Blue Label Telecoms is one of South Africa’s most successful technology companies and is a global leader in prepaid products and the electronic distribution of virtual merchandise.
The company was founded by two brothers – Mark and Brett Levy – in 2001, but the story behind Blue Label Telecoms really started four decades ago in the small town of Delmas.
The Levy brothers had a modest but happy life in Delmas, with an “amazing lifestyle, riding your bicycle without a care in the world”.
Tragedy struck on 10 September 1980 when Mark and Brett lost their father while they were still young.
The sudden death of their father forced the Levy brothers to become more independent while they were still very young, and they developed a strong bond.
The need to fend for themselves from a young age and their entrepreneurial spirit helped them to launch various businesses while still at school.
They started selling car radios, televisions, and other electronic equipment, and Brett ran raffles twice a year during his high school days.
“If it wasn’t bolted down, we sold it. If we saw a gap, we would take it,” Brett said.
In the nineties, they built a strong electronics distribution business where they used parallel imports to gain a pricing advantage in the South African market.
The brothers got into the telecommunications industry after they won a Telkom tender to supply prepaid phones across South Africa.
At the time, prepaid airtime was only bought and sold through physical cards and the Levy brothers saw an opportunity to digitise this business.
They created an electronic top-up pin system which rapidly gained adoption thanks to its convenience and effectiveness.
The new system was not without its challenges. Initially, the mobile operators could not supply them with electronic pins and they actually had to buy prepaid scratch cards to get pins to use for their new electronic distribution platform.
After these early challenges were resolved, they started to rapidly grow their prepaid airtime point-of-sale devices to numerous merchants around the country.
Armed with a national presence and an innovative prepaid platform, they expanded into many new industries. These included electricity and water vouchers, starter packs, prepaid data, ticketing, and financial services.
This strategy paid off. Their transaction volumes grew to over 5 billion per year, peaking at over 4 million sales per day.
Six years after its launch, Blue Label Telecoms successfully listed on the Johannesburg Stock Exchange (JSE).
Over the next decade, the company showed strong growth with its market cap exceeding R19 billion in 2016.
During this period Blue Label Telecoms concluded a few prominent acquisitions, including Viamedia and RMSC. It also built significant operations in India and Mexico.
In August 2017, Blue Label signed its biggest deal yet by acquiring 45% of Cell C in a large recapitalisation and turnaround plan.
Last year Blue Label Telecoms disposed of its interest in Blue Label Mexico to its co-shareholder, Grupo Bimbo to refocus its efforts on its South African distribution businesses.
Apart from its success in the prepaid voucher market, Blue Label Telecoms is also known for its sports sponsorships and philanthropic endeavours.
Mark and Brett Levy have a deep love for sport and are accomplished sportsmen in their own right.
They recall playing soccer, cricket, and rugby in the garden as young kids and went on to captain their respective first team rugby and cricket teams in high school.
Their love for sports was behind Blue Label Telecoms’ generous sponsorship of many sports teams, including the Proteas T20 cricket team in 2012 and the Springbok rugby team in 2016.
The Levy brothers also grew their charitable activities and launched the Trust Blu Foundation in February 2020.
The foundation aims to reduce unemployment and inequality of opportunity in South Africa by enabling informal, micro and small enterprises to grow.
It leverages Blue Label’s technology, expertise, and reach to help non-profit organisations and social enterprises to amplify their impact and facilitate economic inclusion.
While Blue Label Telecoms is well known in the South African business market, not many people know how it got its name.
When the company first started it was known as “The Prepaid Company”.
Brett Levy explained they worked very hard during the early days of starting the company, which included many 18-hour days.
During these days they started a tradition where every time they did a deal, they would open a bottle of Johnnie Walker Blue Label, write the details of the deal on the back of the bottle and sign it.
This sparked the idea of using the name “Blue Label” for their company as it is an aspiring brand which suited the business.
Most people thought it would not be possible to register the name as it was too closely linked to Johnnie Walker whiskey.
They decided to register the name anyway, expecting to receive numerous complaints. This did not happen.
“We only had one complaint with the name Blue Label, and that was from Blue Label Marie biscuits,” Mark Levy said.
“How we settled is that we promised not to bake, and they promised not to sell airtime.”
Mark said everyone now wants their name immortalised on a bottle of Blue and it has become a phenomenal tradition.
“Wherever we go in the world and wherever we do a deal in a foreign country they say – ‘We heard about your tradition and we are drinking a bottle of Blue Label’,” said Mark.
Their response is always “Game on”.