Info Pack 2012/13
In South Africa, the telecoms sector is estimated to be worth R99-billion and is growing at 14% a year. It contributes some 7% to gross domestic product the same as the mining industry. Introduction Welcome to DSL Telecom The market is in high demand for communications specialists. We are actively screening entrepreneurs with a desire to serve available regional markets. Join our rapidly growing network of trained professionals meeting the communications needs of the South African economy. Start a business where little professional competition exists Become a leader in the one of the fastest growing industries in SA Offer your customers a valuable alternative to fixed line telephony Save your customers thousands of rands To Our Prospective Licensees DSL Telecom is a division of Virtual Voice Telecom. DSL Telecom is taking the next step in its evolution and is offering prospective entrepreneurs an exciting opportunity to become part of the Multibillion Rand Telecommunications Industry which is still in its infancy in South Africa. Over the next 36 months, DSL Telecom will establish a National Network of 30 branches with the primary objective to focus on the massive demand for PBX and related telephony services in small and medium sized businesses. Our partners will enjoy the benefit of a proven system to rapidly gain a foothold in the market through innovative business processes and it is expected that the DSL Telecom network will become the market leader in respect to IP Telephony within the next 18 months in Southern Africa. This info pack has been compiled to give you information regarding the market and more importantly about DSL Telecom and the opportunity that the current situation now presents. Whilst every effort has been taken to provide you with sufficient information to make a decision, there is some sensitive information which has been omitted to protect DSL Telecom s proprietary rights, however, these aspects can be discussed with you, by appointment if we feel that mutually you have the right profile to become part of the network. 11 1
DSL Telecom INFO PACK 2012/2013 Publication date: Version 2.00 January 9th 2013 Company registered as: Virtual Voice Telecom t/a DSL Telecom Nature of business: Consulting and Installation of IP PBX systems (SMB Market) Web Address: www.dsltelecom.co.za The Virtual Voice Telecom Group: 306 Oakmont, Somerset Links Business park De Beers Ave Somerset West Cape Town 7130 Contact: Tel: 021 852 3815 Fax: 086 582 9038 Banking Details: Virtual Voice Telecom Standard Bank Helderberg Branch Account #: 072461128 Branch Code: 033012 11 2
01 BACKGROUND In 2004 VoIP (Voice over Internet Protocol) was legalised in South Africa. This bought a host of new opportunities to companies wanting to enter the lucrative telephony space. Some of the traditional analogue vendors tried to jump on the VoIP bandwagon in the years following the announcement in search of even greater profits and returns. What they failed to realise was that the skills and methods used to successfully deploy an IP telephony network was vastly different from the traditional methods they had been using to deploy analogue telephone networks over the last 50 years for the most part the analogue vendors failed to make the paradigm shift needed to capitalise on the VoIP explosion. Thus, DSL telecom was developed to tap into this lucrative market drawing on various talents and core competencies, such as sales & marketing, IP networking and legal expertise to develop a business with a focused strategy, to educate and challenge the consumer to the obvious advantages of IP PBX Systems and VoIP. Through our growing national network, we provide an informed consultation in respect to simple and effective solutions with regard s to telecommunications in the small and medium business sector. DSL Telecom understands the need to educate and inform the South African public to the numerous advantages of IP Telephony products and services in order to enhance efficiencies in their own business and dramatically cut costs in order to drive their own business s forward. 02 BUSINESS OBJECTIVES The business objective will be achieved through the establishment of a successful network of DSL Telecom Agents throughout South Africa, each office independently adhering to the standard operating procedures developed in accordance to recognised best business practices and strict operating guidelines. 03 WHY CHOOSE A DSL TELECOM AGENCY? 1. Proof of Concept: After being involved in the South African Telecommunications industry since 2004 and the rapid growth and market acceptance of VoIP over the last 10 years, DSL Telecom was launched in South Africa in 2009 to market IP-PBX systems to the SMB market that were underserviced and overcharged by traditional analogue vendors. In less than 3 years we have become the most relevant SMB IP PBX Vendor in South Africa. We have forced our way into a traditionally analogue market with high tech IP based telephone systems, to which the market has responded positively. We have made the mistakes and developed a method of doing business that works well and produces successful results. 2. Strong Brand: We understand how to exploit the obvious leverage offered by association. DSL telecom has done the groundwork in establishing consumer confidence by partnering with world renowned brands to offer a complete system built on best practice. DSL Telecom partners benefit from the gift of association with these world class brands. 3. Training Programs: We have established training programs designed to bring you up to speed and keep you informed on the most successful methods to run this business. 11 3
4. On-going Support: You re not alone when you re building and running your business. You can always call on experienced people when you hit a rough spot or want to share new ideas for growing the business. 5. Economies of Scale: As part of the DSL Telecom network you can take advantage of the buying power of the entire system to negotiate prices for everything you need at significantly lower levels than you could achieve as an independent operator. This applies not only to equipment purchases, but also to the supplies, inventory, uniforms and anything else you ll need on an on-going basis. 6. Avoidance of Risk: The biggest reason to buy a DSL Telecom Agency is that, if you re smart, it will help you avoid much of the risk of starting a new business. Make no mistake you have to do your due diligence, but if you do, you can determine with a fair amount of certainty what happens if you become a new DSL Telecom Agent. 04 OUR PRODUCT/SERVICE OFFERING The Design, Installation and Maintenance of IP PBX Telephone systems and Cost Saving VoIP Calling Services. The customer has options to engage in our support programs and will find value in the following benefits of being associated with DSL Telecom: Service Cost Reduction Control Flexibility Choice 05 TECHNOLOGY VoIP is Africa s future communications platform. The technology is mature and market uptake has started increasing rapidly as the market becomes aware of the obvious advantages of VoIP. What is an IP PBX? An IP PBX is a complete telephony system that provides telephone calls over IP data networks. All conversations are sent as data packets over the network. The technology includes advanced communication features but also provides a significant dose of worryfree scalability and robustness that all businesses seek. The IP PBX is also able to connect to traditional PSTN (Telkom) lines - so upgrading day-to-day business communication to this most advanced voice and data network is a breeze! 11 4
Benifits of a IP-PBX: 1. Much easier to install & configure than an analogue phone system 2. Easier to manage because of web/gui based configuration interface 3. Significant cost savings using VOIP providers 4. Eliminate phone wiring 5. Eliminate vendor lock in 6. Scalable 7. Better customer service & productivity 8. Twice the phone system features for half the price 9. Allow hot desking & roaming 10. Better phone usability: SIP phones are easier to use 06 FINANCIAL ANALYSIS (Ex vat) UNITS INSTALLED 15* 25* 35* Turnover (287 250.00) (478 750.00) (670 250.00) Total Equipment Costs 182 250,00 303 750,00 425 250.00 G.P 105 000,00 175 000,00 245 000,00 Total Costs 56 500,00 89 050,00 122 950,00 YOUR NET PROFIT 48 500,00 85 450,00 121 550,00 *Based on a 8 user/extension PBX system with 4 x Telkom Lines. ESTIMATED MONTHLY COSTS BREAKDOWN Brand Management 3000 3000 3000 Fee Lead Generation Fee 2500 2500 2500 Support Staff 5000 5000 5000 Bank 500 1000 1500 Premises 5500 5500 5500 Insurance 1500 1750 1950 Phone/Fax/E-mail/Cell 1500 2700 3900 Stationary 500 600 700 Book Keeper 1500 1500 1500 Marketing Direct 5000 10000 15000 Fuel and Toll 5000 8000 11000 Vechile 5000 7500 10000 Sales Wages 10000 20000 30000 Tech Wages 10000 20000 30000 *Based on a 8 user/extension PBX system with 4 x Telkom Lines. *Agents RRP is R19150.00 for a 8 User system with 4 Telkom lines (64% Mark-Up) Gives Agent R7000.00 per sale *Customer Can alternativly rent the system for monthly R808.00 11 5
07 ONGOING REVENUES (Ex vat) DSL Telecom has successfully negotiated an annuity component within the business model for its Agency partners allowing for an exit strategy. VoIP Minutes All of the PBX systems sold by DSL Telecom are VoIP compatible, the PBX s can route a customer s phone calls over our VoIP Network saving customers up to 35% on their monthly telecom spend, while at the same time providing extra voice lines. Monthly Sales Annuity Per Month Annuity Per Month after 1st year 15* 2,025.00 24,300.00 25* 3,375.00 40,500.00 35* 4,724.00 56,688.00 *Based on an a 5 user system with a typical average monthly phone bill of R1800.00 Agents earn +/-7.5% of their customers monthly phone bill. This means that after the first year an agency completing 25 installs per month could earn an additional R40,500.00 ongoing income per month just from their customers making and receiving phone calls! Service Agreements (SLA s) DSL Telecom offers customers an unlimited Telephonic and Remote support Service Level Agreement with 1 physical call out every quarter from R299/month. This SLA is mandatory for all customers. It allows DSL Telecom agents to be able to afford to give all their client s unmatched service. R225 of this fee will go to the DSL Telecom agent and R74 will go to head office this helps us give our Agents Support as it is needed. This translates to R40,500.00 per month in SLA Fees for a business partner doing 15 installations a month after the first year! Peripheral Products Additional revenues can be made from reselling our ISP services such as ADSL lines, ADSL data, Fax to E-mail etc. This projection is to assist the DSL Telecom Partner and should be used as a guideline only. We cannot guarantee that the figures set out herein will be achieved. 11 6
08 MARKET POTENTIAL / COMPETITIVE ADVANTAGE At this time the Industry is in its infancy and relevant skills to compete are scarce. The possibility of a relevant competitor emerging is limited. Within DSL Telecoms Target Market, more than 60,000 new business start-ups per annum and 3.2 million established SMME s stand to benefit from the product/ service offering and thus the market potential is obvious. 09 IS SUCCESS GUARANTEED? The success of any business to a large degree is based on an individual s drive, ambition, willingness to acquire and apply new knowledge and adherence to various essential success principles. The DSL Telecom team understands the need for the development and maintenance of public confidence in the DSL Telecom brand, and sees this as one of our primary roles. With regards to the concept and the business model, DSL Telecom is focused on the development of a critical path, which will provide the DSL Telecom partner with a system for success, negating to a large extent, the risks generally associated with business start-ups. 10 OUR DIFFERENCE As is evident from the above, DSL Telecom proves to be one of the most cost efficient systems on the market today, this fact combined with: Guaranteed system for success strategy Lead generation engine Industry rebates and discounts Strict operating procedures in line with iso 9001 Intensive on-going training programmes National footprint development Shared intellect communications platform 11 7
11 DSL TELECOM PARTNERSHIP CRITERIA Please note that every Licensee and every licensed business is different. Key factors such as location and local economic factors also play an integral part in the success of every licensee. There are certainly many factors not listed here which could contribute to the success of any business. We cannot guarantee your success and the following list must not be taken as a promise on the part DSL Telecom that you will be successful if you possess the following characteristics: Positive Mental Attitude Technical Aptitude Confident and Independent A Strong Understanding of Sales and Marketing Entrepreneurial Nature Emotionally Intelligent and Motivated A Strong Team Player Express an Owner/ Operator Mentality Access to Unencumbered Capital 12 DSL TELECOM INITIAL TRAINING Included in the initial fee and prior to commencing operation, 5 day initial training will be given by DSL Telecom in Cape Town. Technical, Business and Marketing training will be updated on a regular basis enabling all concerned to keep abreast with current market trends. DSL Telecom will also ensure that all partners are capable to carry out their business operations with adequate knowledge and develop their business from a marketing and administrative viewpoint. Content Brand Orientation Success and Entrepreneurship Legal and Liability Sales and Marketing Customer Experience Management Consumer Protection Act Technical Theory Practical Training 13 TRAINING DATES 2013 DSL Telecom initial training is limited to 3 per course. 1. 4th Feb 2. 2nd April 3. 27th May 4. 22nd July 5. 16th September 6. 11th November Additional delegates are welcome at R5,000.00 pp. 11 8
14 YOUR INVESTMENT DSL Telecom Agency has an illustrative value and primary investment amounting subject to increase each quarter. 1. Initial Fee R47750.00 (Forty Seven Thousand Seven Hundred and Fifty Rand) which covers the following: (5 day Brand and Technical Orientation) 2. Initial Stock the Agency is required to purchase and install a DSL Telecom IP PBX system prior to commencing trade. This will entitle the partner to: Full Initial Training Operations and procedures manual CRM software Corporate Identity DSL Telecom Territory License Remote Support Software License Rights to the DSL Telecom Brand Mechanism DSL Telecom installers Licence and Certification Email Address area@dsltelecom.co.za 15 INITIAL SET UP COSTS In addition to the Agency fee, an additional amount is required to set up the business. Travel and Accommodation R5,000.00 Registrations R5,000.00 Vehicle Branding R5,000.00 Corporate Clothing R2,000.00 Marketing Material R5,000.00 Office Equipment (PC, Printer etc) R15,000.00 Office Overhead (first 3 months) R 50,000.00 *Please note these costs are indicative for a new start-up 16 INFRASTRUCTURE REQUIRED Due to the nature of this business, a successful DSL Telecom partner is advised to have a business premises; +-85m2 The DSL Telecom partner will require: Simple Office / Home Office Dedicated Business Fax,Telephone and Answering service (PBX) Suitable Branded Vehicle Broad Band Internet Access (Hi Speed) 11 9
17 MONTHLY BRAND MANAGEMENT FEE (BMF) The DSL Telecom Partner is required to pay DSL Telecom a fixed monthly management fee of R3,000.00 ex vat monthly (linked annually to a 5% increase) for the on-going business support. 18 DSL TELECOM PARTNER SUPPORT Business Building Seminars - All DSL Telecom partners within the national network will be re quired to attend business workshops during the year, to assist the DSL Telecom network in developing new strategies and ideas with regards to technical, marketing and business skills. Weekly Updates You will receive via email a weekly newsletter from the various divisions with the DSL Telecom Exco, outlining amongst other things new product developments, industry news, top sales performers and various opportunities available to the network from time to time. Online Lead Generation Engine DSL Telecom brand development includes an ever increasing web based referral system whereby potential clients will be encouraged to request a quote from you directly based on the location of the enquiry. Exco Direct As long as you adhere to the DSL Telecom system for success, each division head of the DSL Telecom team (technical, business, marketing, financial and legal) are available to you via email and or mobile phone to discuss any and all relevant questions and on-going sup port pertaining to the on-going success of your business. National Marketing Campaign Once a competent national network is established an aggressive national multimedia campaign will commence educating the public to the advantages of the DSL Telecom Solution. CRM software CRM stands for Customer Relationship Management. It is a process or methodology used to learn more about customers needs and behaviours in order to develop stronger relationships with them. CRM is a process that will help bring together lots of pieces of informa tion about customers, sales, marketing effectiveness, and responsiveness and market trends. CRM helps businesses use technology and human resources to gain insight into the behaviour of cus tomers and the value of those customers. 11 10
19 NEXT STEPS Upon completion of due diligence from both parties, the investor will be required to pay DSL Telecom Security a deposit of R 5,000.00, to secure the territory license. The balance will be required by DSL Telecom 15 working days prior to commencement of the induction training. To engage please contact dean@dsltelecom.co.za to request deposit invoice. Essential Reading The Watchman s rattle by Rebecca Costa The Google Story by David A.Vise & Mark Malseed Steve Jobs A Biography by Walter Isaacson Think and Grow Rich by Napoleon Hill Outliers by Malcolm Gladwell The e Myth by Michael Gerber Essential Viewing The Call of the Entrepreneur The Social Network (2010) This Info Pack should assist you in assessing the opportunity. While it includes some information about your contract (agency agreement) do not rely on it alone to understand your contract; read your entire contract carefully. Buying a brand is a serious undertaking; take your time to decide. It is recommended that you have the contract explained to you by an attorney and you should seek accountancy and financial advice on the business proposition. Thank you for your Interest. Before taking the next step you are encouraged to gather all the facts necessary for you to make an intelligent decision, after which time we can meet to discuss the association in more detail. Regards Mr Dean Schreuder Managing Director Cell: 0741 688 529 Email: dean@dsltelecom.co.za All documentation and information disclosed by DSL Telecom is confidential and copyright thereof vests with DSL Telecom. The contents of such information may not be used by or disclosed to any person without the written consent of DSL Telecom. 11