Project

Project Proposal
Proposal
What does ISP stand for?
ISP stands for Internet Service Provider.

How many ISPs are operating in Bangladesh at present?

Approximately 70 ISPs are operating in Bangladesh at present.

What are the criteria with which one can differentiate the ISPs?
One can differentiate the ISPs in the following two ways:

I Target Market of ISP

A. ISP that provides services only to corporate clients

B. ISP that provides services to both individual clients and corporate

II Services of ISP

A. ISP that provides both Broadband and Dial up Services

B. ISP that provides only Broadband Internet
C. ISP that provides only Dial up Service
 What are the available sources of bandwidth for the ISPs in Bangladesh?
 Considering the present infrastructure of Bangladesh, Satellite remains the only source
of bandwidth in our country. ISPs do connect satellites of different overseas providers
through V-Sat technology.
 What are the different ways for clients to have Internet connectivity?
 End users of Internet in Bangladesh have the following ways to be connected:
A. Dial up connectivity through BTTB Phone Line
Dial up connectivity is the easiest and most popular way of Internet connectivity
throughout the world for home users. Corporate users having limited requirement have
also found this way very cost-effective. Dial up connectivity requires the user to have at
least one phone line. With this connectivity, the speed of Internet becomes limited by
the capacity of the copper wire.
B. Connectivity through Cable Modem
This technology has been introduced in Bangladesh in the very recent past. Although
this way carries shared bandwidth, it does not require a phone line to be connected with
Internet, like in Dial up connectivity.

 C. Wireless Internet Connectivity

This method is globally recognized as the most secured connectivity for Broadband
Internet. Unlike the ways previously discussed, this connectivity solution can ensure
dedicated bandwidth to the clients' end round the clock. This feature has made it well
accepted by the corporate users.
Existing
Existing market
market and
and demand
demand

 Cutting edge for this product/service

 No telephone line required
 As telephone line is scarce in our target
market
 As communication device telephone line is
essential so clients do not want to engage
telephone line for Internet
Advantages
Advantages and
and need
need for
for
Broadband
Broadband Internet
Internet through
through
Cable
Cable Modem
Modem
 24 hrs online
 About 270% less expensive than dial-up
account and this level of speed is not possible
with dial-up internet.
 Robust speed and easy for sending and
receiving bigger files which are necessary for
buying houses/MNC’s/corporate houses
 Low cost telephony around the world
Target
Target markets
markets
 Corporate houses
 Multi National Companies
 Embassies
 Buying Houses
 Universities
 International NGO’s
 Business Houses/Mega Shops
 Restaurants
 Individual Clients
First Network & Corporate
office
 For potential customers point of view we’d like to
start from
 Gulshan 1 & 2
 Banani
 Baridhara
 Mohakhali
 Baridhara DOHS
 Mohakhali DOHS
 Dhaka Cantonment
First Phase- Gulshan 1 & 2
First Phase(contd) Banani
First Phase(contd)-
Baridhara & DOHS Baridhara
Second Phase- Mohakhali &
Mohakhali DOHS
 Third Phase-
Dhanmondi
4th Phase- Uttara Model Town
Services from OptiMax
Communication Ltd (OCL)
 Broadband Internet through Cable Modem
 Dial-up Internet- Prepaid & post-paid
 Web Development/Total office
 Networking/LAN set up/Intranet
 Software development & consultancy
 Wireless Internet through radio link and wireless
VOIP
 Low cost telephony
 Call originating
 Call routing
Broadband through Cable
Modem
CABLE MODEM setup demo
VOIP Low-cost Telephone
Max IP10
The Max IP10 is an IP Phone that
enables corporate and home
broadband users to make and
receive low-cost VoIP and PSTN calls
from the same telephone.
2-Port Gateway
The Net2Phone 2-Port Gateway enables
two simultaneous users to place and
receive low-cost calls from regular phones
or a PBX system and features router
functionality.
Technology of Cable Modem
Broadband Internet
 Network—
 Fiber optic main line-
which has no data loss
 Trunk line of QR 540-
which has competitive
edge in less data loss
 Coaxial Cable to client
end
Best combination for both
Internet and Telephony
 Market Size
 Before launching this service with an ISP (which is now the market leader and
our major competitor) we had a survey which shown we had:-
 Corporate users--- 1,800
 Individual users--- 3,500
 Total :--- 5,300

Existing Operators for Broadband Internet:-

ISP Corporate Individual Total

Grameen CyberNet 430 660 1,090

Dominox 110 248 358

Total 540 908 1,448
Our Target Market & Marketing
Strategy
 Normal market has been increased by – 11%
 (GCL has targeted 1,000 customers in three years of operation although which
has been achieved by 16 months)
 When telephony will be given the market will be created by –25%
 So our fresh market remains of about 4,000 apart from existing operators
vulnerable customers of 1,448

Reason of shifting vulnerable customers:-

1. With same parent technology but with advanced option that existing
operators is adopting, so existing customers need no extra cost to shift their
choice.
2. Out target price is much lower than existing charged price.
3. Telephony is the main decision taking point for the customers.
4. The marketing and technical team they have dealt are now with us which gave
them confidence than a new company with new people.
 Comparison
Services
Type
Chart
Speed Grameen CyberNet Dominox ISP OptiMax
Ltd Communication Ltd
One time Monthly One time Monthly One time Monthly
installatio Charge installation Charge installatio Charge
n n

Internet Up to 18,000 1500/- 18,000 2,000/- 10,000 1200/-

Connectivity 16 kbps (modem15,0
through cable 00+ Cable
modem 3,000)
Individual 16-32 “ 3000/- “ × “ 2000/-
kbps

16-48 “ 4000/- “ × “ 3000/-

kbps

32 kbps 20,000 6,000/- 20,000 6,000/- 15,000 5,000/-

64 kbps “ 12,000/- “ 12,000/- “ 10,000/-

Corporate
128 “ 22,000/- “ × “ 20,000/-
kbps
256 “ 48,000/- “ × “ 40,000/-
kbps
Internet × × √
Telephony
Total Office × × √
Why OCL?
 Improved and better service as far as technology
and speed is concern
 Low cost telephony
 Less installation and monthly cost
 Integrated online monitoring system
 24/7 customer support
 Total solution under one roof
 Commitment to service by dedicated workforce
Number of Internet Clients
Year Number of Clients
1st Year 913
2nd Year 1,006
3rd Year 1,068
Total 1,919
Net Profit before Tax
Year Amount in Taka
1st Year (1,899,658)
2nd Year 6,454,208
3rd Year 10,820,235
Total (end of 3rd year) 15,374,785
Net Profit after Tax
Year Amount in Taka
1st Year -
2nd Year 1,821,820
3rd Year 6,492,141
Total (end of 3rd year) 8,313,916
Cost of the project Amount in Taka
Sl No Descriptions Per Unit Qty Total

1 VSAT 1,500,000 1 1,500,000

2 Back of VSAT equipments 1,000,000 1 1,000,000

3 Cable Modem Head-end 1,800,000 1 1,800,000

4 Backup Cable Modem Head-end 1,400,000 1 1,400,000

5 Network equipments and System Design 700,000

6 Rack Modem 11,000 60 660,000

7 Sun Server 240,000 1 240,000

8 Net cache 420,000 1 420,000

9 Proxy Server 60,000 1 60,000

10 Mail Server 60,000 1 60,000

11 Backup Server 50,000 2 100,000

12 DNS 50,000 1 50,000

13 Comscope Cables 2,905,000

14 Motorola & Gilbert equipments 3,630,000

15 UPS 40,000 4 160,000

16 Main UPS 250,000 1 250,000

Cost of the project (contd)
17 Generator 300,000 1 300,000

18 Peak up Van 350,000 1 350,000

19 Official Car 500,000 1 500,000

20 Telephone 20,000 60 1,200,000

21 Computer for Service 30,000 4 120,000

22 Computer for Accounts 30,000 2 60,000

23 Computer (common) 30,000 3 90,000

24 Printer 40,000 2 80,000

25 Licence for VSAT 210,000

26 Office Rent (advance) 300,000

27 Furnitures and Decoration 500,000

28 Photocopier 40,000 1 40,000

29 Fax Machine & Telephone sets 35,000 1 35,000

30 Air-condition 30,000 6 180,000

31 Software (Billing, Security, Monitoring etc) 200,000 1 200,000

32 Working Capital 900,000

Total 20,000,000
 Sources of fund

SlNo Sources Amount (Taka) %

1 Shareholder’s Equity 15,000,000 75.00

2 Bank Loan 5,000,000 25.00

Total Fund 20,000,000 100%

Statement of Earnings
For the 1st year
Particulars Amount in Taka
Revenue from Broadband Reg fee 589,500
Revenue from Dailup 1,055,394
Revenue from Broadband Bill 11,726,600
Total Revenue 13,371,494
Salary & Wages 2,665,000
Office rent 600,000
Office Maintanance & consumables 520,925
VSAT rent 4,802,400
Conveyance/Travel 240,000
Utilities 576,000
Insurance 84,000
Interest on loan 533,333
Depreciation 3,538,000
Other expenses 267,430
Advertisement 500,000
Bad debts provision 469,064
Cable maintenance 475,000
Total Expenses 15,271,152
Net Profit before Tax (1,899,658)
Net Profit after Tax
2nd Year Statement of Earnings
Particulars Amount in Taka
Revenue from Broadband Reg fee 530,550
Revenue from Dial up and others 3,517,206
Revenue from Broadband Bill 29,310,048

Total Revenue 33,357,804

Salary & Wages 3,731,000
Office rent 750,000
Office Maintanance & consumables 781,388
VSAT rent 12,390,000
Conveyance/Travel 324,000
Utilities 892,800
Insurance 105,000

Interest on loan 400,000

Depreciation 4,038,000
Other expenses 667,156
Advertisement 575,000
Bad debts provision 1,465,502
Cable maintenance 783,750

Total Expenses 26,903,596

Net Profit before Tax 6,454,208

Net Profit after Tax 3,872,525

Statements of Earnings in 3rd Year
Particulars Amount in Taka
Revenue from Broadband Reg fee 477,495
Revenue from Dialup & others 3,880,390
Revenue from Broadband Bill 43,599,888
Total Revenue 47,957,773
Salary & Wages 4,850,300
Office rent 937,500
Office Maintanance & consumables 898,596
VSAT rent 18,360,000
Conveyance/Travel 437,400
Utilities 1,205,280
Insurance 131,250
Interest on loan 336,000
Depreciation 4,838,000
Other expenses 959,155
Advertisement 632,500
Bad debts provision 2,179,994
Cable maintenance 1,371,563
Total Expenses 37,137,538
Net Profit before Tax 10,820,235

Net Profit after Tax 6,492,141

Projected Sales, Net Profit and
Dividend
Year 1 Year 2 Year 3

Revenue from Broadband Reg fee 589,500 530,550 477,495

Revenue from Internet Bill 12,781,994 32,827,254 47,480,278

Total 13,371,494 33,357,804 47,957,773

Net Profit after Tax - 1,821,820 6,492,141

Proposed Dividend - 1,000,000 4,000,000

Retained Earnings - 821,820 3,313,961

Net Profit to Sales 0% 5% 14%

Break Even Point 15th month

 Revenue, Cost and Profit
Forecast
Year 1 Year 2 Year 3

Sales Revenue 13,371,494 33,357,804 47,957,773

Total Cost 15,271,152 26,903,596 37,137,538

Profit before Tax (1,899,658) 6,454,208 10,820,235

Important Ratios
Year 1 Year 2 Year 3

Net profit Margin (after Tax) 0% 5% 14%

Return on Assets 0% 8% 23%
Return on Equity 0% 12% 43%
Number of Shares (Face Value Tk
10) 1,500,000 1,500,000 1,500,000

Dividend per Share - 1 3

Earnings Per Share - 1 4

Human Resources

 The personnel dedicated to this project has

extensive experience for successful
launching and hands on experience with the
biggest cable modem broadband based ISP
operating in our target market. The team
composed of these:-
 Same technical human resources
 Same marketing and finance people
 Jobs have been done so far as of September

15, 2003
Company Registration
 Rented office at Banani
 Domain Name Registration
 Company Bank Account
 Trade license of the company
 IRC
 TIN certificate
 VAT Registration
 Applied for 7 Telephone lines for official use
 Office decoration
 Applied for ISP license
 Opened one L/C of US$ 18,355 for Fibre Optic & Coxial Cables from CommScope, USA
 Applied for 60 Telephone lines for Dial-up Internet
 Network & Systems design completed
 Purchased 2 ton GI and 500kg clam
 12 kilometers claming and GI completed at Banani, Gulshan & Baridhara
 Jobs is under process of completion
 Finalization of Logo of the Company
 Employee Recruitments
 Procurement of connectors from Cornning
 Procurement of VSAT Equipments
 Procurement of Motorola Equipments
 Renting VSAT bandwidth link
 Procurement of Computers, Servers & others electrical equipments
 Claming, GI & Cabling at Banani, Gulshan & Baridhara area
Descriptions
GANTT Chart
Start Date Completed Remaining
Market Survey February 9, 2003 30 0
Technology Confirmation March 10, 2003 95 0

Asking for Quotation of equipments March 12, 2003 78 0

Presentation of Project Proposal March 30, 2003 30 0

Domain Name Registration April 1, 2003 1 0
Draft of Articles of Association April 5, 2003 7 0
Draft of MOU April 13, 2003 4 0
Company Registration May 3, 2003 30 0
ISP License May 3, 2003 12 0
House Rent May 3, 2003 28 0
Fund Raising (Tk. 1 Crore) May 3, 2003 28 0
Bank A/C Open May 3, 2003 2 0
Import License June 5, 2003 20 0

60 Telephone lines priority 7 lines July 25, 2003 90 0

L/C to import equipments July 25, 2003 35 0
Claming & GI August 15, 2003 90 15
Office Decoration October 15, 2003 60 30

Local equipment purchase & ready October 31, 2003 30 15

 Descriptions Start Date Completed Remaining
Brochures & marketing tools December 1, 2003 19 19
Cabling December 5, 2003 66 66
VSAT installation December 5, 2003 10 10
In house equipment installation December 10, 2003 21 21
tuning & networking December15, 2003 42 42
Renting VSAT link December 15, 2003 14 14
Door to door MarketingDecember 15, 2003 45 45
Testing and fine tuning January 15, 2004 15 15
Commercial operation January 31, 2004 1 1
Wish OCL all the best

Thanks for your kind attention