Blue Label Telecoms Results Presentation for the year ended 31 May - PowerPoint PPT Presentation

Blue Label Telecoms Results Presentation for the year ended 31 May 2010 y y

AGENDA • Highlights • International Distribution • Technology gy • Value Added Services • Financial Overview Financial Overview • South African Distribution • Conclusion • Conclusion 2

Group Structure Blue Label Blue Label Blue Label Blue Label Blue Label South Africa International Mobile Technology gy Solutions Activi Technology African Prepaid Cellfind Datacel Blue Label Distribution Services Services (72%) Content Connect The Prepaid APS Nigeria Activi Velociti Africa Africa Company Company (51%) (51%) Mobile Services Transaction CNS Call Centre Crown Cellular Gold Label Company Junction (60%) Blue Label Data Bela Phone Oxigen Services Solutions (81%) Solutions (81%) Company (51%) Company (51%) India (37 22%) India (37.22%) Blue Label Ukash Ventury Procurement (50%) (15.79%) The Postpaid Sharedphone Company (75%) Company (75%) International (50 1%) International (50.1%) Blue Label Mexico (70%) 100% unless otherwise stated 3

4 BLU approved

Global footprint Two strategies for international expansion: Bricks and Mortar & Technology Offerings Technology offering Austria Belgium Benin Canada China Czech Republic Denmark DRC Estonia Finland France Greece Guinea Bissau Haiti Hungary Ireland Italy Latvia Lesotho Liberia Mozambique Netherlands Norway Poland Portugal Russia Rwanda Serra Leone Slovenia Spain Bricks and Mortar Sweden Tanzania Uganda India Ukraine Mexico United Kingdom Nigeria Nigeria Uruguay South Africa Yemen United Kingdom Zimbabwe 5

I t International ti l Distribution Mark Levy Mark Levy Joint CEO 6

International Distribution - Overview • Strategy is to pursue growth by rolling out prepaid products and services d i • Replicating the South African distribution model • Continuing focus on expanding footprint in India, Mexico and Nigeria • India: get well plan bears fruit achieving sustainable EBITDA • Mexico: rollout programme steadily progresses with over 3 500 POS 3,500 POS • Nigeria: extended offering to other networks and dealer relationship strengthened relationship strengthened 7

India India Total connections (March 578 million 2010) % Growth in total connections 49.8% p.a. Prepaid as % of total p 87.1% 87 1% connections Market penetration 49.7% Prepaid ARPU (USD/month) 2.70 Source: Wireless Intelligence 8

Oxigen India - Overview • Over 75 000 POP’s today, accelerating as GPRS- enabled are deployed • Challenging competitive environment • Launched cell phone vending • Developing non-traditional markets and corporate clients • Technical integrations with State Bank of India (SBI), g ( ) ICICI and Corporation Banks • Accessing over 100 million banking and internet customers • Launched Oxicash card and wallet • Joint launch with SBI of kiosk banking targeting about 20 000 Oxigen merchants initially in Delhi and about 20 000 Oxigen merchants, initially in Delhi and Mumbai • SBI approved introduction of Mobile Wallet platform 9 9

Oxigen India – Get Well Plan • Improved revenue, higher margins, consolidation and get well plan contributed to turning EBITDA positive • Share of losses reduced from R26 million to R6 million • Get well plan: - technical availability and other operational improvements tec ca a a ab ty a d ot e ope at o a p o e e ts - changes to distribution structure and margins - introduction of new products and services from non-telco sectors and introduction of new products and services from non telco sectors and introduction of direct top-up (PINless recharge) - facilitating more profitable bill payments system facilitating more profitable bill payments system - cost reductions and operating expenditure contained. 10

Mexico Mexico Total connections (March 2010) 84.1 million % Growth in total connections p.a. 5.9% Prepaid as % of total connections Prepaid as % of total connections 88.62% 88.62% Market penetration 74.9% P Prepaid ARPU (USD/month) id ARPU (USD/ th) 11 40* 11.40* *blended ARPU Source: Wireless Intelligence 11

Blue Label Mexico - Overview • About 3 000 active POS’s at year end, increasing by a net few hundred per month, to 3 500 presently p , p y • Consolidation phase with hiring and refining processes and procedures for expanding channels and broadening offerings broadening offerings • Strategic agreement with WOCCU reaches millions of members of its affiliated credit unions and member micro-finance sites i fi it • Technical integrations into Atio and Alianza • Rolling out cellphone and PC based vending solutions Rolling out cellphone and PC based vending solutions • Introducing bill payments system • Certification obtained to print Pronosticos Lotto vouchers • Springboard into US and Latin American markets 12 12

Nigeria Nigeria Total connections 2010 88,267 million forecast % Growth in total connections 20.68% p.a. Prepaid as % of total p 98% plus 98% l connections Market penetration 57.3% Prepaid ARPU (USD/month) 8 to 14 Source: BMI 13

Africa Prepaid Services - Nigeria • Strengthening dealer and super-dealer relationships relationships • Sole distributor of Multi-Links products nationwide entrenched nationwide entrenched • Multi-Links long-term contract under review with Telkom SA i ith T lk SA • Network distribution agreements with ZAIN GLOBACOM ETISALAT ZAIN, GLOBACOM, ETISALAT, STARCOMMS for direct recharge purchase purchase • Preparing to offer single POS device and bulk printing bulk printing 14 14

15 United Kingdom United Kingdom

Ukash • Ukash vouchers now available in 400 000 locations, 30 countries and on 6 continents, principally UK, Europe, countries and on 6 continents, principally UK, Europe, Australia, North and South America and China • Maintained expansion of issuing sites in new markets, p g , including South Africa • Redemption value growth up 70% annualised as p g p opportunities extended into VOIP and gaming • Acceptance in transient communities p • ‘Re-load’ and ‘re-Power’ strategic agreement concluded with MasterCard • Virtual prepaid card, NEO positively impacted revenue • Improved efficiencies ensuring cost containment’ I d ffi i i i t t i t’ 16 16

17 Value Added Technology Services Services l and h T

Technology highlights • Consolidating and integrating group systems and platforms l tf • Focus on robustness, scalability and skills development on core technology development on core technology • In SA delivered further network integrations, facilitating real time top up of airtime novel electricity facilitating real time top-up of airtime, novel electricity top-up and transport ticketing • EFT transactional volumes increased three-fold • EFT transactional volumes increased three-fold • FNB Lotto integration and delivery through internet banking ATM and Mobile Banking banking, ATM and Mobile Banking • Pick ‘n Pay Lotto integration and delivery through the till points till points EFT up 3x 18

Blue Label Mobile • Consolidation of three divisions - Cellfind - Cellfind - The Mobile Services Company - Content Connect Africa • Focus Foc s - All mobile strategy for the group - All business-to-consumer marketing for group (only South Africa) - All mobile technology for group - All media sales for group - Focus on business-to-business and business-to-business-to-consumer solutions • Benefits - Cost savings in removal of duplicate positions g p p - Cost savings in staff reductions - Reduction in offices from four to two - Integrated solution offering Integrated solution offering 19

mobiWallet, mobiMerchant and mobiSecure • mobiWallet launched - Full-featured mobile wallet F ll f t d bil ll t - Primarily for B2B market - Multiple top-up and payment methods methods - Multiple products and services - Money transfer and banking capabilities capabilities - Multi-channel access (Java, WAP, USSD, www) • mobiMerchant launched mobiMerchant launched - Mobile-based merchant solutions • mobiSecure launched - End-to-end security for E d t d it f mobiWallet and mobiMerchant • All services driven off Blue Label Mobile’s integrated services Mobile s integrated services platform 20

Location Services, WASP and CCA • Continues to deliver annuity income through Vodacom and MTN LBS and WASP aggregation businesses • Good performance in spite of tough trading conditions • MI-International Look4Me license extended to cover North America, Asia, Middle East and Argentina • JV with Symantec – mobile antivirus protection service – a world first for Symantec • Newer traffic and music services showing steady increases in consumption • Expansion of B2B relationships with corporate customers 21