able of Contents 1.

0 Executive Summary
1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8

2.0

3.0

4.0

5.0

6.0

7.0

.................................. The Company and its Products/Services . . . . Financial Highlights . . . . . . . . . . . . Objectives . . . . . . . . . . . . . . . . . Mission . . . . . . . . . . . . . . . . . . . Keys to Success . . . . . . . . . . . . . . . Management Summary . . . . . . . . . . . . . The Market: Growth & Opportunities . . . . .. Funding Requirements . . . . . . . . . . . . The Company . . . . . . . . . . . . . . . . . . . . . 2.1 Company Ownership . . . . . . . . . . . . . . 2.2 Start-up Summary (with table & chart). . . . 2.3 Company Locations and Facilities . . . . . . 2.4 Company History (if applicable) . . . . . . . 2.5 References . . . . . . . . . . . . . . . . . 2.6 Strengths and Weaknesses . . . . . . . . . . Products and Services . . . . . . . . . . . . . . . . 3.1 Product and Service Description . . . . . . . 3.2 Future Products and Services . . . . . . . . 3.3 Service and Support . . . . . . . . . . . . . Market Analysis . . . . . . . . . . . . . . . . . . . 4.1 Market Segmentation . . . . . . . . . . . . . 4.2 Target Market Segment Strategy . . . . . . . 4.2.1 Market Needs . . . . . . . . . . . . 4.2.2 Market Trends . . . . . . . . . . . . 4.2.3 Market Growth . . . . . . . . . . . . 4.3 Industry Analysis & Competition. . . . . . .. 4.3.1 Industry Participants . . . . . . . . 4.3.2 Distribution . . . . . . . . 4.3.3 Competition and Buying Patterns . . . 4.3.4 Main Competitors & comparison. . . . Strategy and Implementation . . . . . . . . . . . . . 5.1 Marketing Strategy . . . . . . . . . . . . . 5.1.1 Pricing Strategy . . . . . . . . . . 5.1.2 Promotion Strategy . . . . . . . . . 5.1.3 Distribution Strategy . . . . . . . . 5.2 Sales Strategy . . . . . . . . . . . . . . . 5.2.1 Sales Forecast (with table & chart). 5.3 Operations Strategy . . . . . . . . . . . . . . 5.4 Strategic Alliances . . . . . . . . . . . . . . 5.5 Milestone Schedule (with table & chart) . . . . Management & Organizational Structure . . . . . . . . 6.1 Organizational Structure . . . . . . . . . . 6.2 Management Team . . . . . . . . . . . . . . 6.3 Management Team Gaps . . . . . . . . . . . . 6.4 Personnel Plan (with table). . . . . . . . . 6.5 Personnel Recruitment & Training . . . . . . Financial Plan Projections . . . . . . . . . . . . . 7.1 General Assumptions . . . . . . . . . . . . . 7.2 Key Financial Indicators . . . . . . . . . . 7.3 Break-even Analysis . . . . . . . . . . . . . 7.4 Profit and Loss Statement (3 or 5 years) . . 7.5 Cash Flow Statement (3 or 5 years). . . . . .

7.6 7.7

Balance Sheet (3 or 5 years). . . . . . . . . Business Ratios . . . . . . . . . . . . . . .

1.0 Executive Summary

This business plan has been prepared to introduce XYZ Telecom and provide a comprehensive understanding of its business operations, its growth strategy and funding requirements necessary to achieve its expansion plan objectives. 1.1 Company / Business Description The company is an existing corporation that was established in New York in 1996 under the registered name of XXX Group Telecommunications, Inc. and has been operating under the trade name XYZ Telecom. The company is 100 percent owned by its founder, Alexander XXX. XYZ Telecom has rapidly become a well-established voice, Internet and satellite service provider serving customers in the USA, Africa and other future geographic locations, providing the following telecommunications services: Wholesale Long Distance Provider Satellite Service Provider Telecom Infrastructure Equipment and Products Sales GSM Network Services (planned expansion) Not just a reseller, XYZ Telecom is a facility based telecommunications company that offers a high quality network through direct access, maintenance, and innovation of its infrastructure. It owns network equipment based on the latest existing developments via fiber optic or satellite directed links. Its versatility allows it to provide its customers with customized, cost effective, and reliable integrated solutions to meet their individual needs. XYZ Telecom is a proactive and technologically oriented company that has the expertise and seven years of successful operating experience to perform its operations efficiently and effectively by concentrating on its core activities while deploying the latest in telecommunications technology. XYZ Telecom has been gradually increasing its market share and level of operations, diversifying its services, and taking advantage of the changing telecom environment and the tremendous growth opportunities available in the regions it serves. Attracted by the huge potential of the telecom industry and based on its own business vision, XYZ Telecom has developed a practical and realistic growth strategy by gradually expanding its services and spreading its wings into other countries. XYZ Telecom has undergone an impressive transition from a small operation selling phones and accessories to its present status as a leader and significant player in providing a variety of profitable telecom services. The companys proven track record throughout its seven-year history provides the necessary foundation to enter its next phase of major development and growth by taking advantage of the tremendous opportunities that exist in providing telecom services in Africa and other regions. This next phase of development is the establishment of a GSM cellular network in the Democratic Republic of Congo.

1.2

Objectives

Establish the first phase of a GSM cellular network in the D R Congo by September 1, 2004. Implement an extensive marketing campaign to introduce the new GSM cellular service. Achieve $1.6 million in sales revenues in D R Congo in 2004, $18.8 million in 2005, $34.3 million in 2006, $49.9 million in 2007 and $65.4 million in 2008. Achieve $10.5 million in sales revenues for USA based services in 2004 (42% increase over 2003), $12.6 million in 2005 (20% increase over 2004), $14.5 million in 2006 (15% increase over 2005), $21.8 million in 2007 (50% increase over 2006), and $32.7 million in 2008 (a 50% increase over 2007).

1.3

Mission Statement

The mission of XYZ Telecom is to continue providing customized telecommunications services to its current wholesale customer base in Africa and the United States while expanding into the end-user GSM market of Africa and Latin America.

1.4

Keys to Success

Maintain and build upon existing customer contacts and relationships. Continue to provide quality services at competitive prices.

Expand level of services into new regions. Offer new services that complement existing services by implementing a GSM network, starting in D R Congo. Implement an aggressive marketing and promotional campaign for the GSM network roll out. Provide turnkey solutions and services. Stay abreast of the latest technological changes and market trends and apply appropriate strategies.

1.5

Management Summary

Alexander XXX, founder and CEO of XYZ Telecom, is an experienced voice, satellite, and mobile telecommunications executive with a keen eye for growing markets. Since establishing XYZ Telecom in 1996, he has gained considerable knowledge in the area of network development and integration through his direct involvement in all of XYZ Telecom projects. He plays a vital role not only in the management of new services, but is relied heavily upon for his technical and innovative input into the network design process. He has extensive contacts and relationships in Africa, which is essential in establishing new accounts. As founder of XYZ Telecom, Mr. Alexander has paved the way for the expansion of XYZ Telecoms network into Benin, Congo, D R Congo, Mali, Mozambique, Saudi Arabia, Senegal, Sierra Leone, South Africa and Togo. He firmly believes in the development of telecommunications systems in regions that have largely been neglected by the voice and satellite sectors as a whole. Alexander XXX is assisted by a strong management team that is very knowledgeable in the telecom industry. Additionally, XYZ Telecoms partner for the proposed GSM project in D R Congo brings a wealth of experience, capabilities and management expertise that will greatly benefit the success of XYZ Telecoms proposed expansion plans.

1.6

The Market: Growth and Opportunities

The needs of individuals and businesses for telecommunications services have undoubtedly been growing at a phenomenal rate and continue to do so. This is particularly true in Africa where supply has significantly lagged overall demand. Technological change has created opportunities for market competition to replace existing telecommunications monopolies. The highlights of research analysis conducted can be summarized as follows: Worldwide total subscribers have increased from 500 million in 1992 to 2 billion in 2001. Worldwide total subscribers are projected to reach over 4 billion by 2005, representing an eightfold increase over 13 years. Worldwide total traffic minutes have increased from 43.2 billion in 1992 to 144 billion in 2001. Worldwide total traffic minutes are projected to reach 226.6 billion by 2005, representing a fivefold increase over 13 years. Worldwide cellular subscribers have increased from 24 million in 1992 to over 1 billion in 2002, representing a 41.6 fold increase. The total number of global wireless subscribers is predicted to reach 1.6 billion by the end of 2005. TIA forecasts that the global telecommunications industry will see a 9% increase in compound annual growth between 2003 and 2006. Africa represents 3% of the world cellular subscribers as of June 2002 with plenty of room to grow. The number of African cellular subscribers has increased from 0.4 million in 1994 to 34.9 million in 2002, representing an 87.25 fold increase over nine years. Mobile phones per 100 inhabitants in Africa reached a rate of 4.5 in the year 2002 from essentially zero in 1994. Mobile phones surpassed fixed-line phone users since the year 2000. GSM represented 95.61% of the 34.3 million African cellular subscribers as of February 2003 compared to 70% for the world. GSM in Africa grew at a 101.85% rate from the previous 12 months, double the world rate. The average annual cellular expansion rate in Africa increased from 60% in the mid-90s to more than 100% in 2000 per ITU. With 650 million people, sub-Saharan Africa has emerged as the fastest growing market for mobile phone service. In 2003, mobile subscribers shot up 37% to 34.4 million versus a 32% rise in Eastern Europe, the number 2 growth

area, according to researcher Gartner. The World Bank estimates that sub-Saharan Africa will spend $3.2 billion annually over the next five years on wireless infrastructure. Telecommunications is bound to profoundly alter the economic, social and political landscapes of Africa. In a continent where there is a lack of good roads, poor postal services and where there is a serious information deficit in most fields, telecommunications access is an essential condition for economic progress. It offers Africa a dramatic opportunity to leapfrog into the future, breaking out of decades of stagnation or decline. Advanced telecommunications capabilities are as critical to the African economy and quality of life as are highways, bridges, electrical grids and water systems. Telecommunications is an essential element for the development and prosperity of African countries. Additionally, population growth and the increase in the number of businesses is putting a strain on existing services, necessitating the need for new or expanded services. Local public and private telephone companies, weather in Africa or anywhere in the world, do not have a complete world telecom network, as it is impractical to do so. To allow people to be connected from their system to other countries, they must utilize intermediary companies, such as XYZ Telecom, to route calls to an outside operator. Thus, the activities of XYZ Telecom will always be required. The trend towards increased satellite telecommunications and the dominance of GSM technology in Africa is unquestionable.

1.7

Financial Highlights

The following table summarizes the financial highlights of XYZ Telecom for the last five years of its operating history. Revenues have steadily increased from $382,523 in 1999 to $7,365,306 in 2003, representing a 19.25 fold increase over the five-year period. Gross Profit has increased from $118,167 in 1999 to $1,144,047 in 2003, representing a 9.7 fold increase over the five-year period. Net income has increased from $12,977 in 1999 to $83,396 in 2003, representing a 6.4 fold increase over the five-year period.

Past Financial Highlights: 1999 - 2003

1999 $382,523 $118,167 $ 12,977 $ 68,165 $ 54,799 $ 13,366 $ 68,165 2000 $1,693,530 $ 390,153 $ 32,454 $ 288,027 $ 251,191 $ 36,836 $ 288,027 2001 $1,368,870 $ 181,204 $ -238,243 $ 449,941 $ 650,799 $ -200,858 $ 449,941 2002 $7,359,944 $ 953,092 $ 195,906 $2,110,295 $2,119,814 $ -9,519 $2,110,295

Revenues Gross Profit Net Income Total Assets Liabilities Equity Total Liabilities & Equity

The following table provides the financial projections highlights of XYZ Telecom for the next five years, which include the proposed GSM expansion project for D R Congo. Detailed financial statements projections are included in Section 7. Revenues are projected to reach $98.2 million by 2008, a 13.3-fold increase from actual revenues in 2003. Gross profit is projected to reach $59.2 million by 2008, a 52-fold increase from actual gross profit in 2003. Net income is projected to reach $44.7 million by 2008.

Projected Financial Highlights: 2004 - 2008

2004 Revenues Gross Profit Net Income Total Assets $12,140,332 $3,304,722 $628,026 $12,811,895 2005 $31,447,598 $17,384,287 $6,699,614 $31,879,741 2006 $48,896,638 $30,001,613 $17,388,874 $44,221,737 2007 $71,724,957 $44,245,182 $30,867,625 $69,514,048 2008 $98,191,436 $59,200,768 $44,705,976 $102,117,352

Liabilities Equity Total Liabilities & Equity

$10,709,993 $2,101,903 $12,811,895

$23,078,224 $8,801,517 $31,879,741

$18,031,347 $26,190,391 $44,221,737

$12,456,032 $57,058,016 $69,514,048

$353,360 $101,763,992 $102,117,352

1.8

Funding Requirements

XYZ Telecom is seeking a total of $28 million in funding in order to implement its expansion plans for a GSM cellular network in the D R Congo. Due to the fact that infrastructure equipment costs have dropped significantly in the past three years by a factor of 10, XYZ Telecom will be able to enter the market with a capital investment of $100 per subscriber, which is significantly less than the $472 per subscriber invested by its competitor Vodacom. The project will be implemented in five (5) phases, starting with the first phase of funding consisting of $5 million on 5/1/2004. The term of each loan is 5 years at an assumed interest rate of 10%. The following table summarizes the use of funds and when required.

Use of Funds
Description Expansion Telecom Equipment Set-Up Remote Offices Sales & Marketing Legal & Consulting Fees Closing Costs Total Expansion Costs 5/1/2004 $4,290,000 $250,000 $380,000 $50,000 $30,000 $5,000,000 9/1/2004 $4,290,000 $250,000 $180,000 $10,000 $30,000 $4,760,000 11/1/2004 $1,290,000 $150,000 $0 $0 $0 $1,440,000 2/1/2005 $12,290,000 $100,000 $1,360,000 $80,000 $0 4/1/2005 $2,970,000 $0 $0 $0 $0 Total $25,130,000 $750,000 $1,920,000 $140,000 $60,000 $28,000,000

$13,830,000 $2,970,000