The Electronic Voucher Distribution Opportunity in Nigeria

7/31/2019 The Electronic Voucher Distribution Opportunity in Nigeria

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The Electronic Voucher Distribution

opportunity in MobileTelecommunications in Nigeria

August 2009


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Nigeria has the single largest mobile subscriber

market in Africa

Nigeria has overtaken South

Africa as the largest mobile

market in Africa

In 2000, South Africa accounted

for 74% of Africas mobilesubscribers

Most users tend to have more

than one mobile subscription

The Nigerian population, though

significant only accounts for

19.6% of the African population

Note: SSA ex. SA Sub Saharan Africa excluding South Africa

Source: ITU World Telecommunication/ICT Indicators Database

Distribution of Mobile Cellular Subscriptions in

Africa, 2008

Nigeria

26%Other

34%

South

Africa

19%

Kenya7%

Ghana

5%

Tanzania

5%

Ivory Coast

4%


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In recent years Nigeria has grown significantly

faster than other major African mobile markets

Note: CAGR Compound Annual Growth Rate (%)


17.8

37.3

41.9

56.2

64.8

0 20 40 60 80

South Africa

Tanzania

Ivory Coast

Kenya

Ghana

Nigeria

Africa = 42.1

CAGR, 2002 - 2008

Mobile Cellular Growth in Africas Largest Mobile

Markets, 2002 - 2008

Nigerias mobile market has

grown significantly faster thanthe entire African mobile market


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Despite significant growth the penetration of

mobile subscribers in Nigeria is still relatively low

90.6

50.7 49.6

41.9 41.7

30.6

0

20

40

60

80

100

SA Ivory Coast Ghana Kenya Nigeria Tanzania

Penetration of Mobile Subscribers in Africas Largest Mobile Markets , 2008

Africa = 36.5

Penetr

ation(%)



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Given Nigerias current penetration levels, mobile

subscriber growth is expected to continue

Note: Assumption Nigeria mobile subscribers will make up 25% of total mobile subscribers in Africa

Source: Africa Mobile Factbook 2008

64.0

95.9

126.7

134.5140.3

0

20

40

60

80

100

120

140

160

2008 2009 2010 2011 2012

Projected Number of Mobile Subscribers in Nigeria,

2008 2012

Mobilesubscribers(millions)

x2.2


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99% of mobile subscribers in Nigeria are prepaid

customers

Source: Wireless Intelligence, IMF, Ernst & Young Africa Connected A telecommunications growth story, ITU World Telecommunication/ICT Indicators Database

99.0 98.9 98.7 96.794.1

81.9

0

20

40

60

80

100

120

Nigeria Ivory Coast Kenya Tanzania Ghana SA

Country Prepaid Subscriptions, 2008

Africa = 94.8

Prepaidsub

scriptions(%)


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Despite being the foremost means of distributing

prepaid airtime, scratch cards have a number of

challenges

The Generic Airtime Distribution Model In Nigeria, over 65% 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


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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 theoperators 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


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How EVD works

The airtime request is transmitted

over the mobile operators 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 ora 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


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Potential EVD clients

Mobile operators

11 in Nigeria e.g. MTN

Glo Mobile

Zain

Multilinks

Prestel

Reliance

Starcomms Visafone

M-Tel

Intercellular

Bourdex

Airtime super-dealers Retail chains

Banks

Post Office

Individuals


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The business model

Realising Africas 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 virtualdistribution 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-arthandheld 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


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[email protected]

+27846783000

Documents

The Electronic Voucher Distribution Opportunity in Nigeria