Threats of new Entrants:

Due to the nature of the ISP market, the threat of new entrants is reasonably
strong. There are low barriers to entry - all that is needed to become an ISP is a
small amount of capital and some technical know-how. Much of the ISP‟s
activity can be outsourced, which can reduce initial costs. Regulation in this area
is low, meaning that anyone wanting to enter the market can do so easily. Due to
the concept of interconnection, companies need not own any sort of network they
can use other networks at a price. There have been, and continue to be many new
entrants to the market. In the last 18months, the number of ISPs has leveled off.
However, there have been a tremendous number of mergers and acquisitions
within that time, suggesting that for every merger or acquisition there has been a
new entrant. Although many of these new companies will fail to survive in the
long run, those that find a niche market and provide a satisfactory service will
always have sufficient customer base to continue.

Bargaining Power of Supplier:

The suppliers to ISPs are those that own the networks. These tend to be Telco’s
and backbone providers. Backbone providers generally own what is the absolute
backbone of the Internet, and control routing and switching of traffic. Telco’s sown
the local loop copper pairs, which most customers use to connect to their ISP, the
lines that ISPs lease to connect to the Internet, and much of the Internet backbone.
Large ISPs are often the suppliers of capacity to smaller companies.
Because it is impossible for every ISP to build their own entire network, it is
necessary that companies use the existing networks. They have to do this, which
gives the suppliers some power. However, because there are many suppliers
offering the same service, this competition has led to their power being lessened.
Bargaining Power of Buyer:

Although an individual consumer has little or no say about how much an ISP
charges, due to the rivalry within the market, ISP generally have to offer their
services at reasonable prices. They will lose their customer base if they charge
more for a service someone else provides more cheaply. Switching costs are low,
and so churn rates are high. Businesses have a little more bargaining power,
particularly if they are a significant client of the ISP. However, if a business’s
happy with its ISP it is unlikely to change, and because there is essentially no
ability to backward integrate; the customers tend to have little bargaining power.

VALUE CHAIN ANALYSIS:

NayaTel is a facilities based carrier. That means we build the network that we
operate and sell services associated with it. NayaTel is the first broadband Fiber-to-
the-User (FTTU) network in Islamabad, Pakistan. In the first phase a state-of-the-
art fiber optic network core was laid down and in the second phase distribution
ring was deployed. We have built a ring network that completely encircles the
business and residential areas in the metropolis. Our core network is completely
redundant and self-healing. The Metro Ethernet services provided by NTL are
based on Cisco Systems platform, an optimized, carrier grade switching
infrastructure designed specifically to support advanced services over a fiber optic
infrastructure. Our data center is equipped with Cisco routers and high end Sun and
Dell Servers. Our core switches provide high capacity core functions as well as
provide sub-second recovery from many potential network outage events. NTL has
deployed Access and NGN platforms from Alcatel and world's best video head-end
from Scientific Atlanta to ensure quality and performance requirements of our
customers. Our passive optical equipment is supplied by world leaders of
component manufacturing, i.e., ADC and Corning.
Fiber networks clearly outweigh all other broadband options in performance,
security, and scalability.

NAYATEL VALUE CHAIN:

Nayatel's FTTU network deployment is linked with a GIS based in house built
application for effective monitoring and trouble shooting. Our Network Monitoring
System (NMS) continuously monitors all active components and business
customer connections in our network. Any service impacting event generates an
instant notification to our on-call engineers. Our 24 hour TAC (Technical
Assistance Center) can also escalate problems directly to a level ensuring prompt
response.
Nayatel's redundant network enables both large and small companies to
concentrate on their end customers rather than on IT-intensive management
activities. We deliver an unbeatable combination, a fast, secure, reliable network
and a tenacious and highly qualified problem-solving professional team with years
of Internetworking experience. NayaTel provides one stop solution to meet your
need for high-speed Internet access, reliable telephone services with advanced
features, point to point circuits or VPNs and digital quality Cable Television. NTL
recognizes your need to stay ahead of the curve and provides flexible, reliable and
affordable solutions for your business and home use. Nayatel's FTTU network
provides scalability, service neutrality while preserving QoS, and manageability,
which requires distinct type of Internetworking devices designed to meet demands
of carrier fiber infrastructure, while at the same time offers level of sophistication
that the customer applications and needs demand. Broadband Passive Optic
Network (BPON) Nayatel's FTTU network uses Broadband PON (BPON); which
is widely used technology to deploy Fiber-to-the-User (FTTU) services. BPON
(Broadband PON) is a standard based on APON. It adds support for WDM,
dynamic and higher upstream bandwidth allocation, and survivability. Why Fiber-
to-the-User (FTTU) services?
Internet community finds new and compelling broadband applications continually
which drive the insatiable requirement of amount of bandwidth which the users
want for Internet services.
FTTU removes the service bottlenecks of Last Mile and First Mile challenges.
Currently in Pakistan optical fiber connectivity is established within PTCL
telephone exchanges and between cities. The local loop, i.e., access to customer
premises from telephone exchange is all copper, which has limitations in terms of
bandwidth and serious quality issues. This 'First Mile' or 'Last Mile' is and will
remain a bottleneck that needs to be addressed to enable customers to take
advantage of services of 21th century and beyond.