In allocating our capital to our strategic levers among the various value drivers, we need to consider the trade-offs between the resources available to us. The <IR> Framework categorises these resources into six capitals that are affected or transformed by the activities and outputs of an organisation. All our decisions seek to maximise positive outcomes and mitigate negative impacts.
OUR RESOURCES
Financial capital
The pool of funds available to Blue Label.
Manufactured capital
Physical objects and infrastructure that are available to Blue Label to use for the distribution of goods and services.
Intellectual capital
The knowledge-based intangibles that sustain the quality of our product and service offering, which provides Blue Label’s competitive advantage. These include our innovations, collective knowledge and systems.
Human capital
The competencies, capabilities and experience of our employees and how they innovate, collaborate and align with Blue Label’s objectives.
Social and relationship capital
The strength/efficacy of our relations with various stakeholder groups and networks, as well as our brand and reputation, and our social licence to operate.
Natural capital
Any natural resources or environmental assets, which provide a flow of useful goods and/or services, now and in the future.
OPERATING INPUTS
Property plant and equipment to the value of R224 million, including:
OUR PRODUCTS AND SERVICES
Blue Labels diverse product and service offering enables us to bring mainstream products and services to the mass market. Presented below are Blue Label’s various divisions. (Entities are wholly owned by Blue Label, unless otherwise indicated.)
Blue Label Distribution: BLD are specialists in prepaid products and the electronic distribution of virtual merchandise across South Africa, through extensive distribution channels. These encompass, but are not limited to, banks, retailers, spaza shops and other informal traders, as well as petroleum forecourts.
Blue Label Connect (Pty) Ltd: BLC distributes tailor-made hybrid top-up airtime and data contracts on behalf of all major South African cellular network operators.
Ticketpro: Ticketpro allows our customers access to exclusive transport services, travel services, sporting events, and entertainment.
Comm Equipment Company: CEC has evolved from a specialised lender to a fully operational business unit with esponsibilities that range across the Cell C postpaid offerings.
BluAdvance: Allows qualified customers the chance to take out a prepaid electricity advance on their meter, with the ability to pay it back at a later stage.
bluNOVA: Blu Nova has become one of the leading practitioners of data and decision science in South Africa. We have deployed a state-of-the-art decision engine that supplies intelligent data leads and assists in securing new business.
AltBureau: is a data bureau based on API marketplace technology and serves as a platform to provide services to both external and internal clients.
Blue Label One: Engaged in media advertising.
T3 Telecoms SA (50% shareholding): A mobile value-added services and product distribution company.
The Prepaid Company: The leading distributor of prepaid products for all the major SA network operators, with trusted proprietary technology that guarantees purchasing efficiency and sound inventory control with an emphasis on mutually beneficial terms. The business provides wholesale and community sales, starter packs, handsets, tablets, and bulk printing vouchers.
Glocell Distribution: Glocell Distribution’s core strategy is in the distribution of starter packs through its established channels.
Robtronics Service Solutions: (51% shareholding) Robtronics Service Solutions specialises in handset repairs and reverse logistics supporting the repair process.
GloCell Retail Solutions: GCRS is a distributor of all prepaid network operator products, prepaid products and value-added services to retail, which include national retailers and petroleum forecourts.
Mobile Macs (50% shareholding): Provides the most costeffective full maintenance scooter rental model available in the South African market through the supply of data, airtime and electricity products.
Cell C (49.53% shareholding): Cell C Limited operates as a mobile operator in South Africa.
Blue Label Data Solutions (81% shareholding):BLDS is one of the market leaders in consumer data, big data, validation, verification, cleansing of data and lead generation.
iTalk Holdings (40.5% shareholding): Contact centre management, IP telephony products, connectivity solutions, lead warming, VAS product sales, system integration and consultancy.
iTalk Financial Services (30.38% shareholding):Contact centre management, IP telephony products, connectivity solutions, software development, system integrationand consultancy.
iTalk2U (40.5% shareholding): iTalk2U is a safe and secure web-based application that was developed during the COVID-19 pandemic, where working remotely was becoming more “normal”. It is a decentralised sales platform that allows people to make sales and earn a commission while working remotely. The vision is to combat unemployment by educating and uplifting South Africans by providing a workfrom- home employment opportunity.
Blue Label Communications (57.26% shareholding):Blue Label Communications offers three business verticals, namely reverse data billing, SMS, and voice.
Blu Train Group (64.68% shareholding): Blu Train Group provides unfunded learnerships, training, recruitment, and payroll requirements.
One World Telecoms: Engages in VAS product sales and contact centre sales.
Transaction Junction (60% shareholding): A businessenablement transaction platform that delivers digital payment solutions suit the needs of businesses across diverse markets.
LIPA Payments (36% shareholding): Payment software solution for banks and fintechs that allows small merchants to perform digital transactions NFC and Bluetooth technology.
Cigicell (74% shareholding):Cigicell partners with municipalities to grow their revenue while providing prepaid electricity and water services.
Utilities World (25.1% shareholding): The core focus of Utilities World is the design of prepayment revenue management software. The business also oversees the design, manufacture and installation of prepaid electricity meters. The systems they develop have been in use for a number of years by local municipalities, both in South Africa and internationally.
VISUAL Revenue Management (55.5% shareholding): key player and strategic partner in the municipal space of South Africa. The immediate focus of VRM is revenue management, spatial data solutions, infrastructure.
ReWare: ReWare is a provider of smart meters that record actual electricity consumption assisting in monitoring, verifying and managing consumption.
iCrypto (14.29% shareholding):iCrypto enables organisations to eliminate cyber risks such as identity theft, access breaches, data breaches and ransom attacks, while enforcing compliance through technology-leveraging biometrics and tokenised identity.
Mobii (29.9% shareholding): Mobii Systems Group provides match game analytics and Internet of Things (IoT) enabled products.
OUR RESOURCES
OPERATING OUTPUTS
OUTCOMES AND RESOURCE TRADE OFFS
Financial Capital
We leverage financial capital to invest in our business and to grow our competitive market position. This has a positive impact on the human, intellectual, and social and relationship capitals. We create jobs, support the growth of small businesses, and relentlessly drive financial inclusion for the mass market.
There is an important trade-off between short and long-term investment associated with financial capital. It is important to balance the interest of short-term benefits with those of long-term sustainable growth objectives. While both are important for different stakeholders at different times, it is a key focus in our strategic decision-making process.
Manufactured Capital
By investing in equipment, outlets and distribution capacity, we increase our manufactured capital, but negatively impact natural capital and, in the short term, financial capital.
Automation of routine tasks through technology may in the long term reduce human capital.
Intellectual Capital
Our technical innovation and entrepreneurial drive are central to effectively serving the unbanked market segment.
Improved investment in business processes and new systems is growing our intellectual capital and indirectly benefiting our human, and social and relationship capitals, but negatively impacting financial capital in the short term.
Human capital
Our appeal as an employer of choice, our brand value and the fact that we recruit and attain the most innovative and skilled increase our intellectual capital.
Social and relationship capital
Trusted, long-term partnerships with customers. Stakeholder-related investments reduce our financial capital in the short term but positively impact our social and relationship capital. Over the longer term, this enables us to have a community of stakeholders that are loyal and supportive to our brand and provide our social licence to operate.
Natural capital
With the rise in the cost of natural resources, along with business expansions and new ventures, there has been an increase in the cost and usage of electricity, water, and fuel. Efforts to transition to a paperless environment yielded a significant decrease in paper consumption. The extensive load shedding experienced in FY23 has caused a notable upsurge in diesel usage for generators and a corresponding low annual increase in electricity consumption.
| 2023 | 2022 | ||||||
| R’000 | Usage | R’000 | Usage | % increase/ (decrease) in spend |
% increase/ (decrease) R’000 Usage R’000 Usage in usage |
||
| Electricity (kWh) | 4 199 | 2 176 072 | 3 575 | 2 026 636 | 17% | 7% | |
| Water (KL) | 598 | 12 324 | 463 | 9 927 | 29% | 24% | |
| Petrol (L) | 14 808 | 636 063 | 10 042 | 484 921 | 47% | 31% | |
| Diesel (L) | 2 731 | 107 916 | 1 696 | 85 325 | 61% | 26% | |
| Paper (kg) | 216 | 7 970 | 183 | 8 614 | 18% | (7%) | |
Includes subsidiary operations.
While certain business activities impact our natural capital (for example, use of fossil fuels and related emissions), these positively impact the human, social and relationship, and financial capitals.
We are aware of the environmental impacts of our operations and activities and focus on the responsible use of resources. Blue Label views digital products and services as having significant potential to deliver positive environmental outcomes.
| * | Excluding costs relating to the subscription income sharing arrangement and subscriber acquisition costs (refer to note 4.2 of Blue Label annual financial statements). |
Blue Label Telecoms Integrated Annual Report 2023
