South Africa’s Blue Label Telecoms on a Roll Despite Downturn

Mergers, Acquisitions and Financial Results

Technology and telecoms company Blue Label said it would continue pursuing the growth of its global footprint as it rolled out its expanding range of secure electronic tokens. The group, which last week posted solid results for the six months to November, said that in spite of the global economic meltdown, the products and services it provided remained appealing to its clients.

Blue Label, which distributes cellular airtime and other electronic services via point-of-sales terminals, cellphones and the internet said its transactional point of sale (POS), mobile systems and products and services were being integrated into Microsoft's mobile and advertising service platforms.

The group said that during the course of this year these services would be rolled out into emerging and developing markets through Microsoft Unlimited Potential Group and its global partners, utilising POS and mobile channels.

"This in future will translate into the monetisation of mobile and POS advertising in these markets." Revenues increased 23% to R7.6bn from R5.8bn, while profit increased to R199.7m from R40.7m. Headline earnings per share came in at 26.06c from 3.79c previously, while cash flow from operating activities was R421m.

The group had grown its community-based channels for the distribution of its products, including starter packs. The intention was to capitalise on the distribution base both organically and through the introduction of new channels, it said.

A strategic relationship had been established with First Data Corporation, a global transactional-switching service provider, in terms of which cross-pollination of relative networks was being explored.

Africa Prepaid Services, a subsidiary of the group, concluded an agreement with Multilinks Telecommunications, a subsidiary of Telkom in Nigeria, in terms of which it has been granted a service provider licence in Nigeria.

Blue Label had also acquired an effective 50,1% stake in Virtual Prepaid Network through its newly formed wholly owned subsidiary, BLT USA, for an undisclosed amount.

The group said the joint venture with Oxigen Services in India continued to incur losses, as anticipated in line with the cost of rolling out point of sale devices over a widespread area. But, it said it remained confident about the prospects of the operation.

Business Day