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Operational overview

South Africa
This segment distributes prepaid products and transactional services to the South African wholesale and retail markets. Products include prepaid airtime, starter packs and prepaid electricity. The segment contributes some 99% to Group revenue.


As the leading distributor of prepaid airtime and prepaid electricity in South Africa and with a growing suite of products and services, this segment is well positioned to supply its customers  with  such  products.  Distribution capabilities range from the independent shops, forecourts and rural customers through to the multi-channel retail chains.

Critical to growth is the expansion of supply to the targeted rural and urban market, aligned to the Group strategy of managing “the last mile” of the distribution channel. Each is aimed at deepening penetration in their respective markets. Services to rural areas are via a fleet of trucks and accompanying foot soldiers, whilst distribution to urban merchants is expedited through the Group’s proprietary technology. In respect of retailers, the Group manages the front-end of their businesses, thereby ensuring that the full suite of Blue Label products and services is available to consumers at these outlets.

The trend in consumers buying “direct top-ups” or “PINless top-ups”, as an alternative mechanism for prepaid airtime, continues to escalate.

Blue Label’s widespread network of point-of- sale presence enables it to reach out to consumers every day and everywhere across South Africa.

Prepaid airtime and starter packs

Prepaid  airtime  and  starter  pack  sales continue to generate the majority of this segment’s  profitability.

Starter  packs  catering  for  pregnant  women, insurance cover for accidental death and funeral plans, and those linked to events such as the Justin Bieber concert tour of South Africa are examples of the differentiators between TPC and traditional distributors of prepaid  airtime.

During the year, when opportunities availed themselves, bulk purchase transactions were concluded with the networks at favourable discount  rates. The  positive  cash resources of the Group facilitated these transactions against a forfeiture of interest received lower than the discounts afforded on these transactions. A post paid contract base and prepaid airtime bases were acquired during the year, for a total of R264 million. Transactions of this nature afford this segment compounded annuity going forward.

Two new types of low-cost POS terminals, aimed at serving rural merchants, were recently launched to market. These are branded as “business in a box” and “Rechaja Mo”, an ethnic translation for “recharge here”. Both devices were developed for merchants and vendors at the bottom of the economic pyramid, ensuring a reach beyond the target market for the sale of prepaid products and services. The  retail strategy is to escalate supply of products to potentially 1 000 kiosks, in pursuit of managing “the last mile” of the distribution channel.

Another innovation introduced this year was “variable denominational airtime top-up”, which offers a customer the quick and simple choice of utilising the spare change on a transaction to purchasing airtime to that value.

The importance of a targeted approach is that starter packs are distributed to market in a strategic manner, which maximises activation and in turn the resultant annuity revenue stream thereon.

Prepaid airtime – revenue
growth (millions)
Prepaid electricity – revenue
growth (millions)
Revenue comprises sales of physical and virtual prepaid airtime as well as compounded annuity generated from starter packs.   Revenue on behalf of the utilities, with the month of June 2013 setting a new base exceeding R740 million.

Prepaid electricity

The growth in prepaid electricity commissions earned is once again due to a combination of an  increasing  number  of  distributor  contracts signed with municipalities, increased uptake of prepaid electricity by consumers who are installing  prepaid  residential  meters, widespread usage of the Group’s proprietary UniPIN product, in both on and offline environments, and electrification of new and existing government housing developments.

In respect of the sale of prepaid electricity, the Group acts as an agent and not as a principal. Therefore only commissions earned and not the face value of electricity sales are included in the reported revenue stream. Turnover generated on behalf of the utilities increased from R5.5 billion to R7.2 billion in the current year. The commission thereon equated to R113 million.

Financial services

Progress has been made in identifying specific financial services opportunities in South Africa.

Agreement has been reached with ABSA, a major bank, to provide merchants in the informal retail sector with card-acceptance terminals. In a world-wide first, MasterCard will also support the POS acquiring terminal roll-out destined for areas where banks cannot find value in deploying their own terminals.

Blu Approved

Blu Approved is the Group’s outward visual sign that the Group’s products and services are available at a particular point of presence. Blu Approved also serves as a stamp of approval and authenticity, duly endorsed and acknowledged by Blue Label. All Blu Approved merchants are equipped with in-store Blu Approved devices, as well as other marketing tools, which clearly identifies them to customers.

Other products and services

Also available in South Africa through formal and informal retailers, independents, petroleum forecourts, wholesalers and corporate/banking  sectors  are:

other financial services, such as bill payments, EFT and money transfers;
a range of ticketing products, including all types of events and transport for long-haul bus passengers; and
others, such as NFC, Spinner and Senda Mobile Merchant.

Operating companies and businesses

The following businesses are housed in the South  African  Distribution  segment:

The Prepaid Company (TPC) is the leading distributor of prepaid products for all the major network operators. It also facilitates, manages and maintains the distribution of all virtual products and starter packs. These services are supported by proven proprietary technology that has been developed in-house. This ensures purchasing efficiency, managing the distribution chain and inventory control. Relationships with each of the network operators are key to the success of this business. TPC is the major contributor to Group revenue and profitability, and is responsible for:

supplier agreements and procurement for the Group;
wholesale and community sales;
sales of airtime bulk printing, starter packs and handsets; and
Group treasury.

The Post Paid Company markets cellular network top-up post paid airtime and data contracts with handsets and tablets, as well as death benefit and handset insurance products. Its distribution channels include outbound call centres,  various  banks,  microlenders  and retailers  in  South  Africa.

Blue Label Distribution distributes products through  POS  terminals, integrated  gateways, vending  machines, touch  screens and RICA devices. There  are  eight sales branches across the country situated in Sandton, Cape Town, Durban, Port Elizabeth, Bloemfontein, East London, Nelspruit and Polokwane. Each branch performs the functions of sales, customer service and field support. A 24/7 customer call centre for merchant and UniPIN support, as well as airtime and electricity sales, strengthens their efficient levels of service.

Cigicell distributes virtual prepaid airtime and electricity through a broad network of  channels, including formal and informal retail and electronic banking environments. Cigicell is responsible for managing the numerous distribution contracts with utilities in respect of the distribution of prepaid electricity tokens.

The Technology Business, previously reported as a separate segment, is now housed in the South African Distribution segment, as the bulk of its function and services are interdependent in the distribution of airtime, electricity and starter packs.

Through proprietary AEON and AMS systems, as well as the banking grade Postilion platform, the capability as a neutral aggregator is entrenched in connecting to mobile networks, utilities, banks, retailers and petroleum companies.

In Blue Label’s business environment of significantly increasing transaction volumes, in excess of 400 million transactions are processed per month, peaking at between
2.5 million and 3 million online transactions in a day. Approximately 80 million bulk print vouchers are distributed per month. Performance and availability across all technology platforms are operating efficiently, with Transaction Junction providing the Group’s EFT capabilities.

During the year enhanced infrastructure critical for the implementation of the Disaster Recovery and Business Continuity Plan was commissioned.

The South African Distribution segment’s contribution to core net profit equated to R571  million.


The strategy for the International Distribution Segment is to pursue growth opportunities for Group and third- party products and services across its global footprint by systematically rolling out points of presence, in replication of the proven South African business model.


Blue Label Mexico

The business in Mexico is based on a number of agreements with key participants in the sales and distribution channels, including the major network operator, Telcel and the world’s largest bakery, Grupo Bimbo, a co-shareholder with Blue Label in BLM.

BLM continues to expand its distribution network across Mexico, which currently touches 60 000 active terminals. Main products on offer include PINless recharge, direct top-up, bill payments and cash collections. It is expected that the current roll-out campaign will reach its targeted objective of 123 000 POS by mid-2014 calendar year.

During the year, efforts were directed to redeploying underperforming POS devices and simultaneously reconfiguring these terminals to facilitate banking and acquiring transactions.

After year-end, agreements were concluded with Banamex, the second-largest commercial bank in Mexico, and Visa, enabling BLM’s terminals to support acquiring debit and credit card transactions in addition to delivering core VAS and airtime sales.

Blue Label’s share of losses for the year amounted to R51 million, congruent with the development stage of this market.


Ukash is the trading name of Smart Voucher Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom as an electronic money institution. Ukash is a Global e-Money Network and an internationally  recognised  e-commerce  cash payment method. Consumers are able to use e-cash vouchers to pay and reload online, in a safe, secure and convenient manner.

Ukash vouchers are available at some 460 000 physical locations in more than 57 countries on six continents.

During the year, Ukash signed a global agreement with MoneyGram for international money transfers, thereby extending its reach to a further 310 000 locations worldwide.
Ukash is proud to have won the Queen’s Award for Enterprise in International Trade for the third year in succession.

Year-on-year the business continued to grow organically, resulting in an increase in revenue by 32% as measured in Sterling. The Group’s share of profit equated to
R7.3 million.

Oxigen Services India

Since inception 10 years ago as a prepaid airtime distributor, Oxigen continues building up a valuable distribution network, including becoming India’s first and largest payment solutions provider. Oxigen’s current retail footprint processes about 30 million transactions per month, principally through kiosk, POS and e-wallet banking.

This year’s  activities have been characterised by Oxigen’s reach into rural India, supported by the launch of OxiShaan, an ATM cum mini-POS device, as well as the upgrading of existing terminals and the deployment of additional field supporters.

For the first time, instant top-up by EFT through a mobile phone became available through 41 major banks, including Axis Bank, Canara Bank, Corporation Bank, ICICI Bank, Punjab National Bank, SBI, United Bank of India and Yes Bank. The business correspondent segment, offering a variety of services from  SBI and Yes Bank through Oxigen’s kiosk retailers, continues to grow exponentially.

Following the historic tie-up with the NPCI, Oxigen’s mobile e-wallet, namely OxiCash, became India’s first non-banked wallet approved by the Reserve Bank of India providing direct connectivity to the national switch of the NPCI. OxiCash enables the unbanked to access instant money payment services from any bank, at any place and at any time.

In terms of the partnership with SBI, Mobicash Easy was launched, for which a bank account is not required. It is the only mobile wallet in India which is telco, device and bank agnostic.

In support of these and other developments in the micro-payments solutions for the unbanked, Oxigen has migrated its systems to a next generation and state-of-the-art transactional platform – branded as “Oxisecure”.

New business opportunities include Oxigen’s retailers acting as banking correspondents for ICICI Bank, the largest private bank in India, issuing Saral Money Prepaid VISA cards in Delhi. As awareness of insurance products is low, Oxigen is now promoting the benefits of cover to its retailers. Extended warranty packs for mobile phones, tablets and laptops are now available.

Blue Label’s share of losses for the year equated to R565 000.

Product diversity

Case study

“The primary driver for the implementation of INECTO Insight was to provide an operational view of our transactional environment that reflected the customer’s experience. This is particularly true when system performance degrades as opposed to complete system failures. INETCO Insight allows us to easily adjust our view and sensitivity to proactively detect the onset of system degradation.” TRANSACTION JUNCTION

The Business Problem

Transaction Junction’s business is divided between electronic funds transfer (EFT) processing and switching, and their value added services (VAS) processing, which includes private label loyalty cards, closed loop credit cards, lotto ticketing, bill payment, prepaid electricity and prepaid mobile air time transactions.

As the VAS side of the business continues to expand, Transaction Junction has put a far greater onus on monitoring the performance and availability of their service suppliers. Revenues accruing from product sales are quickly on the rise for many customers. If a supplier connection fails, it usually results in a direct loss and a very dissatisfied customer. This is why Transaction Junction made the decision to prioritise the following business and technical requirements:

Business requirements

Proactively recognise when operational issues are causing the degradation of customer services
Demonstrate more secure and reliable transaction management services than any other third-party switch provider
Reduce the amount of time, labour and tools involved in system troubleshooting and problem isolation

Technical requirements

Establish a single operational view into the transaction environment that reflects the customer experience – without having to deploy agents, extra traffic loads or code
Continuously monitor and alert on specific elements contained inside the application message
Immediately identify network components or third-party connections that are dropping service or not responding
Bridge the information gap between network information and application performance data
Capture and decode a diverse range of transaction protocols, including XML, ISO 8583, Base 24, AEON and proprietary message formats


The segment provides a complete mobile ecosystem for customers wanting to add mobility to their traditional channels, e.g. smartphone, WAP, JAVA, SMS and USSD.

Mobile’s ecosystem allows for the rapid rollout of mobile-mediated sales, financial services, banking, couponing, loyalty, rewards, ticketing, transport, NFC, media advertising, gaming and location-based services. The  technologies and products developed enable customers to reach their customers, regardless of what type of phone or mobile operator is being used. Core net profit contribution for this segment amounted to R24.8 million. This segment comprises the following operating entities:


Cellfind is the  Group’s WASP, aggregator  and location-based services provider,  predominantly deriving annuity income from location-based services delivered to the major mobile network operators.

Main products offered are aggregation and bulk distribution of SMSs; mobile payslips (miPayslip and miStatement); and LBS (Look4Me, Look4Help, MTN WhereRU, MTN 2MyAid and ER24 IdMe). The partnership alliance with TeleCommunicationSystems, announced earlier in the year, will soon launch LBS products into Africa.

During the year the acquisition of Panacea Mobile, with its enhanced bulk SMS aggregation capabilities and intelligent distribution, was concluded. This segment processes approximately 150 million SMSs per month.

Blue Label Engage and Blue Label One

Blue Label Engage and Blue Label One support customer engagement, loyalty and reward programmes and customer management businesses, often referred to as affinity programmes.

NFC and other contactless technologies bridge the gap between mobile and physical transactional services. Notable this year was the introduction of NFC contactless ticketing for the Loftus Versfeld Stadium in Pretoria. Monitoring the usage of a card enables its user to be rewarded and affords the opportunity of cross-selling and up-selling products and services. In addition, fans are able to join supporter groups, providing them with ticketing, stadium access, concessionary management, partner and programme activations and the like. These ultimately enhance a supporter’s experience.

This year has seen the launch of spectator sport programmes for rugby’s Blue Bulls and Stormers, as well as for Cricket SA. Sponsorship of the Proteas T20 squad, with naming rights, has enabled us access to millions of cricket fans, thousands of whom have joined the “Love Cricket” brand of Cricket SA.

Other programmes on offer are Home Engage – a home warranty product, Motor Engage – a card programme for Club McCarthy and a motor warranty product, as well as Senda mobile merchant. Another development this year has been the Group’s acquisition of a sophisticated ticketing engine, which acts as a neutral supplier of tickets.


Revenue streams from three income pillars


The segment specialises in the marketing of cellular and other products and services through call centres, as well as the provision of data and analytical support services.

This segment houses CNS Call Centre, Velociti Call Centre, Datacision and Blue Label Data Solutions. The latter is accredited by the Direct Marketing Association of South Africa. Core net profit contribution from this segment was R13.2 million.

Data bases continually expand, reaching over 43 million consumers this year. Growth was mainly derived from a consistent focus on products and services related to data and its analytics, such as fraud and debt management solutions (often referred to as forensic intelligence data solutions), automated voice messaging, field lead generation and consumer analytics.

The call centre business remains challenging, which has resulted in a shift in strategy to focus on lower risk telesales and customer care related work.

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