Business model

The appeal of prepaid products
and services:

To consumers:
  • Consumers have an alternative of how to pay for products and services - prepay or as it is sometimes described as "pay-as-you-go".
  • Prepaid products and services are the ultimate budgeting tool, as consumers have absolute choice and control over what they spend.
  • The majority of prepaid transactions are cash based, thereby removing the requirement for credit vetting.
  • Prepaid products and services can be conveniently topped up, either virtually or physically, as and when required by consumers.
  • Prepaid products and services are sold across a broad footprint of traditional and non-traditional outlets.
  • Prepaid products and services enable the world's unbanked and badly banked consumers to purchase first-world products and services in a manner which suits them and allows consumers to transact as and when they wish.
To suppliers
  • Prepaid products and services are cash upfront, thereby guaranteeing payment.
  • Guaranteed payments translate into no need for debtor collections and in turn no bad debts.
To merchants:
  • Blue Label's expanding distribution network covers over
    150 000 devices, from major retail chains to
    registered individuals. We continue to expand
    our footprint across the emerging markets
    of India and Mexico.
  • Blue Label's prepaid products and
    services allow for multiple products
    to be sold from one device, thereby
    enabling merchants to have
    multiple revenue streams utilising
    a relatively small retail space.
  • Prepaid products and services
    are delivered virtually, thereby
    eliminating stock management.
  • Business founded in 2001 by entrepreneurial
    thinkers and commercial implementers.
  • Business model strengthened by restructuring
    and consolidation ahead of listing.
  • Listing in November 2007 raised R1.3 billion.
  • Governance and compliance structure strengthened.
  • Global shift in consumer transactional behaviour: from credit to debit to prepaid terms.
  • High-volume low-margin distribution and sale of e-tokens of value.
  • Leveraging favourable working capital management.
  • Typical market in emerging and developing economies.
  • Target market is world's unbanked and underbanked consumers.
  • Enabling access to prepaid products and services.
  • Strong barriers to entry for competitors include entrenched relationships, vendor lock-up through systems integration, ubiquity of POS and proprietary technologies.
  • Long-term contracts with suppliers.
  • Long-term relationships with participants across seven main distribution channels.
  • Holds approximately 60% of South African prepaid airtime and about 50% of prepaid electricity market.
  • In-house developed and maintained proprietary technology.
  • Monetising existing footprint by offering additional value-added services.
  • Processes over 5 billion transactions per annum
  • CSI programme
  • Creative, youthful and talented
        management team.


Business model strengthened since listing + positive cash generation + robust growth footprint + resilience to fluctuations in economic conditions

  • Cash-generative business
    even during recessionary
  • Trading revenue predominantly from sales of prepaid virtual and physical mobile and data airtime, prepaid electricity, tickets for events, sports and transport, insurance and other financial and value-added transactional services via its wholesale, retail and merchant distribution footprint.
  • Trading and annuity revenue from sale of starter packs, their activation and ongoing utilisation
  • Annuity revenue from subscription-based services.
  • Interest income derived from a combination of high revenue volumes and favourable trading terms.
  • Annual dividend policy.
  • Capital expenditure relates mainly to point-of-sale devices and IT requirements.
  • Licensing of technology as an
alternative to equity investment.
  • Expanding goods and service offerings in
South Africa: prepaid electricity, prepaid water, ticketing,
loyalty programmes, bill payments, debit and credit card acquiring, money transfers.
  • Replicating business model in other emerging markets, as in India and Mexico.
  • Imparting offerings and learnings across global footprint.
  • Established systems and infrastructure through airtime offerings, facilitating the introduction of new products and at relatively nominal incremental costs.
  • Growth prospects, through both organic and by mergers and acquisitions.