BACKGROUND

Afritel Corporation, one of the leading telecom providers in the African continent, has witnessed over 50 years of
success, initially in the fixed line segment and, over the past 25 years, in mobile telephony as well. Being the only
professionally run telecom company in many of the countries it has operated in, it has enjoyed a steady increase in
sales, and consistent profits, without the need to significantly innovate.

CHALLENGE

Over the past two or three years, Afritel is being threatened by the market entry of Freetel, the telecom arm of an
Asian industrial behemoth. Freetel is a company with deep pockets, that has promised to transform telecom on the
African continent with the following five-point strategy:
a. Complete overhaul of the telecom network via installation of its own 4G and 5G network infrastructure in
most countries
b. Aggressive introductory pricing, with almost free monthly plans, inclusive of unlimited calls and 3 GB of data
c. Attractive pricing of mobile phones, when bundled with new long-term mobile contracts
d. Proposed launch of personal and commercial high-speed broadband services
e. Introduction of an online TV platform

Afritel also fears that Freetel will use its deep pockets to curry favour (unofficially, of course) with many national
governments on the continent.

Afritel’s Board has, for the past few years, feared the entry of a cash-rich predator such as Freetel into the African
market, but has not acted on this fear. They know that if they do not do something about this, they will be decimated
in almost all their markets.

For the moment, the company is cash-rich themselves, having enjoyed years of profits, matched with conservative
spending.