Blue Label Telecoms Blue Label Telecoms Final Results Presentation for the year ended 31 May 2009 y y
AGENDA • Strategic Overview • International Distribution • Technology gy • Value Added Services • Financial Overview Financial Overview • South African Distribution • Way Forward Way Forward
3 Strategic Overview Mark Levy Mark Levy Joint CEO
Group Structure South African Distribution International Distribution Technology Value Added Services The Prepaid Company Gold Label Activi Technology Services Datacel Oxigen Services India - Transaction Junction - Crown Cellular Crown Cellular Cellfind Cellfind 37.22% 60% Ventury Activi Deployment Services Content Connect Africa Ukash – 16.9% Blue Label One Blue Label One Matragon APS - 72% t/a Mobile Services Company (MSC) APS DRC - 90% Kwikpay Virtual Voucher APS MOZAMBIQUE - 80% APS NIGERIA - 51% Blue Label Mexico - 70% Sharedphone 50.1% Blue Label Australasia 50.5% • 100% unless otherwise stated 4
The Telecoms Landscape • Emerging markets have continued to grow, g g g , posting growth figures in the single digits instead of double-digit expansion • In South Africa Prepaid ARPU is stable In South Africa, Prepaid ARPU is stable • In the less evolved markets consumer expenditure is also largely stable or dropping only slightly dropping only slightly • Total mobile subscribers or SIMs in the local market are expected to reach 56 million by the end of 2009 • Mobile penetration expected to increase from 122% to over 150% by 2013 y • South African cellular market surpassed the 50-million connections milestone at the end of 2008 although only 68% of these of 2008, although only 68% of these represented individual users Source: (1) Creamer Media’s Engineering News Online; 31 July 2009; “SA cellular market exceeds 50 million connections mark (2) IDC EMCA Telecoms Services Dababase, Q1 2009 5
Global footprint Bricks & mortar Technology offerings • Af h Afghanistan i t • Bangladesh • Benin • Botswana • Cyprus • Czech Republic • France United • Germany • Ghana Kingdom Kingdom • Guinea Bissau • Greece • Haiti • Indonesia • Ireland • Israel • Italy • Ivory Coast • Lesotho • Liberia • • Middle East Region Middle East Region I di India • Netherlands • Pakistan Mexico • Poland • Russia Nigeria • Rwanda • Sierra Leone DRC • Spain • Sudan • Swaziland • S Sweden d • Syria • Tanzania • Togo Mozambique Australia • Uganda • USA South Africa • Yemen • Zimbabwe Two strategies for international expansion: - Bricks and Mortar - Technology Offerings BLT is focused on servicing the unbanked and badly banked market by providing access to cost effective transactional services 6
International Distribution Mark Levy Mark Levy Joint CEO 7
International Operations overview • Enhance all technology offerings • Continue to focus on growth of footprint • Continue to focus on growth of footprint • Introduce to existing markets all Blue Label Telecoms’ products and services • Providing additional tokens of value • Providing additional tokens of value, enhancing each country’s service offering and revenue streams • Improved melded margin 8
I di India Total connections 430,290,998 % Growth in total connections p.a. 48.48% Prepaid as % of total connections 85.14% Market penetration 30.34% Prepaid ARPU (USD/month) 4.50 9
Consolidation of Oxigen India • Proactive reduction in operating costs and cost management • Revision of sales and revenue-generation strategies through: - Rejuvenation, recovery and re-deployment of POS devices - Higher rate of integration into retail - Additional POS devices due to improved technical competence - Direct Top-Up comprising 70% of prepaid recharge market - Further expansion of product offering – in addition to airtime, rail, and toll • Consolidation of technology solution and competencies including: - Backend management and maintenance - Hardware enhancements with increased capacity and capabilities - Improved communications connectivity and reliability 10
Oxigen India • Consolidation of the retail base • Consolidation of the retail base - Selling base increased during the period - Average sale per store increased Average sale per store increased - Selling Web vending sites and average sales per site doubled during the period • Airtime sales growth - Sales Revenues grew consistently • Oxicash - Steady growth with a total in excess of 1.1 million wallets by the end of May 2009 11
Oxigen India – Breakthrough Initiatives state bank of india • PINless top-up of airtime and Oxicash on mobile to consumer • Integration complete and live beta testing commenced nokia nokia – ovi store ovi store • Oxicash is the exclusive mobile transactional partner for all Nokia products • Fulfill Nokia Extended Warranty • Oxigen for airtime sales through all Nokia branches bank switch • mCheck – integrated and deployed for Oxigen and subsequent Oxicash integration • Obopay – integration has commenced new cdma pos terminal roll-out • Improve connectivity, contain communications costs and reduce barrier to entry for new POS sites 12
M Mexico i Total connections 87,079,422 % Growth in total connections p.a. p 13.47% Prepaid as % of total connections 88.62% Market penetration 70.46% Prepaid ARPU (USD/month) Prepaid ARPU (USD/month) 8.31 8.31 13
Blue Label Mexico • Localisation, customisation and , enhancements to the Blue Label AEON platform saw launch and commencement of trading in May 2009 trading in May 2009 • Enhanced technology provides PINless recharge on a real-time basis h l ti b i • Public Telephony launch in conjunction with p y j Telefonica, utilising our Sharedphone product and service, commenced in 2009 with a pilot of 2,000 units through to with a pilot of 2,000 units through to September 14
Blue Label Mexico • Several Agreements for electronic airtime g distribution technology signed with the distribution channels involving: - POS implementation - Multiple channel retail outlet integration - Petroleum forecourts f - Convenience outlets - Micro-finance companies Mi fi i • Provides BLM with in excess of 7,500 points of presence of presence • Since the roll-out of POS, the average sales transactional value per site has increased p per site per month 15
16 Kingdom United d Ki
Ukash • Consumer ability to Cash In, elect to y , transact online or in a mobile environment, and to Cash Out at their convenience • The business model of Ukash and its ease The business model of Ukash and its ease of integration to third party devices and technology provides for rapid deployment and broad coverage based on the existing and broad coverage based on the existing retail presence of the third party • Points of presence have grown – giving Ukash more issuing real estate in Europe Uk h i i l t t i E and abroad as follows: - Continued growth in Europe - Remained consistent in the USA R i d i t t i th USA - Launched in South Africa through BLT channels, Pick ‘n Pay - Recently launched in Australia R tl l h d i A t li 17
Ukash status • Points of Sale network continues to increase through 7 new markets • Payment Service providers are now providing P t S i id idi expansion of Merchant acceptance • Physical outlets expanded in Portugal, Italy Physical outlets expanded in Portugal, Italy Germany, France, Belgium, Slovenia, Poland and Australia • Growth continues per annum • MasterCard selected Ukash for Europe for re- Power Power • AUTP selected Ukash for cash payment for airline industry • Spain – issuance of Ukash through ATM 18
Ukash – Successes over last 6 months • Live in - Portugal, Italy, Slovenia and Australia • On-line issue On line issue - Buying Ukash online through bank account • Skype Skype - Extended Ukash offering in Russia and Ukraine • Key payment • Service provider in South Africa 19
20 African Prepaid Services
Africa Prepaid Services Nigeria Democratic Republic of Congo Mozambique 21
Africa Prepaid Services (“APS”) group • APS SA is responsible for implementation of our African expansion initiative • APS concluded an agreement with Multilinks-Telkom for Nigeria • Set up in Nigeria necessitated employment of skilled and experienced staff subsequently transferred across to q y Nigeria 22
Africa Prepaid Services M Mozambique bi Total connections Total connections 6 245 965 6,245,965 % Growth in total connections p.a. 24.70% Prepaid as % of total connections 98.49% Market penetration 25.71% Prepaid ARPU (USD/month) 3.60 23
Africa Prepaid Services mozambique • Expansion programme launched and commencing through: - Increase in cash generating assets - Additional 5 new branches became fully operational in more rural areas as per ti l i l Vodacom • Started showing monthly improvement with • Started showing monthly improvement with the upward trend expected to continue in growth and profitability • Awarded “Best Distributor of the Year” by Vodacom for the third consecutive year 24
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