AFRI AFRI ICA P ICA P PREPA PREPA AID S AID S SERVI SERVI ICES - - PDF document

ERIA ERIA NIGE NIGE ICES ICES SERVI SERVI AID S AID S

Secure Bulk Printing

PREPA PREPA

& POS Terminals

ICA P ICA P AFRI AFRI

ERIA Trends | Rising African Consumer NIGE | g

• Brand conscious

ICES

• Price sensitive...extremely
• Not loyal – switches quickly
• Love promotions and giveaways

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Love promotions and giveaways

• Increasingly connected...cellular & Internet
• Increasingly urban

M d d d i h i i l

AID S

• More educated and aware, some with international

qualifications

• Very entrepreneurial

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• More discretionary spending power but selective
• Spends on communications before Coca Cola
• Most are young (below the age of 35)

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• Most are young (below the age of 35)
• Increasingly speak and read English – financial services

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ERIA DON‐P COMMUNICATIONS NIGE ICES SERVI AID S PREPA ICA P

Th l d i Ab j di b d d tl t ll Th l d i Ab j di b d d tl t ll

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The leader in Abuja regarding branded outlets as well as The leader in Abuja regarding branded outlets as well as distribution channels distribution channels

ERIA Context | Snapshot of Nigeria NIGE | p g

• Population (millions): 151.3 (largest in Africa)

ICES

p ( ) ( g )

• GNI per capita ($): 1,160
• GDP ($ billions): 212.1

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($ )

• GDP growth (%): 5.3
• South Africa’s and Nigeria’s

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Sout ca s a d ge a s GDP in nominal prices comprises over 50% of

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SSA’s GDP

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Source: World Bank African Development Indicators 2010

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ERIA

Context| Banking Profile of Nigerian Adults

NIGE

• Bank penetration is relatively low
• 85% of adult females are unbanked

ICES

21%

Currently Banked

• 86% of rural population are currently

unbanked

• Only 21% of the adult population has a

bank account, which is equivalent to

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5%

a ed

Previously Banked

bank account, which is equivalent to 22 million people

• 74% of the adult population have

never been banked, which is equivalent to approximately 64 million

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Never

Banked

q pp y people

• About 4 million other adults are

previously banked, in other words, have left the banking system

PREPA

74% Banked

Banked definition:

currently have any of these: ATM card debit card value

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currently have any of these: ATM card, debit card, value card, credit card, savings account, current account, fixed deposit account, mortgage loan, overdraft, Islamic loan

• r Islamic financing investment.

Source: Enhancing Financial Innovation and Access

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ERIA

Context| Why the unbanked are unbanked!

NIGE

| y

• Traditional commercial banking as we know it is operated on ‘high margin low

ICES

volume commercial template’

• There is a disconnect between classic banks and lower income customers.

B tt f th P id t d t t th i ff d b b k

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Bottom of the Pyramid customers do not want the services offered by banks. and typically do not buy the services offered by the existing banks while banks presume that they are not very profitable to service

AID S

• The documentation hurdles set by regulators and the banks are typically too

high for customers at the bottom of the pyramid to scale;

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• Lack of complex systems to handle high volumes of transactions (with very

high levels of availability) and bespoke business processes which are uncommon to traditional banking principles

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uncommon to traditional banking principles

• Inadequate financial services infrastructure and limited customer touch points

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ERIA Context | Telecoms in Nigeria NIGE | g ICES SERVI AID S

Total connections 2010 forecast 88,267 million % Growth in total connections p.a. 20.68%

PREPA

Prepaid as % of total connections 98% plus Market penetration 57.3%

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Prepaid ARPU (USD/month) 8 to 14

Source: BMI‐T

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ERIA Context | Active GSM lines in Nigeria NIGE | g

74.07 80

ICES

55 65.53 60 70

Mobile subscriber base (millions)

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40 55 40 50

AID S

25 30 20 30 40

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10 20

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2005 2006 2007 2008 2009 Aug‐10 Total active lines (GSM + CDMA + fixed lines): 80 69

Source: BMI‐T

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Total active lines (GSM + CDMA + fixed lines): 80.69

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ERIA APSN | Overview NIGE |

• Started trading May 2009

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• Subsidiary of JSE‐listed Blue Label Telecoms

– Necessary financial backing as well as wealth of experience in distribution of prepaid products and transactional ser ices

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transactional services

• Initial focus on the sourcing and supply of Telco

products and services b d l d f l l

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• Moving beyond: sale and support of multiple

carriers and the introduction of value‐added services

h l l l h

PREPA

– Strengthening dealer and super‐dealer relationships – Network agreements with AIRTEL, GLOBACOM, ETISALAT, and STARCOMMS for direct recharge purchase

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purchase – Prepare to offer single POS device and bulk printing

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ERIA APSN | 2010 and next steps NIGE | p

• November 2010, APSN announced cancellation of

ICES

distribution agreement with Multi‐Links and claims for damages

• Procedure:

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• Procedure:

– Quantifying claim – Arbitration process

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Arbitration process – Jurisdiction in South Africa

• Right‐sizing operations in Nigeria

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• Overall strategy for Nigeria continues

– Expand existing footprint by growing the distribution of i t l id d t i t hi ith Ni i

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virtual, prepaid products, in partnership with Nigerian network operators and utility providers

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ERIA APNS | Key focus areas NIGE | y

• One device, multiple

ICES

Value Proposition ‐ Dealers

, p networks, multiple products,

• ne investment
• Virtual secure vending
• Leverage Group technology
• EVDO
• Mass market recharge
• Virtual distribution
• Bulk printing via bulk mailer

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• Leverage Group technology,

devices and terminals Bulk printing via bulk mailer

AID S

Key Drivers

Market Penetration Operators

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New product and

• Introduce Virtual Distribution
• Low cost terminals from

US$100

• Mobile Merchant
• All operators
• National Vending

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Technology Platforms

Mobile Merchant

• Device market early stages

compared to other countries

• Pilot phase end Dec –

rollout Jan 2011

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ERIA APSN | Distribution Footprint NIGE | p ICES

Extensive national footprint

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APSN has an extensive nation‐wide footprint, which enables the distribution of products and services

AID S

to outlying areas. Blu Approved devices and service

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Blu Approved devices and service agents have been deployed across the country to ensure intensive market penetration

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p

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ERIA APSN | Detail distribution footprint NIGE | p

An illustration of dealers and sub‐dealers across Nigeria

ICES

An illustration of dealers and sub‐dealers across Nigeria

Points of distribution

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44 93 152

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38 North North Central

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122 North Central South East South West

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South 2010

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ERIA APSN | Networks and Partners NIGE |

Network Partners

ICES

Network Partners

SERVI AID S

350 dealers nationwide

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ERIA APSN | Products and Services NIGE | ICES

Secure POS Solution

• Electricity

Secure Bulk Printing

• Electricity

Eezzee Recharge

• Airtime

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• Airtime
• Bus Tickets
• DSTV
• Airtime
• Bus Tickets
• DSTV
• Credit Transfer

AID S

• Internet
• Virtual money

W t

• Internet
• Virtual money

W t

PREPA

• Water
• Water

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ERIA APSN | Secure POS M‐Payment solution NIGE | y

• User friendly

ICES

• Manual and automated ordering menus
• Excellent shift and stock controls

h

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• High margins
• Multiple levels of security access, sales analysis and

reporting functionality

AID S

• Automated reporting systems
• Web‐interface for management report

N t li it d t hi h t t

PREPA

• Not limited to high turnover stores
• Efficient and secure transaction processing
• Multiple different POS terminal devices can incorporated

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• ur software and be integrated to our system

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ERIA APSN | Eezzee Recharge NIGE | g

• Print and vend airtime...Anywhere, Anytime

ICES

• Light and compact
• Display sold PIN either:

h b l

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• On the mobile unit
• Print on thermal printer
• SMS to client

AID S

• No stock kept on mobile unit
• Sell all denominations of all networks

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• Can utilise the mobile unit for normal calls and SMS

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ERIA APSN | Secure bulk printing solution NIGE | p g

APSN bulk printing helps overcome:

ICES

p g p

• Complicated logistics
• Difficult distribution strategies

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• Expensive distribution
• High‐risk distribution methods
• Expensive production costs

AID S

Expensive production costs

• Financial risk and fraud to the cellular service provider

and the merchant i d l d l d li i f id h k

PREPA

• Time delays and late deliveries of prepaid voucher stock
• High stockholding shrinkage

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ERIA APSN | Multi‐tier software NIGE | ICES SERVI

APSN Virtual Warehouse

AID S

Selected Super Dealer Networks

PREPA

Selected dealer networks or vendors

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Street Merchants

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End User

ERIA APSN | POS strategy NIGE | gy

In assigning projected figures to the various regions, we

ICES

g g p j g g , considered the following parameters holistically:

• Network availability: the number of networks present have a direct

ff h l

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effect on recharge sales

• Population: the number of people within this region as well as the area

AID S

p p p g

• Economic viability: this considers the availability of businesses,

educational institutions and places of considerable economic

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educational institutions and places of considerable economic availability in the area

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ERIA

APSN POS Strategy | National distribution

NIGE

gy |

Distribution Overview

ICES

10%

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10% 10% 40% North North Central

AID S

20% North Central South East South West

PREPA

20% Lagos

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