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DRC operations

DRC is the largest country by area in the sub-Saharan Africa and just second after Algeria in the whole Africa. It’s also the 11th largest country in the world. With a population of around 105 million it’s the third most populous country in Africa. (The Economist Intelligence Unit, 2021) Population growth rate has been above 3% annually (Data Commons, 2021) for the last 15 years and is predicted to continue in the coming years.

In 2019 it’s GDP has amounted over $50 billion and has been climbing since 2002 reaching annually growth rates of up to 10% (Data Commons, 2021). Future predictions show continuous uptrend with estimated 3% GDP growth in 2022 (Trading Economics, 2021).

Operations in DRC are already in the funding phase as it is of strategic importance to cover DRCs capital city Kinshasa because of its size and geographical position. The city is constantly growing with a population of over 15 million people in 2021. Its terrain offers best performance for K3 technology with an easy expansion option to Congo Brazzaville.

There are 3 initial base stations planned in Kinshasa at:

  1. Binza Pigon
  2. Mont Ngaliema
  3. Limete Tower

This setup will allow coverage of about 90% target areas within Kinshasa.

After setting up base in Kinshasa, expansions are planned for Lubumbashi, Kisangani, port and trade cities of Matadi, Boma and Moanda, and mining zones in Mbuji-Mayi.

Kinshasa coverage map Kinshasa coverage map Figure 30 Kinshasa coverage map

Kinshasa coverage map Figure 31 DRC expansion plan

High level Economics:

  • Expected to yield EBTIDA margins of about 50% to 60%
  • Profitability is reached with only ~3,000 customers
  • Break-even time per customer is 2-4 months

90,000 customers in DRC will yield an entity value of USD ~675M (90,000 customer equates to about 20% of the addressable market in Kinshasa)

Profit and Loss Statement

Period Year 1 Year 2 Year 3 Year 4 Year 5
Total Number Of Users by Period-End 5,201 19,568 39,541 64,771 90,000
Total Number Of Base Stations 2 5 9 14 19
Revenues
Service Fee 1,344,098 19,615,757 44,396,684 81,363,085 120,721,028
Discount/Free trials (352,609) (982,990) (1,366,595) (1,726,226) (1,726,226)
Connection Fee 656,970 1,814,750 2,522,945 3,186,878 3,186,878
Total Revenues 1,648,460 20,447,517 45,553,034 82,823,738 122,181,681
Total Direct Cost of Sales 1,749,443 5,779,633 11,034,718 17,812,207 24,123,583
Total General & Admin Costs 1,894,292 3,902,367 6,498,818 10,240,716 13,636,687
EBITDA (1,995,275) 10,765,517 28,019,498 54,770,814 84,421,411
Terminal value at 8x EBTIDA multiple 675,371,286

Table 9 DRC operations Proffit and Loss Statement

Economics currently ignore the upside potential from:

  1. Expansion to Phase II markets (named above)
  2. Targeted enterprise solutions DRC along with the broadband offerings (IT Security services, Data center management, network solutions, and others)
  3. Lower income and mass-market solutions already in pilot stage in Sierra Leone (public Wi-Fi mesh zones)

We intentionally remain conservative in our projections. In Kinshasa alone, indications point to a much great growth potential. With 15 million people in the city, a high cost of living for western standards (>$3,000 rent a month for a 2-bedroom apartment) and a shocking lack of true broadband and modern entertainment services, the market is in desperate need for modern standards.

Detailed business plan is available for interested, registered investors on request.