Johannesburg - Global IT giant Microsoft Corporation plans to acquire approximately 12% of the issued share capital of Blue Label Telecoms (BlueTel, BLU) by way of a purchase and subscription for shares in the forthcoming listing of the South African telecommunications services company.
BlueTel, which distributes prepaid airtime and starter packs and provides a variety of other services, plans to list on the JSE on November 14.
Announcing the strategic relationship on Wednesday, BlueTel said it and Microsoft will "collaborate on a preferred partnership basis to drive services and products in developing economies and to exercise commercially reasonable efforts to provide mutual assistance to one another in exploring new business opportunities."
The strategic relationship brings to the fore a congruence between BlueTel's stated strategy of establishing a global transactional services platform in emerging markets with Microsoft's intention to deliver products, services and advertising, through BlueTel's distribution network, it said.
The main purpose of the collaboration agreement is for Microsoft and BlueTel to derive revenue - through an agreed revenue share model - by the channeling of advertising into BlueTel's distribution base.
Microsoft will support BlueTel's effort to increase its global footprint of contact points with customers through an accelerated deployment of a distribution and sales network that includes enhanced-feature point of sale mobile and other devices and the associated support and service platforms.
Microsoft will provide BlueTel with advertising services as well as access and licenses to various web-based and mobile technologies and services.
The agreement is conditional on the listing of the BlueTel's shares on the main board of the JSE.
BlueTel's Private Placing opened on Monday October 29 and is expected to close at noon on Thursday November 8.
Subject to obtaining a spread of shareholders acceptable to the JSE, the bourse has formally approved the listing of a maximum of 800 million shares.
The shares are due to be listed in the "Telecommunications sector - Mobile Telecommunications" of the JSE's main board under the abbreviated name "BlueTel" and code "BLU".
The proposed listing of the shares is conditional upon the raising of a minimum amount of capital of R700m before listing expenses, in terms of the Offer for Subscription, and a minimum amount of capital of R200m before listing expenses, in terms of the Offer for Sale.
BlueTel and its subsidiaries produce and distribute a wide variety of prepaid secure electronic tokens of value and provide transactional services, according to its pre-listing statement.
The Group's prepaid products and service offerings include prepaid airtime, prepaid electricity, third party bill payments, electronic funds transfer, gift vouchers, loyalty programmes, stored value cards, location based services and other prepaid tokens of value that are allied to the telecommunications, utilities, insurance, financial services and transport industries.
The group is one of the leading distributors of prepaid airtime in South
Africa and its distribution channels extend to supplying the foremost retailers and wholesalers, petroleum forecourts, independent retailers and directly to end-users.
The success of the Blue Label Group within South Africa led to its expansion offshore and the implementation of its business model in other emerging market economies in both Africa and India.
Its extensive distribution network in South Africa embraces over 100 000 points of sale to which prepaid products are supplied on a daily, weekly or monthly basis.
The Blue Label Group intends to continue growing both organically and acquisitively. As a publicly traded company, BlueTel will be better placed to aggressively expand its operations both locally and internationally, it said.
- I-Net Bridge