Despite tougher operating conditions brought about by global economic downturn, Blue Label Telecoms has demonstrated continued growth, with the demand for prepaid services remaining resilient.
Blue Label released its annual results today, revealing a 18% increase in revenue and 16% growth in net profit for the year. The company's South African distribution contributed 92,9% of revenues.
"Blue Label's ability to quickly deploy a pre paid platform into the market has been an important advantage," says Frost & Sullivan senior ICT industry analyst Lindsey Mc Donald. "This is especially true when combined with the fact that it has ensured that it has in-depth domain knowledge in order to effectively sell into various vertical sectors."
Blue Label has set itself up as a holding company that is parent to a collection of various industry niche players that are specifically focused on certain vertical sectors.
"The company has manufactured a horizontal network that can be used in a variety of vertical applications," Mc Donald explains. "Key to its success is the fact that it has recognised that each vertical sector requires a specialised sales approach."
There are a host of applications that the company could provide into various markets and this is limited only by the imagination of the markets in which the company operates. Unfortunately, at times, it is difficult to convince government and regulatory authorities of the potential applications for these products.
"Blue Label's presence in emerging markets also means that it is vulnerable to economic volatility," Mc Donald warns. "This could be a key area of concern for them moving forward. Despite the fact that there are some indications that the global economy is on the road to recovery, there is still undoubtedly a long way to go."
The company has already achieved critical mass in terms of the development of its platform, so its research and development costs should be minimal going forward. It is now able to focus solely on selling its solution into the market place while just maintaining development spend at a level that keeps its product technologically ahead of the market.
"Blue Label is already present in most emerging market regions globally," Mc Donald says. "It has experienced good growth in India and Latin America and would be expected to consolidate its position in these markets moving forward."
Frost & Sullivan expects to see the company put a greater focus on the rest of Africa as mobile operators move aggressively into this market. As there is also a well-established prepaid culture on the continent, Blue Label is likely to benefit from involvement in other prepaid applications as well.