own home page and whether or not we can charge for that depends really on our market conditions.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Potential customers will call us and will want to know the procedures for getting connected. We need a well-prepared and equipped HelpDesk to attend to their questions. As a potential customer, the most important issue, when choosing an ISP is to find one with a local phone number for you to dial. Otherwise, the phone tolls may cost more than the ISP itself. Most ISPs have several access numbers in their local area only. Quite a few have points-of-presence (POPs), as they are often called, in other major cities. To take advantage of this, there is the need to provide POPs in our target market areas (e.g. Port-Harcourt, Aba, Umuahia, Owerri, Makurdi, Benin, Jalingo, Calabar, Uyo, Lokoja, etc.). These POPs will be terminal servers connected to a digital data service (or linked through radio transmission), which connect to our ISPs main site in Abakaliki. This also ensures centralized accounting and user administration. The digital data service must be able to offer at least 640 links. Each POP will have at least 20 dial-up lines. However, establishing POPs in target areas will be the focus of Third Phase of our operation. MicMicrowave Link Companies use microwave links from an Internet service provider to provide Abulk@ Internet services to many of its in-house employees. A firm utilizing e-mail as a standard worldwide communications link to other offices might need to allow 20+ simultaneous users to access this service. For this high use purpose, dial-up access over a standard phone line is too cumbersome. A microwave link between the ISP and the company=s Local Area Networks, run into the company and integrated into their existing computer network, provides many users with the ability to simultaneously access all of the above Internet services. Web Site Hosting The AWeb@ is a worldwide distributed collection of documents (millions of them) that companies, individuals, educational institutions, and government bodies maintain. Web pages are made up of textual information, pictures, audio and even video files that a user accesses from their computer. Web Aspace@ costs very little compared to conventional advertising mediums. Institutions who create a Web presence generally provide massive amounts of information through them, far more than through other conventional means. Web pages are generally linked to e-mail services for interaction with potential customers and other interested parties. Web documents are not like conventional advertising either, in that a user must actively choose to Ago to@ the web pages that interested them. If I were looking for information on truck parts, I would

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

choose to Asearch@ the Web by using what basically amounts to an on-line yellow pages. No one group owns the Web. One benefit of web pages is that they can be accessed from anywhere in the world one or more destinations. E-mail Services E-mail is the most popular activity on the Internet. Electronic mail (e-mail) refers to an electronic message sent through a computer network from one source to one or more destinations within seconds or micro-seconds. E-mail allows company personnel to keep in touch with remote offices and business contacts without spending a fortune on long distance calls or travels. E-mail also provides an excellent distribution system as companies may distribute information about or a new product offering to all of its distributors at once. E-mail also allows for the Aattachment@ of documents to messages. In this way, a geographical presentation, or a spreadsheet can be distributed to many individuals instantaneously. This system is also capable of sending e-mail to fax system anywhere in the world. The e-mail should have a web-based interface for users on the Internet.

To send and receive mail on the Internet, you must have

an e-mail address. A typical e-mail address might be [email protected]

Visual Communications Communication

over

the

Internet

improves

with

each

passing

day.

Video-phone

and

tele-conferencing (which used to be featured only in science fiction) are now popular communications media, using the Internet. Such features however requires a fast Internet connection as well as a digital camcorder. For instance, organisations can hold conferences without all the participants being present in one location. With video-conferencing, participants can be anywhere and still participate actively and share in the proceedings. Internet Telephony International telephone calls can as well be made over the Internet connection for the same rate as a local call (e.g. within Abakaliki), without attracting any extra cost. This feature, as at present, is the most utilised feature of the Internet, seconded by e-mail. Internet Libraries

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

These are centres in selected higher institutions of learning, equipped with terminals where students can have access to the Internet. Each of these centres will also be connected to the ISP via radio links.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Why Establish in the East? The potential of establishing an ISP in Abakaliki to target the whole of Eastern Nigeria as well as the middle belt and some areas of the North, is mind boggling. Presently, there is only one ISP within the boundary of the highly commercial Eastern Nigeria, and due to unnecessary interference from certain sectors, it is not functioning fully and efficiently. The marketing of an ISP is incredibly negligible in comparison to the level of turnover achievable. The main outlay is the capital expenditure, which varies according to the ambition of the investor(s). It is clear from the news (and from on-the-ground experience) that the Internet has more profit potential than just about everything else combined. It is evident that the eastern part of Nigeria is fertile ground for the setup of an ISP organisation, as nearly all other ISPs in Nigeria are concentrated in and around Lagos. It has been established that subscribers, particularly east of the Niger, as well as in the Midwest and middle-belt areas of the country, groan over the high tariff their use of the internet service attract. This stems from the high cost of telephone charges in the country as well as the long distance (trunk) calls they have to pay to get on line to the Internet through Lagos B the base of all ISPs in the country. For instance, a telephone call from Abakaliki to Lagos cost about N =19 to N=21 a minute. That means that for a subscriber to be online for one full hour would attract a telephone bill of not less than N=1,200. This cost does not include the subscription fee payable to the ISP, which average (across different ISPs) from N=5 to N=15 a minute. So, for a nominal cyber geek, a one-hour web browsing venture would be attracting a penalty of about N =1,500 to N =2,000. When these subscribers learn that they pay much higher than their Lagos-based counterparts, obtaining access to the Internet becomes a luxury venture that many shy away from. Any wonder then that Nigerians are not as cyber-crazy as the rest of the world? With a service provider in Abakaliki, the end users= cost of using Internet facilities will be greatly reduced, further enticing them to subscribe to a local-based ISP. Moreover, people relate better to things they consider Atheirs,@ hence the eastern-based ISP will enjoy a near-total local patronage as well as break new grounds in the largely untapped surrounding zones. However, the ultimate goal is not only to establish a major, full-fledged ISP, but also a versatile communications firm. After setting up an efficient and full-scale ISP, infrastructure is automatically in place to extend the scope of the organisation=s services

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

into other fields of communication technology. Clients= demand for increased services will underline the need for network expansion as the corresponding income generated will justify such further investment.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Benefits of Being an ISP The Internet is the fastest growing business in the world. For entrepreneurs, this is an exciting opportunity. There is no gainsaying the fact that investing in the ISP business is profitable, if one can circumvent the initial high capital demands of this extremely viable industry. For prospective investors who have spent some time trying out various business ideas, searching for just the right one, starting an ISP is the chance to have the kind of desired success. Market research already carried out (spanning several local ISPs) revealed that they have achieved an average subscriber base of 20,000 or greater (per ISP) in just two years.

That's

=40,000,000 to N=80,000,000 per month income in just two years, about 80% of which can be profit N if the organisation is properly managed. Long established ISPs, such as Linkserve and Infoweb, are achieving four times the turnover level mentioned above. Abakaliki on it=s own will achieve at least 4,000 subscribers in nine months, at an average of N = 3,000 per month per subscriber, which gives a projected average monthly subscription turnover of

N=12,000,000 per month. A big organisation like UNICEF has expressed interest in

subscribing to a local ISP, as opposed to the current arrangement of going through Linkserve, Hyperia, or Infoweb (all) in Lagos. The towns of Abakaliki and Awka telephone exchanges are currently being digitised using the Abakaliki 043-exchange prefix. The implication is that Awka and Abakaliki, in addition to Nsukka, will connect to Abakaliki on local-call tariff instead of trunk-call tariff. The surrounding states (of Abia, Anambra, Imo, Ebonyi, Cross Rivers, Akwa Ibom, Rivers, Bayelsa, Delta, Edo, Benue, Kogi, Nasarawa, Bauchi, Plateau, Jigawa, Adamawa and Yobe) and their business cities (e.g. Aba, Umuahia, Awka, Port Harcourt, Onitsha, Owerri, Asaba, Warri, Makurdi, Lokoja, etc.) will provide additional subscribers in the second phase of our operation, greatly increasing our client base and expanding our scope of operation as well as our turnover. These days, Internet access is a necessity for many businesses. By starting an ISP we will be providing for this need in our country and, thus, we will quickly become a valued and respected business. An ISP is a service business. There is no need for extensive capital to purchase inventory, and when sales are made there is no need to re-invest 50% to 90% of the money received in more inventory. After paying bills (most of which are the same for any business), the balance money is declared as profit to keep and use as necessary.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

We can share our ideas, opinions, politics and creations with our subscribers and thousands of others on the Internet. Being an ISP, we have a somewhat captive (and growing) audience, since most Internet subscribers want to see the home pages of their provider on a regular basis. Another benefit is the ability to provide income and employment for our community. In heavily populated areas, such as Abakaliki and Eastern Nigeria, starting an ISP can have enormous potential. Abakaliki alone has a potential of not less than 7,000 subscribers in two years, at an average of N=40,000 annually, we are looking at income level of at least N =280,000,000 (280m Naira) per year. The outlying states are expected to contribute another 8,000 at least, bringing the total number of subscribers to 15,000. This translates to

=600 million revenue per year. N

Listening to the news lately, it is announced that the USA and many other countries are planning for the Internet to at least double in the next year or so. That money can stay here, improving our local economy, providing employment and income for all investors in this proposal to become an ISP.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Setup Requirements Connectivity A minimum of at least 64 to 100 and more telephone lines is required which will give us a potential simultaneous dial up connections of around 64 to 100. Since it is not practical to obtain such number of individual lines from NITEL, E1 connections will be used. E1 connection is the best available option as NITEL now provides E1 at the cost of N =500,000 per E1 line. E1 is a dedicated leased circuit comprising of 32 lines (lumped together). Hence to achieve our target, we shall need up to four E1s. NITEL policy insists on fibre optic cable to connect the E1 lines (after approval) to our site which could cost as much as N =2,000,000 per kilometre. This fact alone would determine the location of our site. Internet backbone connectivity will be by Satellite hook-up. An international (major) ISP will provide access to the Internet. On the other hand, we might use NITEL as backbone (which is highly unreliable).

Satellite Transmission This is the most reliable medium to link up the Internet. Worldwide there are about a dozen major Internet Service Providers (ISPs) who form the top structure of the Internet link-up hierarchy. As these ISPs cover the globe, they are often referred to as international ISPs (or major ISPs), or global ISPs. ISPs whose operational region is within a country are referred to as National ISPs (where we fall in). Then there are sub-ISPs that link to the web through National ISPs, who in turn enjoy access facilities from the major ISPs. Then the end-user (who might

be

home-users,

institutions,

small-scale

businesses,

firms

and

international

organisations, NGOs as well as governmental parastatals) who might want to link up to the web (depending on cost) using any of the afore-mentioned service providers. The major ISP can easily be linked using either an E1 line (which service is being

provided by NITEL) or Satellite

transmission. Connection with the ISP is established using an E1 link leased from the major ISP.

Dedicated Lines These are special lines from NITEL that can only be dialed by our subscribers. Generally, the idea is that these lines should not be Adisturbed.@ But in Nigeria, that is a risk we have to live with (the NITEL wahala). Definitely, there will come a time when we will receive request

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

for dedicated modem lines. These are useful for groups who desire a continuous connection to the net but do not have a need for a lot of bandwidth. This can be achieved through the POTS (plain old telephone system) lines or special dedicated lines commonly referred to as leased lines. However, this type of connection is fraught with a lot of problems. Apart from the difficulty of trying to make a trunk connection (as all ISPs presently are based in Lagos), the connection sporadically truncates, further frustrating the embattled user, who, in desperation abandons the entire idea of enjoying the investment made in the Internet facilities provided. Logging on is a herculean task as one frequently encounters the message Aall trunks are busy, please call later,@ or generally the continuous beeping sound, indicating that the lines are currently engaged, which may be true or not.

Wireless Relay This medium provides faster and more reliable wireless connection for clients who desire a continuous (and relatively cheap) connection to the net. Usually, when a user wants to connect their entire LAN to the net, there is need for a lot bandwidth. This can be achieved at moderate cost through the Radio Links or other wireless network. With the existence of wireless modems, faster Internet connectivity can also be provided to clients who are willing to pay some token to enjoy this modern facility. Usually the equipment is more expensive than the nominal land lines connection.

Local Area Network The central point of the ISP is the Local Area Network (LAN). Clients will dial in to the LAN, and after authentication, will subsequently be hooked-up to the Internet. So to achieve the desired objective, our LAN design should facilitate efficiency and speed. Again, a machine is just a machine and it will break down someday. When our ISP is in full swing, even waiting for an overnight shipment will seem like forever. We need to keep spares to reduce downtime. The focus of all our operations is the in-house base of all the expertise. We are going to do it all ourselves. This is cost effective, for it automatically removes the cost of hiring consultants or outside professionals to maintain our equipment or carry out some technical work for us. We also have considerable expertise in planning and designing Home pages for Internet sites. A well-designed home site is an investment in our ISP, not simply an expense.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

We need an attractive home page for our service that has plenty of features and links. It was surprising to discover that many Internet users will change subscribers due to the home page design. Strange, but true!

Marketing As with any business, we must put exceptional effort into marketing. Most new Internet subscribers will sign up with a familiar name, which is why AOL gets so many subscribers - it's not because their service is better. However, local findings show that the efficiency of the service being provided by any organisation makes the name of that organisation popular, as people prefer efficient (and personalised) services to bogus names and claims. Since we have so structured the organisation to run smoothly under the oversight of some of the best brains in the profession, attaining the level of efficient services that will get us noticed will not be a problem. Additionally, we have compiled a lot of practical marketing strategies that will definitely give us a fair share of the market, bearing in mind that as soon as we start attracting nationwide attention, other existing ISPs will want to come in and compete.

Publicity The importance of advertising cannot be overemphasised. One inexpensive method is to run a classified ad continuously in local newspapers. Run display advertising at the major road junctions starting at Abakaliki and expanding to all other capital cities in eastern Nigeria. For example, it is recommended that a full-page advert be run on AThe Guardian@ say every other Tuesday of the month. A significant advertising budget has been made to create awareness. Encouraging press coverage will be one sure way of achieving this. Radio advertising and sponsorship will also be just as successful in creating market awareness and ultimately attracting subscribers. Flyers and brochures are another means of attracting subscribers. Like the technical aspect, these would also be in-house to cut down cost. It is planned to distribute Flyers and Brochures with Sunday papers and magazines. This will be cost effective going by the results of investigation of distributors and vendors. Placement of our flyers at all major supermarkets and hotels will be accomplished with little or no incentive. Seminars and workshops will also be organised to further promote a good public image of the organisation, as well as increase our goodwill.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

The main point is to advertise like crazy. Seize every free advertising opportunity we can, and pay for as much as we can. Put ads in local and national papers as we can afford; make them as big as we can afford. Change the ads regularly, but keep some components the same (such as our logo). Radio is a tricky medium and rather expensive, but used in conjunction with plenty of print advertising will be somewhat effective in a market. Sponsoring or promoting radio and TV shows will be far more effective than an announcer reading over some music.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Access Rates for Clients The primary source of revenue for the ISP organisation is in tariffs. As the industry is highly competitive, charges should not be higher than what is obtainable in the market, neither should they be so low that the profit margin is compromised. Hence, a balanced rate of access fees is presented below, which happens to be the cheapest nationwide, as well as healthy to the projected profit margin. The local populace would generally not want to spend sizable amounts on Internet access alone, as the local level of cyber-awareness is quite low. This factor was taken into consideration, so that anyone can easily subscribe, given the low cost of Internet access. Additionally, these low rates would also be the major selling point of the ISP as many more people would readily subscribe, thereby increasing the profit margin.

Services

Monthly

Option 1 - 1 hr per day

N=3,000.00

=9,000.00 N

=18,000.00 N

=36,000.00 N

Option 2 - 2 hrs per day

N=5,400.00

=16,200.00 N

=32,400.00 N

=64,800.00 N

Option 3 - 3 hrs per day

N=6,750.00

=20,250.00 N

=40,500.00 N

=81,000.00 N

Others

Quarterly

Email only

Annually

Rates

Pay as you use (per minute) Microwave links (wireless)

Biannually

=10.00 N  N =120,000.00 =20,000.00 N

Web surfing per minute

=10.00 N

Payment of all subscriptions will be at designated banks perhaps including the following banks: Diamond Bank

Zenith International Bank

Standard Trust Bank

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Proposal for the Setup and Administration o f a fully-integrated ISP All States Trust Bank

Union Bank PLC

First Bank of Nigeria PLC We are targeting a minimum of 10,000 subscribers in the first 12 months.

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Lighthause Communications

Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Estimated Expenditure The project cost is estimated to cost not more than N=110 million. The actual estimated project cost is N =101.365 million. A summarised breakdown of the project budget is presented as follows:

Preliminary Expenses Description

Amount in Naira

CAC and NCC Licensing Expenses Office Space Rent

1,150,000 500,000

Furnishing the Premises

1,050,000

Telephone lines and Radio equipment

450,000

Transportation (1 bus, 1 car)

900,000

Air conditioning

200,000

Publicity

800,000

Administrative Expenses

1,000,000

Sub-Total

6,050,000

Preparations & Incidentals (10%) Total

605,000 =6,655,000 N

Notes !

CAC and NCC License Fees C Before anything else is done, the firm must be registered with the Corporate Affairs Commission (CAC), Abuja, as a Private Limited Liability Company. Any other licenses or permits we are going to apply for, we must tender our certificate of incorporation from the CAC. The actual ISP License Fee of N=550,000, which is for five years on successful application, is not payable until confirmation of license, which will take about two months. This could be provided for as when it is due for payment.

!

Office Space Rent C It is recommended that landed property be acquired for the organisation, as there will ultimately be a lot of restructuring and equipment installations that might

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

alter a rented or leased property. However, to cut initial take-off costs, a rented or leased property can suffice. !

Furnishing C This figure is tentative as it depends on the actual office space and siting.

!

Telephone Lines C Prior to the installation and connection of the proposed E1 lines from NITEL, the technical, administrative and marketing team will need telephone lines for their business. To minimize cost, at least two lines are being proposed. Walkie-talkies will also be procured for the field and technical crews to facilitate ease of communication, as well as reduce transit cost and wasted man-hours.

!

Transportation C At the inception of the project, two dedicated project vehicles is required, to facilitate the conveyance of personnel and equipment to and from the site, as well as to serve the marketing crew in their preliminary activities.

!

Air Conditioning C Every room/office on site needs to be airconditioned. The estimated figure is tentative, as it is ultimately dependent on the number of rooms/offices on site.

!

Preparations and Incidentals C This covers local licenses and official permits as well as travel expenses for the procurement of legal documents and ordering of equipment.

!

Publicity C The success of the whole project is largely dependent on publicity. One of the first activities to be carried out is massive advertising in targeted areas. This is preliminary, for after the project set up, extensive publicity campaigns will be vigorously pursued.

!

Administrative Expenses C This covers allowances for temporary (and preliminary permanent) staff who will be involved in the delivery, setup, configuration and procurement of materials, as well as cover the cost of organising interviews for prospective employees.

Project Expenditure

Details

Amount in Naira

NITEL Lines and Communication Equipment Local Area Network and Workstations Supplementary Power & Spares B NEPA, UPS, Generators

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4,800,000 18,250,000 4,200,000

Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Satellite Equipment

6,000,000

Radio Equipment (omni-directional antenna + equipment)

6,000,000

Internet Backbone Connectivity - First 12 months

30,000,000

Marketing and Publicity

4,500,000

Transportation

1,350,000

Administrative Expenses & Staff Training

11,000,000

Sub-Total

86,100,000

Incidentals (10% of Total)

8,610,000

Preliminary Expenses

6,655,000

Grand Total

=101,365,000 N

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Minimum Income Forecasts Details

Subscribers

Minimum Projected Income in Naira for the first 12 months

Option 1

1,000

36,000,000

Option 2

800

51,840,000

Option 3

500

40,500,000

Wireless

10

1,200,000

Pay As You Use (PAYU)

1,500

70,000,000

Internet Email Account

500

10,000,000

Web Surfing and E-mail

3,000

1,800,000

Internet telephony

1,000

4,000,000

Total

8,310

=215,340,000 N

To be on the safe side, this is the least revenue that can be achieved in the first twelve months of operation. With the marketing strategies and efficiency of services we have organised, we believe we can achieve more than double what is stated here.

This is a draft. A full report with Business Plan, Technical Plan and Network Plan will be made available after consultations.

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Proposal for the Setup and Administration o f a fully-integrated ISP

Lighthause Communications

Project Risks/Pitfalls As with any business venture, this project is fraught with risks and pitfalls. Success can be achieved if we recognise these pitfalls from the onset and work hard to repel or eliminate them. Some of them are based on trust relationships between the investors and the crew.

1.

2.

Risk/Pitfall

Proffered Solution

Potential excess cost by hiring

95% of activities and setup handled by

proclaimed experts or entering into a

in-house team of experts, consultants, and

turn-key agreement with a consultant

qualified employees at no extra charge

Stealing a docile or unresponsive

Optimism, massive publicity and persuasive

market C lack of eagerness on the part

advertising, as well as incentives

of consumers to subscribe to us 3.

External Interference C from

Legal contract with clearly defined terms and

investors and their friends and

conditions of service as well as relative

relatives, as well as from government

autonomy of organisation. Ensuring that all

and competitors

licenses, permits, receipts and legal documentation are acquired, as well as regular payment of governmental fees, rates and levies

4.

Fierce competition from NITEL, other

Being the first and the best will go a long

pre-existing ISPs who are interested

way in buying public opinion over to our side.

in the eastern market

Providing better, more efficient and highly reliable service is the best defence of all

5.

6.

Fluctuating market and revenue base C

Diversification, massive publicity, and

inability to meet up to estimated

playing on the public ego (details will be

target subscribers

supplied later)

Long-range capital realisation C

Inclusion of more investors as shareholders,

project setup takes too long

bank loans, project launching

22

Proposal for the Setup and Administration o f a fully-integrated ISP

Prepared by Lighthause Communications Ltd.

23

Lighthause Communications