AFRI AFRI ICA P ICA P PREPA PREPA AID S AID S SERVI SERVI ICES ICES NIGE NIGE ERIA ERIA Secure Bulk Printing POS Terminals &
ERIA Trends | Rising African Consumer | g NIGE • Brand conscious • Price sensitive...extremely ICES • Not loyal – switches quickly • Love promotions and giveaways Love promotions and giveaways SERVI • Increasingly connected...cellular & Internet • Increasingly urban AID S • M More educated and aware, some with international d d d i h i i l qualifications • Very entrepreneurial PREPA • More discretionary spending power but selective • Spends on communications before Coca Cola • • Most are young (below the age of 35) Most are young (below the age of 35) ICA P • Increasingly speak and read English – financial services AFRI 2
DON ‐ P COMMUNICATIONS ERIA NIGE ICES SERVI AID S PREPA ICA P The leader in Abuja regarding branded outlets as well as The leader in Abuja regarding branded outlets as well as Th l Th l d d i Ab j i Ab j di di b b d d d d tl t tl t ll ll AFRI distribution channels distribution channels
ERIA Context | Snapshot of Nigeria | p g NIGE • Population (millions): 151.3 (largest in Africa) p ( ) ( g ) ICES • GNI per capita ($): 1,160 • GDP ($ billions): 212.1 ($ ) SERVI • GDP growth (%): 5.3 • South Africa’s and Nigeria’s Sout ca s a d ge a s AID S GDP in nominal prices comprises over 50% of PREPA SSA’s GDP ICA P Source: World Bank African Development Indicators 2010 AFRI 4
ERIA Context| Banking Profile of Nigerian Adults NIGE • Bank penetration is relatively low • 85% of adult females are unbanked ICES • 86% of rural population are currently 21% unbanked • Only 21% of the adult population has a Currently bank account, which is equivalent to bank account, which is equivalent to Banked a ed SERVI 22 million people • 74% of the adult population have never been banked, which is 5% Previously equivalent to approximately 64 million q pp y Banked Banked AID S people • About 4 million other adults are previously banked, in other words, have left the banking system Never PREPA Banked 74% Banked definition: currently have any of these: ATM card debit card value currently have any of these: ATM card, debit card, value ICA P card, credit card, savings account, current account, fixed deposit account, mortgage loan, overdraft, Islamic loan or Islamic financing investment. Source: Enhancing Financial Innovation and Access AFRI 5
ERIA Context| Why the unbanked are unbanked! | y NIGE • Traditional commercial banking as we know it is operated on ‘high margin low ICES volume commercial template’ • There is a disconnect between classic banks and lower income customers. SERVI B tt Bottom of the Pyramid customers do not want the services offered by banks. f th P id t d t t th i ff d b b k and typically do not buy the services offered by the existing banks while banks presume that they are not very profitable to service AID S • The documentation hurdles set by regulators and the banks are typically too high for customers at the bottom of the pyramid to scale; PREPA • Lack of complex systems to handle high volumes of transactions (with very high levels of availability) and bespoke business processes which are uncommon to traditional banking principles uncommon to traditional banking principles ICA P • Inadequate financial services infrastructure and limited customer touch points AFRI 6
ERIA Context | Telecoms in Nigeria | g NIGE ICES SERVI AID S Total connections 2010 forecast 88,267 million % Growth in total connections p.a. 20.68% PREPA Prepaid as % of total connections 98% plus Market penetration 57.3% ICA P Prepaid ARPU (USD/month) 8 to 14 Source: BMI ‐ T AFRI 7
ERIA Context | Active GSM lines in Nigeria | g NIGE 80 74.07 ICES 70 65.53 Mobile subscriber base (millions) 60 55 55 SERVI 50 40 40 40 AID S 30 30 25 PREPA 20 20 10 ICA P 0 2005 2006 2007 2008 2009 Aug ‐ 10 Source: BMI ‐ T Total active lines (GSM + CDMA + fixed lines): 80 69 Total active lines (GSM + CDMA + fixed lines): 80.69 AFRI 8
ERIA APSN | Overview | NIGE • Started trading May 2009 • Subsidiary of JSE ‐ listed Blue Label Telecoms ICES – Necessary financial backing as well as wealth of experience in distribution of prepaid products and transactional services transactional ser ices SERVI • Initial focus on the sourcing and supply of Telco products and services AID S • Moving beyond: sale and support of multiple b d l d f l l carriers and the introduction of value ‐ added services PREPA – Strengthening dealer and super ‐ dealer relationships h l l l h – Network agreements with AIRTEL, GLOBACOM, ETISALAT, and STARCOMMS for direct recharge purchase purchase ICA P – Prepare to offer single POS device and bulk printing AFRI 9
ERIA APSN | 2010 and next steps | p NIGE • November 2010, APSN announced cancellation of distribution agreement with Multi ‐ Links and claims ICES for damages • Procedure: • Procedure: SERVI – Quantifying claim – Arbitration process Arbitration process AID S – Jurisdiction in South Africa • Right ‐ sizing operations in Nigeria PREPA • Overall strategy for Nigeria continues – Expand existing footprint by growing the distribution of virtual, prepaid products, in partnership with Nigerian i t l id d t i t hi ith Ni i ICA P network operators and utility providers AFRI 10
ERIA APNS | Key focus areas | y NIGE • One device, multiple , p • EVDO ICES networks, multiple products, Value one investment • Mass market recharge Proposition ‐ • Virtual distribution • Virtual secure vending Dealers • Bulk printing via bulk mailer Bulk printing via bulk mailer SERVI • Leverage Group technology • Leverage Group technology, devices and terminals AID S Key Drivers Market Operators Penetration PREPA • Introduce Virtual Distribution • All operators • Low cost terminals from US$100 New product • National Vending and • Mobile Merchant Mobile Merchant ICA P Technology • Pilot phase end Dec – • Device market early stages Platforms rollout Jan 2011 compared to other countries AFRI 11
ERIA APSN | Distribution Footprint | p NIGE ICES Extensive national footprint SERVI APSN has an extensive nation ‐ wide footprint, which enables the distribution of products and services AID S to outlying areas. PREPA Blu Approved devices and service Blu Approved devices and service agents have been deployed across the country to ensure intensive market penetration p ICA P AFRI 12
ERIA APSN | Detail distribution footprint | p NIGE An illustration of dealers and sub ‐ dealers across Nigeria An illustration of dealers and sub ‐ dealers across Nigeria ICES Points of distribution SERVI 44 152 93 AID S North 38 PREPA North Central North Central 122 South East South West ICA P South 2010 AFRI 13
ERIA APSN | Networks and Partners | NIGE Network Network Partners Partners ICES SERVI AID S 350 dealers nationwide PREPA ICA P AFRI 14
ERIA APSN | Products and Services | NIGE ICES Secure POS Solution Eezzee Recharge Secure Bulk Printing • Electricity • Airtime • Electricity SERVI • Airtime • Credit Transfer • Airtime • Bus Tickets • Bus Tickets • DSTV • DSTV AID S • Internet • Internet • • Virtual money Virtual money PREPA • • W t Water W t Water ICA P AFRI 15
ERIA APSN | Secure POS M ‐ Payment solution | y NIGE • User friendly ICES • Manual and automated ordering menus • Excellent shift and stock controls SERVI • High margins h • Multiple levels of security access, sales analysis and reporting functionality AID S • Automated reporting systems • Web ‐ interface for management report PREPA • Not limited to high turnover stores N t li it d t hi h t t • Efficient and secure transaction processing • Multiple different POS terminal devices can incorporated ICA P our software and be integrated to our system AFRI 16
ERIA APSN | Eezzee Recharge | g NIGE • Print and vend airtime...Anywhere, Anytime ICES • Light and compact • Display sold PIN either: SERVI • On the mobile unit h b l • Print on thermal printer • SMS to client AID S • No stock kept on mobile unit • Sell all denominations of all networks PREPA • Can utilise the mobile unit for normal calls and SMS ICA P AFRI 17
ERIA APSN | Secure bulk printing solution | p g NIGE APSN bulk printing helps overcome: p g p ICES • Complicated logistics • Difficult distribution strategies SERVI • Expensive distribution • High ‐ risk distribution methods • Expensive production costs Expensive production costs AID S • Financial risk and fraud to the cellular service provider and the merchant PREPA • Time delays and late deliveries of prepaid voucher stock i d l d l d li i f id h k • High stockholding shrinkage ICA P AFRI 18
ERIA APSN | Multi ‐ tier software | NIGE ICES SERVI APSN Virtual Warehouse AID S Selected Super Dealer Networks PREPA Selected dealer networks or vendors ICA P Street Merchants AFRI End User
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