Blue Label Telecoms aims to add new services to its distribution network, which it says will result in profit growing faster than revenue.
Mark Levy, joint CEO, says the company has spent several years developing a network, and now it can add in different applications, which will add straight to the profit line. “The imagination is the limit.”
At the core of the business is its ability to distribute secure electronic tokens, such as the airtime sold through till points across the country. Levy explains that the company was founded to sell airtime, and this has formed the basis of its distribution network.
It has since added on different items, such as prepaid electricity sales, and a funeral plan. The company is also working with partners to launch prepaid insurance. Levy explains that this will allow someone to go into a store - or anywhere else where it has a distribution point - and swap cash for insurance.
The network that is in retail outlets spans smaller “mom and pop” stores, as well as larger outlets such as Pick 'n Pay, Levy says. In addition, the company has developed a secure form of airtime that can be sold in bulk through cash-and-carry outlets, allowing smaller stores without connectivity to on-sell airtime.
customer,” says Levy. He refers to this network as the company's bricks and mortar operation, and the local operations account for over 90% of revenue, with about 130 000 distribution points - a number that is growing.
In three to five years' time, the company aims to have half of its revenue from countries other than SA. It is expanding offshore in two ways. One, says Levy, is to implement the bricks and mortar operation into countries such as India, Nigeria and Mexico.
The company expects Mexico and India to outperform SA in size. Last year, SA accounted for R14.2 billion of the company's R15.3 billion in revenue.
The other is to sell technology the company has developed, such as the point-of-sale terminals. Levy says Blue Label is in about 30 countries in this way. He explains that, because the company is cash generative and has no debt, it pays upfront when it expands.
Selling the intellectual property also gives the company a view of a country, and then a decision can be made whether to expand the bricks and mortar operation into that region, he concludes.
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