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international telecommunications distribution

International Telecommunications Distribution

The International Telecommunications Distribution segment houses all group companies involved in the distribution of prepaid secure e-tokens of value within global emerging and developing markets.

The group’s strategic objective is to become a leading provider of transactional services within global emerging and developing markets. Replicating the group’s distribution model in selected international markets will diversify its revenue and profit streams over the medium term, provide global mobile and fixed line network operators, prepaid utility providers and suppliers of varied e-tokens access to robust, scalable and easily deployable multi-application distribution solutions that efficiently facilitate end-user access to a broad range of e-tokens, via their chosen delivery device across multiple geographies.

Internationally, the group remains cognisant of the need to adapt and deploy the most appropriate distribution methodology and technology solutions in order to successfully deliver a diverse range of e-tokens within particular markets. This awareness has allowed the group to successfully deploy and integrate its proprietary processing back-end technologies into many types of third-party infrastructure such as multiple POS devices, ranging from mobile phones to terminals, to vending machines and mainframe enterprise systems.

The group will only enter a market with like-minded local partners

Case study [PDF - 176 KB]

International Telecommunications

International Telecommunications Distribution

A cornerstone of the group’s growth strategy is its ability to rapidly distribute proprietary and third party e-tokens through a global network of touch points. International footprint growth remains a key priority, but the group will only enter a market if the majority of the following stringent strategic and operational criteria have been assessed:

Key partnerships;
Presence of large unbanked and under-banked communities;
Size of market;
Likelihood of the group’s ability to be a significant distributor in the territory;
Strategic relationships; and
Is the market an active remittance corridor?

Oxigen Services India (Oxigen)

Oxigen is an IT enabled multi-services platform and virtual distributor of recharge vouchers, repaid subscriptions and bill payments, including the electronic distribution of prepaid airtime for India’s leading telecommunications operators. Oxigen has in excess of 50 000 touch points and is the leading virtual distributor of prepaid airtime in India.

Africa Prepaid Services (APS)

APS is a distributor of bulk printed physical prepaid products and starter packs. APS is currently active in Mozambique and the DRC and intends to pursue other opportunities on the African continent (excluding South Africa).

SharedPhone International (SharedPhone)

SharedPhone operates a SIM-card mobile payphone solution that allows vendors in rural areas – including other African countries – to offer consumers access to a public payphone and also vend prepaid airtime and prepaid electricity.

Content Connect Australia (CCAus)

In order to enter the mature and established Australasian market, the group established, together with a local partner, Content Connect Australia, an aggregator of localised content to mobile operators and third-party clients throughout Australia. The group will leverage its investment by increasing the range of e-tokens it distributes in Australia within the forthcoming year.

Post year-end events

Oxigen

The group increased its stake in Oxigen, its Indian associate by 3,85%, equalling Microsoft’s 38,85% shareholding.

Ukash

A developer of proprietary and patented prepaid cash voucher technology; provides the group with access to a footprint in Western Europe and its innovative technology which allows for online redemption capabilities of multiple products and services through a single prepaid voucher.

Blue Label Mexico

The group jointly established Blue Label Mexico with Nadhari S.A. de C.V., a Mexican company with strategic and operational emerging market product and service development expertise. Blue Label Mexico will pursue opportunities complementary to the group’s current areas of business and is an important step in the group’s goal of creating a transaction-based distribution network in the emerging markets of Latin America, one of the world’s largest remittance corridors.

Performance review

Within the International Telecommunications segment, the loss from Oxigen of R19,6 million was predominantly due to the costs related to the aggressive rollout of POS devices. Oxigen’s unique value proposition as a centralised channel for e-tokens which are able to be conveniently distributed through rural POS devices has begun to gain significant traction. Although growth of Oxigen’s footprint has become more structured, it is not anticipated that Oxigen will be profitable by the group’s next financial year-end. In the DRC and Mozambique, APS has grown by developing its infrastructure and joint distribution channels, evidenced by month-on-month growth in total starter pack connections.

Prospects for 2009

Subsidiary and associate companies within the International Telecommunications Distribution segment are strategically aligned to consolidating the group’s footprint in certain existing markets and aggressively growing its footprint across two geographic areas.

Africa

Following a period of consolidation, the group expects new pan-African telecommunications operators to emerge within the next 36 months, providing further scope for the group to leverage its strategic relationships and deployment methodologies to grow its African footprint through which to distribute e-tokens.

Latin America

Many Latin American countries don’t currently cater for “super” distribution channels that provide combined access to multi-application distribution solutions and a single source of varied e-tokens. The formation of Blue Label Mexico, in conjunction with experienced local operators, will position the group to rapidly deploy its footprint and distribute e-tokens to the whole region.

In conclusion, increased distribution of the group’s full e-token product and service suite through its growing global footprint is expected to generate additional revenue and profit.