The Electronic Voucher Distribution

opportunity in Mobile
Telecommunications in Angola
August 2009
 The Angolan mobile subscriber market has
experienced significant growth in recent years

Mobile Cellular Growth in Comparable Mobile Subscribers in Angola,

African Markets, 2002 - 2008 2002 - 2008
8000
Rapid growth phase
Angola 63.9 6773

6000
Ghana 56.2
4962

Subscribers (000’s)
Mozambique 47.0 4000

2264
Ivory Coast 41.9
2000
Africa = 42.1
1094
740
DRC 39.0 350
140
0
0 20 40 60 80 2002 2003 2004 2005 2006 2007 2008

CAGR, 2002 - 2008

Note: CAGR – Compound Annual Growth Rate (%)

Source: ITU World Telecommunication/ICT Indicators Database
In spite of recent growth mobile subscriber
penetration remains comparatively low
Mobile Cellular Penetration in Comparable African Markets, 2008
60

50.7
49.6

45

37.6
Africa = 36.5
Penetration (%)

30

19.7

14.4
15

0
Ivory Coast Ghana Angola Mozambique DRC

Note: CAGR – Compound Annual Growth Rate (%)

Source: ITU World Telecommunication/ICT Indicators Database
Angola’s mobile market is expected to continue
experiencing rapid subscriber growth
Mobile Subscriber Growth Forecasts for Angola’s Mobile Market
80 75.0

70

60

50
Penetration (%)

37.6
Strong growth phase

40
expected between 2008
29.1 and 2011
30
Full telecom geographic
coverage expected to
20 be achieved by 2013
14.3
10.4

Growth will be driven by
emerging middle class
10 5.3
1.0 2.4

0
2002 2003 2004 2005 2006 2007 2008 2011

Source: An Overview Of Mobile Economics In Angola, Including Projects, Opex, Capex And EBITDA Performance
The lower % of prepaid customers is expected to
increase due to growth in middle class subscribers
Country Prepaid Subscriptions, 2008
105 99.6 98.9
94.1 Africa = 94.8

90
80.0

75 70.4
Prepaid subscriptions (%)

60

45

30

15

0
DRC Ivory Coast Ghana Mozambique Angola

Source: Wireless Intelligence, IMF, Ernst & Young “Africa Connected – A telecommunications growth story”, ITU World Telecommunication/ICT Indicators Database
Despite being the foremost means of distributing
prepaid airtime, scratch cards have a number of
challenges
The Generic Airtime Distribution Model
• In Angola, almost 100% of prepaid
airtime distribution is achieved using
scratch cards
• Challenges of physical scratch cards
– Management of the scratch card
supply chain and related logistics
• Manufacturer contracts
• Stock levels
• Write-offs and losses
• Airtime pin and card security
• Storage facilities
– Inflexibility with regards to airtime
denominations
• Lower denominations vs. cost of raw
material vs. increase in stock levels
– Heavy reliance on physical
infrastructure to reach remote areas
• Transportation networks and modes
Electronic Voucher Distribution (EVD) provides a
more cost effective, efficient and flexible model for
the distribution of prepaid airtime
The Generic Airtime Distribution Model
• Advantages of EVD
– Airtime can be sold anywhere as
long as signal coverage exists
• Optimizes distribution over the
operators coverage area
• Ensures distribution to more remote
areas with poor physical connectivity
– Translates into supply chain cost
savings given the electronic nature
of stock management
– Airtime can be sold in smaller
denominations
– Works across a variety of media
• Point-of-sale terminals in stores
• Direct handset recharge
• ATM recharge
• Internet recharge
• Credit card/ direct debit recharge
How EVD works

• The airtime request is transmitted

over the mobile operator’s GPRS
network to an application server
• Airtime is stored and managed by a
proprietary virtual distribution and
logistics platform running on the
server
• Airtime stock can be replenished
directly from the network operator or
a super-dealer
• The recharge information can be
delivered directly to the handset or
to other compatible media e.g. point-
of-sale device
• The server can also communicate
with banks to debit retailer or dealer
accounts
Potential EVD clients

• Mobile operators
– 2 in Angola e.g.
• Movicel
• Unitel

• Airtime super-dealers
– Retail chains
– Banks
– Post Office
– Individuals
The business model
• Realising Africa’s Potential (RAP) Investments has partnered with a provider of
EVD technology in South Africa to collaboratively seek opportunities in the
rapidly growing telecoms industry in Africa
• Our partner, an ICT company in operation since 2003, has developed a virtual
distribution and logistics platform that forms the basis of the service offering and
is the ultimate solution for prepaid retailers
– The platform is capable of working with a variety of output devices including:
Integrated GPRS POS with screen, keypad and high-speed thermal printer,
JAVA/GPRS handsets or a PC with a GPRS modem
– The platform is already being utilised in 4 African countries for airtime (and electricity)
distribution
– Typically, the client is charged an agreed percentage of the airtime value that is sold
through the platform
– Our partner is also the sole and exclusive distributor (for Africa) of a state-of-the-art
handheld POS terminal
• RAP Investments leverages its networks in Africa to gain access to key
decision makers in African telecoms markets and to tap into EVD opportunities
that exist
realiseafrica@gmail.com
+27846783000