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Airtime sales could boost stokvels

By Itumeleng Mogaki, ITWeb junior journalist
Johannesburg, 20 Feb 2006

Telecoms service provider Shapeway Telecoms' Bubbleblue initiative, aimed at selling cellphone airtime through stokvels and burial societies, could earn community structures an estimated R30 million every year in profits.

This is according to Gabriel Nkuna, director of business development at Shapeway Telecoms. He says the plan involves selling discounted prepaid airtime through cooperative community structures, which will then add a margin onto the cost.

Shapeway will invite 7 750 stokvels and burial societies to participate in a pilot project in March.

If the pilot is successful, Shapeway hopes to roll-out the full project to 38 000 stokvels and burial societies.

The company is looking to sign up at least 30% of the cooperatives in SA, and says they would share estimated profits not less than R30 million per annum.

"Cooperatives will acquire airtime at an estimated 9% less the normal price from Shapeway and sell it at a profit to the members of the cooperative as well as to their families, friends and communities, "says Nkuna.

"We assumed that on average our target cooperatives will purchase airtime averaging R2 500 per cooperative per month. The assumed average 9% profit margin on stock worth R2 500 at cost per month is equivalent to an average profit of R225 per cooperative per month. The 30% of 38 000 cooperatives making an average profit of R225 each per month (R2 700 each per annum) will make up an aggregate R30 780 000 profit per annum."

Nkuna says for the cooperatives to fully benefit from the Bubbleblue initiative, they should strive to acquire and sell stock worth at least R2 000 per month.

He says ideally, the company would want to develop the programme to be able to give something back to the loyal end-consumer, such as free airtime or SMSes, after purchasing a predetermined amount of prepaid airtime vouchers from the initiative.

"We can implement a number of ways to detect a loyal customer. For example, we can give a customer a token according to the value of airtime they buy, or we could do it electronically and link Bubbleblue airtime voucher numbers to a recharged phone number."

He says the airtime will not come from phone networks directly but in partnership with Africa Cash and Carry Dedicated Airtime Company, trading as Brand Cellular.

"Shapeway Telecoms is going to benefit through a revenue-sharing partnership with Brand Cellular on this initiative," says Nkuna.

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