Blue Label Telecoms Limited

Our business is the virtual distribution of secure electronic tokens of value across a global footprint of touch points:

• We distribute prepaid airtime, starter packs, data and electricity tokens, as well as transactional services such as ticketing and financial services
• Prepaid or “pay-as-you-go” or capped consumption are a convenient method of payment
• Prepaid is a lifestyle enabler
• Multiple products and services are distributed through a single interface
• Convergence of all suppliers under one virtual roof
• Neutral aggregation and intelligent switch capabilities to enable these transactions

The Group’s stated strategy is to extend its global footprint of touch points, both organically and acquisitively, in fulfilling the significant demand for the delivery of multiple prepaid products and services through a single distributor, across various delivery mechanisms and via numerous merchants or vendors.

The prepaid model is empowering

The cornerstone of our businesses is new groupings of consumers and our distribution of products and services to them.

Within emerging and developing economies, the supply of products and services via prepaid channels is an increasingly important distribution model. This is because the distribution of physical product is often logistically difficult, a significant portion of consumers in these markets are unbanked or badly banked or in rural areas and therefore transact in cash, while many do not qualify for purchasing on credit. Given these limitations, prepaid cash consumers are now able to demand equal treatment and can access first-world products and services. Blue Label is able to enhance the consumer’s ability to transact conveniently, affordably and with greater accessibility and choice.

Prepaid is a convenient method of payment for consumers, who are now able to purchase Blue Label’s products anywhere, anytime. Prepaid provides for forced discipline in budgeting, ensuring no surprises at month-end, as may be the case in the postpaid world. The budgeting and convenience that prepaid offers now extends to all classes of the economic pyramid, particularly evidenced in transport ticketing.

Economic slowdowns have seen many postpaid consumers migrate towards prepaid in order to enhance their financial flexibility and control spend. In general, prepaid consumers are purchasing airtime in lower denominations, while also benefiting from price reductions and variable call discounts introduced by the major mobile network operators.

A development in the prepaid space is a “hybrid contract”, which is a postpaid contract with a specified limit, and when that is exhausted, it is immediately sequenced by a prepaid top-up for the same products or services.

A key to distribution in emerging markets is to make products and services available as a prepaid offering as an alternative to postpaid.

Our three income streams:

• Interest income: The Group’s high volumes, coupled with its favourable trading terms, generate significant cash from operating activities. Interest is earned on cash balances.
• Annuity income: On distribution and successful activation of starter packs, the Group earns a rebate or activation bonus. Ongoing annuity revenue is earned on topping up for the life of each starter pack. A number of affinity programmes mitigate churn in the starter pack base. Annuity revenues are earned from subscription-based businesses, where customer retention is a key focus. Launching additional products and services to new and existing subscriber bases enhances annuity revenue.
• Sales of commodities, products and/or services: The Group distributes virtual and physical prepaid airtime on behalf of the mobile network operators, as well as electricity tokens on behalf of the utilities.

Our distribution system can be compared to a virtual railroad delivering prepaid goods

Our business is about the distribution of secure electronic tokens of value and services. If a product can be digitised, it can be distributed by us.

As distribution plays an important role in the economy, our leverage of the last mile of the distribution channel is critical. Whoever manages the last mile of the channel actually owns the whole distribution channel. Since the POS terminal is always located in the last mile, the person managing it decides what products and services may be sold from it.