Tigo Cash : Mobile Transfer for Emerging Markets Steven Jurgens Head of Region & Group CSR November, 2008 Millicom International Cellular S.A.
Who are we? – Millicom Highlights • 25 years of emerging markets history • Luxembourg company; Swedish heritage; • 16 countries – Latin America, Africa & Asia ; > 30 million subscribers • Triple-A strategy – Affordability: - Low denomination reloads – Accessibility: - Ease of purchasing minutes – Availability: - Extensive & good network coverage • One global brand: Tigo • Use of proven technology – broad range of services • Employs + 6,500 people (+100% from 2006) • Revenues of 2.6 billion US$ & Investments of 1 billion US$ in 2007 • Listed on Nasdaq 100 – market capitalisation of approx. 5 billion US$ • Part of MSCI (Morgan Stanley Capital International) World index YYMMDD_Country_DocumentName
What does Tigo Cash do? – Our business model Going beyond making a profit… …and starting to make a difference Churn avoidance Providing banking and remittance G-Cash customers in Philippines show 80% services to the poor : lower churn rate vs. regular mobile users. Payment & remittance Services - Micro-payments Tigo Cash makes profit from transaction The debit card for low rollers fees. - National remittances $250 Bn of intl remittances globally (WB, ‘06) Mobile to mobile and national remittances - International remittances Airtime self top-up Online / Outlet to mobile Tigo saves commission to distributive trade when customers buy airtime via self top-up
What are the benefits? – Sharing the value pie TIGO CASH Product Retailer benefit TIGO Customer benefit Millicom benefit - Lower - Air time promotions - Churn Payments Commission vs. avoidance • High end retail services (gas - Loyalty club with benefits credit / debit stations, malls) - Loyalty cards - Revenue - Reduced cash - Reduced cash handling - Churn Mass Market retail services handling avoidance • FMCG supplier is paid with - Security Tigo Cash by the retailer - Security -Loyalty - Airtime promotions • Retailers sell grocery - Customer -Revenue - Loyalty club with benefits products for Tigo Cash traffic - Cash-in fee - Lower cost - Transaction National Remittances fee • Tigo customer service and - Cash-out fee - Smaller amounts sales shops - Safer than informal channels - Cash-in fee - Lower cost - Transaction International Remittances fee •Tigo customer service and - Cash-out fee - More cash-out points sales shops - Spend directly with Tigo Cash
Who are we working with? – Our partners Name of sub ‐ project Description Financiera El Comercio Cash ‐ in and Cash ‐ out. International remittances Fundación Paraguaya Microcredits in main cities and countryside. Banco Continental Interact bank account and electronic wallet (Tigo Cash). B King, Pizza Hut, etc. Aspirational businesses to contact our young audience Cervepar Local largest beer distributor: will use Tigo cash to collect payments from the points of sale. Citibank Escrow Account Hiperseis The largest supermarket chain in Paraguay with 13 branches Aprobados Games in local popular TV program. Inverfin Chain of POS Unilever FMCG, Tigo Cash will be the way to collect payments. (‘09) Barcos y Rodados Oil Company . POS Pares Coca Cola in Paraguay. Tigo cash, will be the way of pay of it direct sales Oil Company. Cash ‐ in and Cash ‐ out in their shops and payment of products. Lubripar More than 230 base stations (’09) Oil Company. Cash ‐ in and Cash ‐ out in their shops and payment of products. Sale of Aprobados Petrosur tickets and E ‐ pin 09/XX/07 Netel Network of payment: more than 1500 collection points. Cash ‐ in and Cash ‐ out in their branches
How does it work? – Tigo Cash and Micro-credit Benefits For Microfinance Institutions: • Less time and admin costs • Instant receipt of loan • Avoids risk of money transport For Customers: • Avoids cost and risk to pick up money • Easy to check debt status • Avoids risk and cost to pay back loan
What are the key success factors? What we learned in Paraguay • Bank partnership • Cooperation with local regulator • 100% security and reliability of Tigo Cash platform • Business and marketing plan – Visibility • Agreement with distribution channels on commission structure • Education and training of agents, internal support and subscribers • Churn rate is 10% of average • Average reloads up by +$1 YYMMDD_Country_DocumentName
Thank You!
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