welcome to blue label telecoms investor...

Welcome to Blue Label Telecoms – Investor Day

20 October 2010

08h30 – 08h35 Welcome Michael Campbell

08h35-08h50 Corporate Governance Structure (slides 4 – 9) Neil Lazarus

08h50-09h15 Introduction to Blue Label Telecoms (slides 10 – 15) Brett and Mark Levy

09h15-09h45 The Financials (slides 16 – 27) David Rivkind

10h00–10h40 Blue Label South Africa (slides 28 – 54) Bradley Turkington

10h45-11h25 Blue Label International (slides 55 – 82) JJ Botha

11h30-12h00 Technology (slides 83 – 95) Dr Angelo Roussos

12h00-12h45 Blue Label Mobile (slides 96 – 120) Dr David Fraser

12h45 -13h15 Demo Room

14h00-14h30 Blue Label Solutions (slides 121 – 131) John Hawthorne

Agenda

2

Welcome

Michael CampbellInvestor Relations

3

Corporate Governance

Neil Lazarus, SCNon-Executive Director

4

Self Regulation

• Laws are enforced by outside agencies such as government.

• Compliance with governance standards are self-policed and self-regulated.

• The driver for self-regulation is the competitive advantage which isconferred on businesses that create and maintain a culture ofintegrity-driven performance.

• This is because “The ultimate compliance officer is the company’sstakeholders who will let the board know by their continued supportof the company if they accept the departure from a recommendedpractice and the reasons furnished for doing so.” (King III)

5

The Board

• Ethical leadership requires a recognition that a company does not operate in a vacuum and thatits mandate to operate is made possible by a multitude of stakeholders which requires taking intoaccount a balanced approach to stakeholder issues founded upon trust and integrity.

• Blue Label’s board directs, governs and is in effective control of the company.

• The board informs and approves the company’s strategy and satisfies itself that business plansare not encumbered by unexamined risks.

• Directors act in the best interests of the company, inter alia, by disclosing conflicts where theyexist, dealing in securities as allowed by internal policies and by adhering to legal standards ofconduct.

• The board delegates certain of its functions to well structured committees without abdicating itsown responsibilities .

• The board has an appropriate balance of skills and experience within its ranks to fulfill itsmandate.

• Regular performance evaluations are carried out by the board to improve efficiency andeffectiveness and to develop individual directors to enable them to add better value.

6

Risk Management

• Risk assessments are continuously performed, ranked, prioritizedand addressed.

• The board receives assurances regarding the effectiveness of therisk management processes to enable complete, timely andaccessible risk disclosure to stakeholders.

• The board ensures that risk management is not detached from therealities of the company’s business.

• Due to the critical nature of IT to Blue Label’s business, the boardand the risk committee place special emphasis on IT governance.

7

Compliance

• The board assumes responsibility for the company’s compliance withthe law and with non-binding rules, codes and standards with which thecompany has elected to comply and also monitors compliance.

• The board aims to ensure that we do not only consider compliancewhen there is a breach with specific consequences.

• The board recognizes that self-regulation requires comprehensive andwell policed compliance programmes and policies, including:

- Group protocols for investor and media relations;- Market disclosure and communications policy;- Legal compliance protocols.

• The objective is to provide employees with a statement of disclosureobligations as well as a practical guide for the dissemination ofinformation.

8

Stakeholder Governance

• The board recognizes that effective stakeholder engagement isessential to good corporate governance and that the days when boardscould merely pay lip service to concerns such as corporateresponsibility, ethical business practices and sustainability are over.

• Stakeholder relationships provide the platform for the board to take intoaccount the concerns and objectives of the company’s stakeholders inits decision making.

• The board does not want to respond in crisis mode when the companyfalls short of stakeholder expectations.

• The board aims to achieve an integrated and balanced approach todecision making by ensuring that it has sound stakeholder strategiesand policies in place.

• The board recognizes that comprehensive, forward-looking informationis the new benchmark in corporate reporting.

9

Blue Label Telecoms

Brett and Mark LevyJoint CEOs

10

Background

• History• Lifestyle enabler - product to the people• Multiple products and services through a single interface• Convergence of all suppliers under one roof• Neutral aggregator• Leading distributor of prepaid telecoms in SA• Moving money outside of the banking environment• Replicating model outside of SA• Suppliers wanting to deliver more product in prepaid format• Customer wanting to transact more in a prepaid world• Merchant ability to hold more stock as it is virtual• Organic growth company• Acquisitive

11

Group Structure

Blue Label Mobile

Cellfind

Content Connect Africa

Mobile Services Company

Blue Label South Africa

The Prepaid Company

Ventury

Blue Label Distribution

The Postpaid Company (75%)

Crown Cellular

Bela Phone Company (51%)

Blue Label International

African Prepaid Services (72%)

Gold Label

SharedphoneInternational (50.1%)

Blue Label Mexico(70%)

APS Nigeria (51%)

Oxigen Services India (37.22%)

Ukash(15.79%)

Blue Label Technology

Activi Technology Services

Blue Label One

Activi

TransactionJunction (60%)

Blue Label Solutions

Datacel

Blue Label Procurement (50%)

Velociti

Blue Label Data Solutions (81%)

CNS Call Centre

100% unless otherwise stated

12

Nature of Business

• Intelligent switch

• Digitising cash

• Neutral aggregator of products and services enabling open

loop transactions

• Hardware agnostic

• Product and services agnostic

• Scalable, robust and transferable proprietary technology

• Beyond bricks and mortar

• Banking the unbanked – financial inclusion

• Mobile enablement

13

Mobile Devices

BLUE LABEL DISTRIBUTION

POS Terminal Vending Machine Touch Screen

Bulk Voucher

Integrated GatewayKiosk

Natural barriers to entry

14

PRODUCTS / SERVICESBlue Label or Third Party

AirtimeUtilities

(electricity / water)

OTHERInsuranceGift voucher, Loyalty card,

etc

Bill payments /

EFT

Airline tickets, bus

tickets

Wholesale MainRetailers

Independent Retail Kiosks Informal Retail

BLUE LABEL TECHNOLOGY PLATFORM(AEON)

POSTILION

Financial Institutions

Snapshot

• 1,620 employees

• >130,000 POS devices in SA

• >1 million POS devices globally

• Key markets: South Africa, India, Mexico and Nigeria

• Listed on JSE in November 2007

• Over R5 billion market cap

• Free float ~ 45%

• 766 360 894 shares in issue

• Stated strategy:

- 50% profits outside of SA

- 50% profits from non-telephony products

15

The Financials

David RivkindFinancial Director

16

SA Distribution Revenue 2010

By network By product

Vodacom57%

Cell C8%

MTN31%

Telkom4%

Electricity0.2%

Airtime98.2%

Other0.2%

Starter packs1.4%

17

Prepaid Airtime - revenue

R-

R200 000 000

R400 000 000

R600 000 000

R800 000 000

R1 000 000 000

R1 200 000 000

R1 400 000 000

R1 600 000 000

R1 800 000 000

2010 2009

R0

18

Prepaid Electricity – monthly growth

R 0

R 50 000 000

R 100 000 000

R 150 000 000

R 200 000 000

R 250 000 000

* The group does not account for revenue on face value on electricity but only the commission received

19

SA Distribution Revenue 2010

By network By product

Vodacom57%

Cell C8%

MTN31%

Telkom4%

Electricity0.2%

Airtime98.2%

Other0.2%

Starter packs1.4%

20

Revenue

• Blue Label Mexico – 70% equity holding• Africa Prepaid Services Nigeria – 36.72% effective holding• Excludes revenue of associates

• Call Centres- Rationalisation - Impairments- Extraneous costs

• Location based services - 600k subscribers- Annuity driven

• Mobile content

INTERNATIONAL REVENUE – R1.2bn

OTHER RELATED SERVICES – R217m

21

Gross Profit Margins - Pre and Post IFRS adjustments

22

EBITDA

23 23

Interest expense and income

24 24

Working Capital Cycle

Positive cash generated from operating activities

• Average creditor terms – 40 days

• Average debtors terms – 21 days

• Average stock turn – 13 days

25

• Maiden dividend declared in August – 12c per share• Target of 3 to 4 times cover • Acquisitions, capex, working capital requirements and share buy backs

will be taken into consideration

• R80m per year – POS devices• R30m per year – technological development

• Nigeria tax holiday for 5 years• Average tax rate lower than 28% for the group

DIVIDEND POLICY

CAPEX

TAX RATE

26

Network Contracts

27

VodacomCell-CTelkomMTNNeotelVirgin MobileMultilinksZainEtisalatGlobacomStarcomms

27


Bradley TurkingtonBlue Label Distribution, Chief Sales Officer

28

What we do

Retailers

Lotto points

Bank branches,stores, etc.

Filing StationsChain stores

•Bank branches

•Large Retail groups

•Local Retail outlets

•Fuel and Filing stations outlets

•Wholesale outlets

•Moms and Pops , Informal Kiosks

•National Government offices –Post Office

Traditional retail networks have difficulties expanding their coverage and achieving deeper penetration of the pyramid due to operational, technical and economic limitations imposed by traditional business models

General Markets Distribution Segments

130,000’s micro-outlets

29

Unique capabilities that allow us to achieve an unprecedented level of

penetration

What we do, cont.

30

Value proposition

31

The typical consumer

• First world products and services available to emergent and aspirant consumers with flexible payment options

• Convenient, accessible outlets to purchase products and services• Cost effective and trustworthy products and services• Budget conscious – prepaid is that ultimate budgeting tool

Blue Label enables unbanked and under-banked consumers to access first world

products and services, conveniently and pay in a manner that suits their lifestyle

32

Consumer

POS Terminal

Vending Machine

Touch Screen

Integrated Gateway

Bulk Printing

Mobile Phones

Retail Channels

AEON Platform

Blue LabelTechnology

• Airtime

• Electricity

• Money transfer / Remittances

• Bill Payments

• Lotto

• Transport Ticketing

• EFT

• Insurance, funeral cover

• Loyalty / rewards

Product and Services

How we work

33

POS Terminal

Vending Machine

Integrated Gateway

Touch Screen

Mobile PhonesMobibiilelele PP P hhohonenenesss

Bulk Printing

Our vending devices

34

POS Terminal

Vending Machine

Integrated Gateway

Touch Screen


Bulk Printing

Our vending devices

Integrated Gateway

AEON Platform

Integrated to POS softwareeg Arch, Pilot, SA Cash

35

POS Terminal

Vending Machine

Integrated Gateway

Touch Screen

Mobile Phones

Bulk Printing

Our vending devices

Free Standing Vending Machine• Simple and convenient to operate

• Increase sales and reduction in operating costs

• No risk from fraud and theft

• Financial management

•

•

•

•

36

POS Terminal

Vending MachineMobile Phones

Integrated Gateway

Touch Screen Bulk Printing

Mobibiilelele PP P hhohonenenesss

Our vending devices

Touch Screen Terminals• High turnover retailers for fast service• Separate cash box for effective cash management• Product dispensing is fast and easy• Full reporting functionality• Automated stock management and replenishment using GPRS• Web-based management• Staff shift management

37

POS Terminal

Vending Machine

Integrated Gateway

Touch Screen


Bulk Printing

Our vending devices

Point of Sale Dispensing Terminals• Features:• User friendly menu• Excellent shift and stock controls• Multiple levels of security access, sales analysis and reporting functionality• Efficient and secure transaction processing• Benefits:• High margins• Reduced risk of fraud ad pilferage• Continuous availability of vouchers• Maximum return on invested stock• Full audit trails• Accessibility to any voucher denominations• Manual and automated ordering menus• Automated reporting systems

38

POS Terminal

Vending Machine

Integrated Gateway

Touch Screen

Mobile Phones

Bulk Printing

Our vending devices

Mobile Phones• mobiWallet

• Full-featured mobile wallet

• Primarily for B2B market

• Multiple top-up and payment methods

• Multiple products and services

• Money transfer and banking capabilities

• Multi-channel access (Java, WAP, USSD, www)

• mobiMerchant• Mobile-based merchant solutions

• mobiSecure• End-to-end security for mobiWallet

and mobiMerchant

39

POS Terminal

Vending Machine

Integrated Gateway

Touch Screen


Bulk Printing

Our vending devices

Bulk Voucher PrintingConverts virtual vouchers to physical vouchers on the customers premises• Quick real-time deliveries through GPRS connectivity• Downloads 500 vouchers every 2-3 minutes• Prints 1000 vouchers every 15 minutes• Multiple users• Password protected• Data list of customer purchases• Sales reports and printed stock reports• Full accounting documentation• Weekly / monthly sales and purchase reports• Small and compact

40

Product and Service Partners

CCA

City power

41

Mobile Devices



Bulk Voucher


How we work

2010/09/14 42


AirtimeUtilities



etc

Bill payments /

EFT


tickets




POSTILION


Our distribution footprint

43

New Products

• Prepaid Electricity (UniPIN)

44

UniPIN: Process Flow for Electricity Purchase

45

New Products


• Money transfers, such as M-PESA

46

M-PESA

Additional Outlet Tills

and Assistants

Outlet Assistant (Primary)

Outlet Till (Primary)

Outlet Assistant (Primary)

Outlet Till (Primary)

Vodacom M-PESA Head Office

Setup and manage Outlets

Outlet Head Office

Management of Float Accounts and Commissions

Office Terminal

e al

Office AssistantA

OutletInteract

with Vodacom M-PESA

Customers

OutletInteract

with Vodacom M-PESA

Customers

Additional Outlet Tills

and Assistants

AO

A

AO

A

Blue Label

Merchants

Vodacom

47

New Products



• Mid-tier bank products

• Electronic Funds Transfer

• Lotto

• Bill Payments

• PINless

48

Pinless recharge

Billing Engine

PIN confirmation

49

New Products



• Mid-tier bank products


• Lotto

• Bill Payments

• PINless

• Technology solutions – Symantec forsmart phones

2010/09/14 50

Evolution of business model

Platform

Solution Provider

Product distributor

In-house

Third party

Products &services

51

Blue Label Technology - AEON

• Online• Offline

• Consignment• Wholesale

• PIN Generation


52

Growth

• Ongoing expansion of presence

• Electricity

• Transport

• Money transfer

• Mobile merchant

• Mobile applications for retailers / bankers / corporates

2010/09/14

53

Blu Approved – the BLU stamp of approval

For consumers

For retailers

For investors and partners

� Able to purchase airtime, electricity, transport tickets...all the BL offerings

� Service is trustworthy and offered at a competitive rate� Service is easy to use

� Attracts consumers into their store� Supported with marketing from Blue Label and our partners to

increase sales

� Able to SEE the full extent of Blue Label’s distribution footprint

54


JJ BothaGroup Exec: International, Business and

Strategy

55

Market Approach

Raw Country Data

Per country/per service: – refined criteria scores

Core criteria –calculation formulas

Weighting:� Service importance;� Criteria importance; � Actual score per criteria

band level

Per country: aggregate score & ranked (sum of criteria scores)

Per country/per service: criteria scores –placed into ‘score bands’

Distribution• Footprint

Core Products• Vouchering• Couponing• Acquiring• Settlement

Other Products• Mobile content and

VAS• Messaging

56

Current Decision Matrix

Market Known Challenges and Risks

Territory Investment Competitors(Main

Identified)Emerging market player and positioning

Regulation in territory (Major compliance issues, Timelines to implement, ease of currency exchange, Corporate Tax, Employment dependencies)

Competition within Segments

Revenues possible, shape and phasing of revenues

Review of business – age , current strategy, alignment

Size of qualifying market (Population,GDP, outlet topology)

Financial - issues with Organizational requirements

Specific investment coststo enter markets

Current positioning

Size of core segments (airtime, electricity)

Development & Ops – know customizations and localization challenges

Size of CORE target segments

Administrative and Overhead burdens (cost of sales, margins, staffing)

Size and Suitability of existing channelsin market

Macro Risks – economic and Political

“Barriers to entry” /Major Risks

Market specific trends and market maturity with the associated pressures

Territories estimated suitable for other products (mobile content &vas)

Management Burden –partnership model and relationships, time zones

Matrix is weighted and scored – Potential matched to resources57

Country Implementations

Resources,Systems,Process

Matrix review

QUALIFIED TARGET

POPULATIONONLINE FRAUD

FEAR

END-USER ONLINE

ACTIVITY: IMPT. SECTOR

REDEMPTION CHANNEL

ISSUING CHANNEL

Other UKash (Future)

Products: Sales

Potential COMPETITION REGULATIVE FINANCIALDEVELOPMENT

& OPS

TERRITORY's BROAD

ENVIRONMENT RISKS

ADDITIONAL MANAGEMENT

BURDEN

REGION 1: ASIA -6379650Bangladesh -249050 300 100 0 100 500 0 0 125000 0 50000 50050 25000Brunei -246700 300 25000 0 100 500 25000 0 125000 125000 10000 12600 25000Cambodia -349050 300 100 0 100 500 0 0 125000 125000 50000 25050 25000China -161950 87500 100 0 100 50400 25000 0 125000 125000 25000 25050 25000

Example extract

BLT Core • Consideration

of core focus of staffing and systems

BLT International • Operational

management and evaluation

• Market evaluation and re-evaluation of factors

• Product and service enhancements

Putting it all together

58

Our product value propositions

AirtimeOther Products

Remittances, Wallet, Kiosk

Lotto Bill payments Others, mobile VAS

Description Mobile phone and long distance pre-paid airtime

Cross-border remittances (both cash and targeted)

Electronic based lottery

Electronic payments of products and services

Other products and services that leverage BLT network

Value proposition to retailer

Very high• Reduced inventory risks• Virtual shelf• Lower working capital• Door to technology

High• Increased

product offering• Lower

operating costs

High• Products that otherwise can’t sell

• Expanded footprint• Traffic generator • One stop shop

Value proposition to end user

Medium• Enhanced proximity• Receipt• Lower denominations• Instant confirmation

Very high• Control over

spending • Large footprint

on both ends

High• Convenience

• One stop shop• Enhanced security / reliability

• Enhanced control

Target partners

• Telecom players• Pre-paid long distance

resellers• Value-added content

sellers

• Smaller remmitance players

• Key items on share of wallet

• Lotto organizations

• Value storage cards

• Utilities• Pay TV• Government

• Courier companies

• Banks • Web payment

companies• D2C

59

Value add of various business modules

286.8

257.3

660.1

271.6

435.4

1 911.2

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

Mexico airtime Mexico otherproducts

USA airtime USAremittance

LATAM TotalEnterprise

Value

Company valuation

Airtime

By leveraging footprint, device capability and technology platform, significant scalability and enterprise valuation is achieved

Lotto

Other, mobile VAS

Remittances, Wallet and

Kiosk

Bill Payments

Lotto

Value

60

Business Lifecycle plan

ExpandRemittanceWallet , Kiosk

New Products

Other products

Airtime

• Selling airtime in all POS

• Grow own network

• Alliances with other networks to speed deployment

• Expand product offering

• (Electricity, bill payments, lotto, Other prepaid)

• Further expand network with alliances footprint

• Mobile VAS

• Expand footprint to corridors to leverage platform capability

• ISOs

• Migrant population

• Mobile Content

• Leverage BLTs footprint in countries

• Leverage technological edge to offer cross-border products

• Introduce bundled product settlement

• Expand into selected countries with similar strategy

• Opportunistic local partnership driven growth

Ongoing Phase 2 Phase 3 Throughout 2012 +

61

India

62

India

• Highly competitive• Margins under

pressure due to Teleco price wars

• Decreased reliance on airtime

• Expansion of product offering

• Footprint expansion • Target new markets

India: The Market

63

India: Key Pillars Focus

India Market Focus

Area Centric

Market Penetration

New product and

Technology Platforms

Banks

• Achieve Exponential Market• Cover all metros• Increase market presence• Distribution through Verticals • Market reach <1%

• Must have reach in territory 5%

• 2012 – 2013 , Target market share 5%

• Promotion of SMS vending solution in low coverage areas

• Introduce new generation GPRS terminals

• Expand Oxirail accounts• Cash Card

• Access Banks account holders to promote Oxi products.

• Expand BC model to become Cash in and Cash out

64

India: Key Growth Areas

ExpandRemittanceNew Products

Other products

Airtime

• Selling airtime in all POS

• Grow own network through mobile vending

• Bill payments

• Expand with regional small stores and logistics

• Co-operative Banking,

• Mobile wallet solutions

• Mobile Kiosk –State Bank of India. Rural Banking

• Java Client –enables deeper reach than Kiosk

• National ID




• Expand product offering and footprint through out States

65

India: Lifecycle Snap Shot

Mobile Wallet and Kiosk

Other Products, Bill payment

AirtimeFootprint

Lifecycle – Snap shot

66

Mexico

67

Mexico

*blended ARPU Source: Wireless Intelligence

Mexico: Background and Overview

• Formed in June 2008, began trading in March 2009• Joint venture between Blue Label Telecoms and Nadhari, S.A• Installed base of terminals is over 4000• Annualised sales of about US$40 million• Pursuing organic growth by expanding terminal footprint • Footprint expansion strategy through partnerships in which it applies

its network and platform to solve or optimize partner’s operations -partners have significant market presence, which BLM seeks to leverage

• Product portfolio will reach into lottery, bill payment and parcel packaging solutions

• Currently structuring a trial in the USA which will leverage capability of providing cross-border products to a specific niche

68

Mexico: Key Pillars Focus

10 780

8 887

7 831

1 796

1 663

1 400

1 239

1 191

1 000

891

357

3 814

Banking …

Pemex

Oxxo

BBVA

Banamex

Telegraph …

WalMart Group

HSBC

7-Eleven

Elektra

Famsa

BLM Jul-10

BLM Dec-10

BLM Jul-15

7 83

11111111 111111 11111111 1111 111 111111111 77779777779797979797977797777777966

1 663

1 400

1 239

1 191

1 000

889888888888888888 1

357

3 814

DriversMarket

Penetration

• Review Terminal performance

• Footprint

69

Mexico: Key Pillars Focus

Drivers

Quality of Service

Market Penetration

New product and


Banks

• Review call centre support• Coverage and communication

stability• Deposit allocation management• MIS systems

• Review Terminal performance

• Footprint

• Multiple products offered• Increase Bill Payments

offering• Solution sets in non-

traditional verticals (egwaybills)

• Banking co-operative solutions

• Develop mobile wallet, kiosk solution sets

70

Mexico: Key Growth Areas

ExpandRemittanceNew Products

Other products

Airtime

• Selling airtime in POS (network rules being challenged)



• Lottery on POS

• Limited Bill payments

• Roll out in Gasoline stations

• Expand with regional small stores and logistics

• Inventory management and Waybill solutions

• Co-operative Banking,

• Mobile wallet solutions



• Introduce bundled product settlement


• Expand into selected countries with similar strategy in LATAM

Dec 2010 Q 2 2011 Trial phase & investment made

71

Mexico: Lifecycle Snap Shot

RemittanceProducts

CorridorOther Products, Bill payment

AirtimeFootprint


72

Nigeria

73

Nigeria

Source: BMI

APS Nigeria: Background and Overview

• Commenced operations May 2009• Effective shareholding at 36.72%• Exclusive distribution of Multilinks products• Further agreements with Nigerian networks for distribution of

recharge, including ZAIN, GLO, Etisalat, Starcomms• Establishment of solid relationships with the largest dealers in

Nigeria ensuring national distribution footprint• Implementation and pilot of virtual technology for bulk printing and

POS in October 2010

74

APS Nigeria: Key Pillars Focus

Key Drivers

Value Proposition -

Dealers

Market Penetration

New product and


Operators

• One device, multiple networks, multiple products, one investment

• Virtual secure vending• Leverage Group technology,

devices and terminals

• National Multilinks• EVDO• Mass market recharge• Virtual distribution• Bulk printing via bulk mailer

• Introduce Virtual Distribution

• Low cost terminals US$200 to US$ 90

• Mobile Merchant• Device market early stages

compared to other countries

• All operators• National Vending• Pilot phase end Oct – rollout Nov

2010

75

APS Nigeria: Lifecycle Snap Shot

Other Products, Bill payment

AirtimeFootprint


76

Ukash: Background and Overview

• Smart Voucher Ltd was founded in 2000 as an Electronic Vouchering System – offering retailers and internet businesses “white label” eVouchersolutions to replace gift tokens and paper vouchers

• In 2005, Ukash was created as a general purpose Electronic Money product, designed as an electronic surrogate for notes and coins online in the UK

• Over the past 5 years, Ukash has grown exponentially and is serves over 50 international markets on 6 continents

77

Ukash: Key Pillars Focus

Drivers

Cost Management

Market Penetration

New product

Money Transfer

• Review overheads• Global expansion reviews on

market entrance methods • Russia and South America

• Unique positioning of largest emoneynetwork

• Target Corridors

• Cash deposits into Prepaid Cards

• Mastercard• Virtual Prepaid cards

• Money Transfer • Develop mobile wallet, Kiosk

solution sets

78

Ukash: Key Drivers

UnbankedLow Card Penetration

Move to Cash Spending

Paid Online Content

Cash

• Target Cash in Circulation -€800bn in EU



• Broadband

• Online Gambling

• VOIP access

• Mobile Content

• MMORPG

• Convenience and Control

• Security and Privacy

• Not Credit

• Youth Segment

• Vouchers is alternative

• 60% of Europeans do not have access to cards

• Financial Services license provides access for under and unbanked

Ukash – Prepaid voucher for spending cash online (directly integrated merchants)Ukash NEO – Prepaid Virtual MasterCard (all other merchants)

79

Ukash

Vouchering and Couponing

Mobile WalletOther ProductsFootprint


80

Sharedphone: Key Pillars Focus

Key Drivers

Value Proposition

Market Penetration

New product and


Terminals

• One device, multiple networks, multiple products, one investment

• Virtual secure vending • Global Opportunity• Community based pay

phone original market entry• Strategic co-operative

licensing

• Complete administration system

• Flexible integrations• Mobile Merchant• Multiple product vending –

Market specific

• Low cost solution <US$90• Printers and Handsets owned IP• SIM slave , flexibility• Terminal opportunity - RICA

81

Sharedphone

ExpandMobile walletOther Products, terminals, appsDevice

development


82


Dr Angelo RoussosGroup Chief Information Officer

83

Overview

BLTS Group Technology is responsible for the Group’s CoreTechnology systems and its objective is to develop, deploy andsupport the technology platforms within BLTS - as well as a number of3rd party partners

The Core Technology service offering includes:

• The facilitation of Secure Financial Transactions • The provision and enablement of various types of Secure e-Tokens • The Operational Support of these e-Token and Transactional

Systems• Device and Customer Field support (now managed by Group

Operations)• Hosting and Management of IT infrastructure • Manufacturing and maintenance of Devices in the Field (now

managed by Group Operations)

84

Develop commercially viable and functionally rich transaction engines

Provide stable and robust platforms, and support thereof

Optimise technology investment

Standardise platforms and deployments - architecture, processes, templates and

methodologies

Retain and develop skills

STRATEGY

85

Structure (excludes Mobile/B2C)

BLTS CIO


Project Office

Finance & Centre of Excellence


Blue LabelMobile


Core Technology

Development & Operations

Infrastructure & Hosting

ACTIVI

Transaction Junction

BLTS Technology & Architecture Working Group

86

Operational Capabilities

EFT Switching Platform

EVD/VAS Platform(Pin Generation &

RedemptionBulk Print

ConsignmentUtilities & Bills)

(Pin GenRedeBulk

ConsiUtilities

Card Management Platform

(Gift CardsLoyalty)

Card MaPlat

(Gift

Group MIS (and Accounting /

Financial Management)

Platform

Core IT Infrastructure & Operational Support

EFT Switching Platform

S PlatformS Platformneration &mption

k Printgnments & Bills)

nekis

Loyalty)alty)Loy

Group MISISAccounnt

FinanncManageem

Platfoor

Core IT Infrastructure & Operational Support

87

AEON

Mobile Devices



Bulk Voucher



AirtimeUtilities



etc

Bill payments /

EFT


tickets




POSTILION


Consolidated BLTS Switch

• Voucher Issuing• Voucher Redemption• Stored Value• Transaction Processing

(EFT/VAS

Core BLTS Transactional Platform

Rapidly Deployable

• On-site – South Africa / International

• ASP – South Africa / International

Rapid Services Provisioning

AEONSwitch

AEON merchant terminal

management system & EVD

Std Account Interface Database

Account Package

3rd party host to host

88

AMSProtocol

JSON API

Esocket.POS

GSM Networks (Tokens)

Devices

SpectraNurit

Touch screenVending Mach

ATM

Gateway

Interfaces

Term App

Ukash (Tokens & Online)

GSM Networks(Top-up)

Electricity

Banks

Lotto

RSC

Drawcard

Tutuka

Bill payment

Ukash (Online)

DeviceMng #

BusinessRules #

TransactionManagement

3rd PartyConnectors

Merchant Mng #

Accounting#

SettlementPostilion Realtime

Postbridge Source

PostilionOfficeRecon

DeviceMng #

BusinessRules #

TokenManagement

Token ImportMerchant Mng #

Accounting #

Switch

AltechCKSFNB

POS

PilotArch

RetailixRetailman

Wincor Nixdorf

PostbridgeSink

AEON – EVD

AEON Switch

Postilion

yy

Partners

CAPSKwikpay

VVXML API

Other (Tokens)

AEON

89

Electricity Vending

UNIPIN

90

Transaction Junction

STRUCTURE� Cape Town based� Over 50 of years collective experience in EFT both on a local and

international level.

OBJECTIVE� Develop, enable and deploy secure transaction solutions, services

and technology� Pro-active transaction processing and management.

SERVICES

AND

SOLUTIONS

� Robust post-transaction data processing.� Integrated Value Added Services. � Comprehensive Suite of Transaction Junction Products.� System implementation and integration.� Management and support.� Project management and consultancy over the full range of

Postilion products.

PROVEN

TRACK

RECORD

91

POSATMVoice

Internet

NetworkHost

systems

Fileimports

Reconciliation files

Fileextracts

ACH

General ledger

Fileextracts

Generalledger

Reports

Fileloads

Fileextracts Card

production company

eSocket.POS

eSocket.web

eSocket.ATM

Transaction Junction: Postilion Experts

92

Transaction Junction: Services and Solutions

• Services- System implementation- System integration- Management and Support- Project management and consultancy - Full range of Postilion products:

• Postilion Realtime• eSocket.POS/WEB/ATM• Postilion Office• PostCard

93

Transaction Junction: EFT and VAS Network

94

Key Highlights for 2009/2010

Enhancement of core service capabilities and integrations through AEON

Final phase of integration and rollout of Navision in most South African business units/subsidiaries

Implementation of MIS system - first phase due for completion by end-October 2010

Ukash online now in place through retailers including Pick n Pay and Shoprite

Lotto integration now live with Shoprite and via Mobile partners

Successful rollout of Electricity UniPin in South Africa – to be significantly expanded during 2010

Successful e-Top Up integrations to Cell C and Vodacom – have begun online integrations into Telkom and MTNConclusion of Telkom / BLD agreement to provide all soccer stadiums in SA with self service Vending machines

Provisioning of self service vending machines for the Gautrain project.

Rica systems are now stable, and BLD has deployed in excess of 5500 devices

Mexico integrations well on track, and POS deployments have now exceeded the 3000 installed device base

95

Blue Label MobilePower to the People

Dr David FraserGroup Chief Technology Officer

96

Objective 1 – Convert customers into merchants

… and offer merchant and consumer services through ONEenvironment

99

Objective 2 – Expand Reach - products to the people

Young Widely distributed

100

Objective 3 – Expand Contact - products to the people

Blue Label PoS

130,000

PoS PoP ~600,000

Mobile SIMs 55,000,000

1

10

100

1 000

10 000

100 000

1 000 000

10 000 000

100 000 000

The South African Example

101

Blue Label SA PoPs = 2 x Ellis Parks

102

SA Mobiles = 900 x Ellis Parks

103

World Mobiles

104

Objective 4 – Increase service and product range

• Downward pressure on margins

• Limited product range• No end-customer loyalty or

emotional attachment• B2B service

• POS & Integrated Channel • Mobile Channel

• Downward pressure on margins offset by higher margin VAS and transactional services

• Unlimited product range• Customer loyalty &

emotional attachment• B2B, B2C and B2B2C

services

NEWTRADITIONAL

105

Warren Buffet

“You do not need to own the road, only the tollbooth on the traffic artery.”

MERCHANT

MERCHANT

MERCHANT

MERCHANT

MERCHANT

106

Mobile Solutions Platform

Core Transactional Platform

Handset Solutions

108

Blue Label Mobile Solutions Platform

BACKENDHOSTS

Encryption

iVERI INTEGRAT CELLFIND MOBILECOMMON

FEE OBS

CURRENCY AUDIT LOG

AIRTIME SMS DELAYEDMESSAGING

PARTNER

PORTAL PROFILE

IMAGE

REWARD

LIVE ID UKASH

VENDOR WALLET

ADMIN

TRANSACTIONAL

BALANCE, PAYMENT, TRANSFER, HISTORY

Credit /Debit cards Paypal UKASH EFT / Debit

Order P2P

INSTANTMESSAGING System Chat Chat Rooms

NETWORKOPERATOR OBS SMS USSD

ADVERTISING Serve Ad Ad Event

PRODUCTS Pin BasedAirtime

PinlessAirtime

Pre-paidElectricity CONTENT CMS Portal UGCCLASSIFIEDS Category

Management Browse Post Feeds / Polls /Surveys

MSC ID

Session

Identity

CHIRPME Particle Subscribe Moderate CALLINK Call Saver Top-up

MOBILE BROKER GATEWAY User Session GatewayStateManagement

ConnectionManagement

PluginManagement

WAP WEB3rd PARTIESJ2ME MobileONEAPP Mobile MOBILE POS USSD

LIVE ID

DigitalFingerprint

PAAS & SAAS WEB SERVICES

SECURITY

PAYPAL

USSDProxy

ServiceManagement

SessionManagement

CHANNELS

PROXY LAYER

EXTERNAL HOSTS LAYER

AEON JSON TEBA TRANSACTIONJUNCTION PPE Host

TRUTEC

CAMPAIGNSREWARDS

Hook &Trigger

Reward& AwardCampaign

COMMONLIBRARY MCC MNC MSISDN

ROLLBACK AUDIT LOG

TransactionVerification

TransactionFulfillment

IMAGEINTERFACE

Folders Images

USER Identity Profile Metrics

HANDSETS Detect Manage ClassifyPeer 2 Peer

Compression DigitalCertificate

CONTACTS Import Group Manage Profile Invite Message

TWITTER

LBS

Cell ID Position

Games

Pay 2Play

Free 2Play

Referals

mCOMMERCE Wallet Accounts Currency Shop VendorTop-up Pay Partner LimitsSchemes

Encryption

MOBILEMERCHANT

MerchantIdentification Authentication XML Translation Mobile

FilteringMobile Report

DeliveryADMINSYSTEM

Users, RolesPermissions

Partners &Permissions

Groups, MenusPortal Tools ReportingSystem

WAP WEB3rd PARTIESJ2ME MobileONEAPP Mobile MOBILE POS USSD

CHANNELS

Channels

CCHHIIRRPPMMEE PPaarrttiiccllee SSuubbssccrriibbee MMooddeerraattee CCAALLLLIINNKK CCaallll SSaavveerr TToopp-uupp

MOBILE BROKER GATEWAY User Session GatewayStateManagement

ConnectionManagement

PluginManagement

USSDProxy

Servrr iceManagement

SessionManagement

PPRROOXXYY LLAAYYEERR

Compression DigitalCertificate

Encryption

Proxies & Service Brokers

TRANSACTIONAL

BALANCE, PAYMENT, TRANSFER, HISTORY

CCrreeddiitt //DDeebbiitt ccaarrddss PPaayyppaall UUKKAASSHH EEFFTT // DDeebbiitt

OOrrddeerr PP22PP

IINNSSTTAANNTTMESSAGING System Chat Chat Rooms

NNEETTWWOORRKKOPERATOR OBS SMS USSD

ADVERTISING Servrr e Ad Ad Event

PRODUCTS Pin BasedAirtime

PinlessAirtime

Pre-paidElectricity CONTENT CMS Portal UGCCLASSIFIEDS Categoryrr

Management Browse Post Feeds / Polls /Survrr eys

CCAAMMPPAAIIGGNNSSREWARDS

HHooookk &&Trigger

RReewwaarrdd& AwardCampaign

COMMONLLIIBBRRAARRYY MMCCCC MMNNCC MMSSIISSDDNN

ROLLBACK AUDIT LOG

TTrraannssaaccttiioonnVVeerriiffiiccaattiioonn

TTrraannssaaccttiioonnFFuullffiillllmmeenntt

IMAGEIINNTTEERRFFAACCEE

FFoollddeerrss IImmaaggeess

UUSSEERR IIddenttiitty PProffiille MMettriics

HANDSETS Detect Manage ClassifyffPeer 2 Peer

CCOONNTTAACCTTSS Import Group Manage Profile Invite Message

LBS

Cell ID Position

Games

PPaayy 22Play

FFrreeee 22Play

Referals

mCOMMERCE Wallet Accounts Currency Shop VendorTop-up Pay Partner LimitsSchemes

MOBILEMMEERRCCHHAANNTT

MerchantIdentification Authentication XML Translation Mobile

FilteringgMobile Report

DeliveryyADMINSSYYSSTTEEMM

Users, RolesPermissions

Partners &Permissions

Groups, MenusPortal Tools ReportingSystem

Platform as a Service (PAAS)Software as a Service (SAAS)

BBAACCKKEENNDDHHHOOOSSSTTTSSS

iVERI INTEGRAT CELLFIND MMOOBBIILLEECCOOMMMMOONN

FFFEEEEEE OOOBBBSSS

CURRENCY AUDIT LOG

AAAIIIRRRTTTIIIMMMEEE SSSMMMSSS DDEELLAAYYEEDDMMEESSSSAAGGIINNGG

PARTNER

PPPOOORRRTTTAAALLL PPPRRROOOFFFIIILLLEEE

IMAGE

RRREEEWWWAAARRRDDD

LIVE ID UKASH

VVVEEENNNDDDOOORRR WWWAAALLLLLLEEETTT

ADMIN

PPPAAAYYYPPPAAALLL

AEON JSON TEBA TTRRAANNSSAACCTTIIOONNJUNCTION PPE Host

TRUTEC

TWITTER

Core Transactional & External Hosts

Enccrypttion

MMSC ID

Seessioon

Iddentity

LIVE IID

DDigitaalFinggerpprint

SSSSSSSSSECCURRITY

Security

109

Blue Label Mobile Solutions Platform

Proxies & Service Brokers

Platform as a Service (PAAS)Software as a Service (SAAS)

Security

110

mobiWallet, mobiMerchant, mobiSecure

111

mobiWallet, mobiMerchant, mobiSecure

- mobiWallet (personal m-wallet)- mobiMerchant (cellphone-based merchant solutions)- mobiSecure (end-to-end security for the above)

112

Wallet Structure – what people are used to

Wallet

Accounts

Cash

113

mobiWallet

•Multi-channel Access• Java• USSD• WAP• Web

114

mobiWallet

115

mobiMerchant - Turning customers into merchants

• Anyone can be a merchant• With their existing phone• And their existing SIM• Enabled over-the-air• Access to merchant service via

• Java, USSD, WAP, WEB• Generate personal business from

products and services sold• Operate as money transfer agents• Take services to deepest rural

communities• No long term obligations or high

barriers to entry (cost, devices etc.)

116

• Stand-alone Java applet or USSD

• Fully integrated with Blue Label’s Core Transactional and Mobile back-ends

• Full reconciliation,multi-tiered merchant solution with multiple operator support

mobiMerchant

117

What next?

• Globally, a “young” population prefers to use the mobile channel

• Mobile eco-system owners will be the landlords of future

• Technology is key to unlocking value but will be like an iceberg – mostly hidden

• Highly integrated mobile offerings will be key tipping point for merchant uptake

• The service provider will be the “bank” • Alternative payment networks will form

through coalition and peer-to-peer networks

• Transactional intelligence will be the new “currency”

119

Blue Label Solutions

John HawthorneVelociti CEO

121

Blue Label Solutions Companies

Datacel• 2 operational companies:

- Velociti (call centre business)- Blue Label Data Solutions (data analytics services provider)

• And 4 non-operational entities:- Answers Direct (former call centre business, closed early 2009)- Datacel (former BPO business, ceased operations early 2009)

• still producing annuity income- Blue Label Call Centre (former call centre business, closed September

2009)- CNS (former call centre business, ceased operations May 2010)

• still producing annuity and building rental income

122

Velociti Introduction

• Full service inbound and outbound, sales and customer services BPO provider

• Established January 2006• 100% owned by Blue Label Telecoms Group• 760 seat facility in Durban with back-up facility in

Bloemfontein• Authorised Financial Services Provider • Level 5 BBBEE rated company• State of the art technology platforms• Blue chip client base• Key differentiators include

- Focus on being a partner not just a supplier to our clients

- Culture of development and empowerment- Quality customer experiences and industry leading

sales performance are a cornerstone of our business

A proud member of the Blue Label Telecoms Group123

Velociti Structure

CEO John Hawthorne

CIO

Business Intelligence IT QA & PM

COO

Finance Outbound Ops Inbound Ops CRM

Employee Relations

Training & Development HR Communications

Officer

124

� Focus on building brand equity with clients through effectively managing their clients’ lifecycle from acquisition through to retention

� accomplish this through an intense internal focus on our people, operational processes, and technology

� Back office teams deliver client KPIs though recruiting, training and development, reporting and analytics, quality assurance, and client relationship management

� Passionate about the development of our people into service based leaders

Velociti Service Methodology

• Total Client Lifecycle Management - Execution of CRM• Bespoke tailor-made services and solutions• Industry best practice processes and methodologies

ACQUISITION�� Outbound Sales�� SalesPlus®�� Lead Generation

SERVICE�� Customer Service�� Jumpstart Program�� Loyalty Program

RETENTION�� Marketing Programs�� Contract Renewal�� Loyalty Program

GROWTH�� Up-sell & Cross-Sell�� Loyalty Program�� Acquisition

A proud member of the Blue Label Telecoms Group

� Build client’s brand� Improve brand loyalty� Improve customer experience

� Increase customer satisfaction� Increase customer spend� Reduce service costs

125

Velociti Current Footprint and Future Growth

� Outbound Campaigns� Virgin Mobile � Digicall (Altech Autopage)� Nashua Mobile� Absa Insurance� Transunion� Cellfind� The Post Paid Company� The Unlimited World

� Inbound Campaigns� TransUnion� iBurst� Pick n Pay � Cellfind� RICA � Cisco

� Launched 2 new campaigns in October� Recently filled over 15 new staff positions, all with internal applicants� Recent growth in second half of 2010� Robust sales pipeline with blue-chip growth – short term domestic, long term international� Focus on expansion of inbound business to match global focus on customer experience� Focus on expanding service offering into new industries and markets� At capacity in current site, sourcing new locations in Durban, Bloemfontein� Internal projects kicking off focused on improved QA methodologies, knowledge management,

agent coaching, and leadership development

126

Blue Label Data Solutions Overview

• Evolved into all-encompassing data solutions and delivery company

• Best practice approach to data services reduces complexity and risk to clients

• Aligned with Direct Marketing Association of South Africa to become compliant with all industry data protection bills

• Achieved sought-after DMA compliance accreditation

127

Background

• Transformation from raw data provider to full service data analytics provider

• Expanded beyond Group to providing services to blue chip clients

• Continued reduction in data costs through unique partnerships resulting in more cost effective data cleansing

128

Management Structure

Blue Label Data Solutions

Executive Chairman

Larry Pogir

CEO

Quintus Muller

Financial Director

Estelle Baard

129

Current Offerings and Key Growth Areas

• Supply of consumer data• Data profiling and analysis of new and existing client data• Contact update and data cleansing• Lead generation• Direct marketing and brand awareness• Email, SMS and MMS campaigns• Recent successes

- Continuous client growth and market share- DMA accreditation has ensured that we are a respected provider in an

increasingly regulated industry• Objective for the year ahead is to capitalise on these successes to

become one of the leading data specialist companies in SA

130

Blue Label Solutions Summary

Velociti• Change in executive management • Site expansion plans • Focus on changing with domestic market and preparation for return of international opportunities

Blue Label Data Solutions• Posted record profits in last financial year and continues to perform over budget• Providing diverse product offering through specialist partners in direct marketing industry•

While 2010 has been a tough year for the BPO industry in South Africa, we have weathered the storm and grown in this difficult environment

The future is bright for Datacel as we align internal and external resources with a common goal and vision to be market leaders for South Africa

131

welcome to blue label telecoms investor...

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