Smart Axiata Confidential

Smart Axiata Confidential

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Smart Axiata Confidential 11/26/2013

MOBILE OPERATORS CAN PLAY IMPORTANT ROLES IN THE DIGITAL EMPOWERMENT OF SOCIETIES AND PEOPLE.

FLEET MANAGEMENT AND TRANSPORT – manage fleet in real time

POINT OF SALE– Quick and easy payment method

SECURITY AND SURVEILLANCE – Remotely monitor security systems

M-Health – Wireless products for the medical markets covering Bluetooth, WLAN and 3G plus a complete web portal platform.

TELEMATICS – Access and transfer information to vehicles

VENDING AND RETAILS –Monitor vending machines in real time

METERING AND MONITORING –Industrial automation and monitoring solutions

EMERGENCY SERVICES – Voice and data communications when every second counts

PUBLIC TRAFFIC SYSTEM –Monitor major roadways, public transport systems and cities

DIGITAL SIGNS– Manage digital signs and public information displays to keep them relevant and up-to-date

“Leadingmobileoperators areventuring intoverticalmarketsbeyond voice,SMS/MMSand Internet”

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Smart Axiata Confidential 11/26/2013

Traditional financial services providers in Cambodia, NBC (2013)

LEVERAGING ON ITS UNIQUE ASSETS, MOBILE OPERATORS CAN PROVIDE SEAMLESS AND SECURE MOBILE MONEY EXPERIENCE.

Ubiquitous mobile coverage.

High penetration of feature phone and growing adoption of smartphones.

Extensive networks of distributors and dealers available beyond typical business hours.

We have the consumer

trust.Interoperability – proven deployment Secured.

Locally relevant, user-friendly interface and Khmer unicode. Lower

transaction fee.

Smart Axiata Confidential

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Smart Axiata Confidential 11/26/2013

ALTHOUGH THERE ARE 123 DEPLOYMENTS LED BY MOBILE OPERATORS, MOBILE MONEY DEPLOYMENT IN CAMBODIA IS BEING LED BY THE BANKS, REDUCING ITS REAL POTENTIAL.

Global 188

Banking and Finance52

MNO123

Products Offering Global MNO Led Banking & Finance Led

P2P Transfer (Domestic) 172 91% 116 94% 45 87%Airtime 161 86% 113 92% 38 73%Bill Payment 132 70% 95 77% 30 58%Other bulk payment 69 37% 53 43% 13 25%Merchant Payment 67 36% 47 38% 16 31%Link to Other banking products 31 16% 12 10% 16 31%International Remittance 25 13% 16 13% 7 13%Loan disbursement or repayment 14 7% 8 7% 4 8%

G2P 8 4% 5 4% 3 6%Mobile Micro Insurance 6 3% 2 2% 3 6%Total Deployments 188 123 52

CambodiaCambodia

Mobile Money deployment in

Cambodia2 (Acleda and WING)

Source: GSMA (2013)

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TELCO-LED MODEL IS A PROVEN MODEL, HAVING BEEN IMPLEMENTED IN SRI LANKA BY OUR SISTER CO.

• Award winning innovation known as Ezcash.

• Operate under Mobile Payment Guidelines issued by Sri Lanka’s Central Bank.

• Partnership with one of the domestic banks to safeguard customer funds.

• Leverage extensively on existing telecom channels e.g. USSD, STK, Brand & Marketing, Distribution, Platform, and licenses.

• Proportional KYC, allows for self-registration and agent based registration.

Smart Axiata Confidential

Financial Services

Deposit

Loan

Remittance

Bill Payment

Payment-Commerce

Cards

HomeHome

SmallSmall

LargeLarge

EmergencyEmergency

DomesticDomestic

Int’lInt’l

Monthly PaymentMonthly Payment

Down Payment

Down Payment

InsuranceInsurance

OnlineOnline

OfflineOffline

Cr/DrCardCr/DrCard

ATMATM

SavingSaving

CurrentCurrentFixedFixed

Bank

MFIThird Party Processor (WING)

Others (Post Office, Bus Transportation, Money Exchange Shop, etc.

BranchesAgents

ATM

Internet Banking

M - Banking (USSD)

POS

Access Channels

UNFORTUNATELY, CAMBODIA MOBILE MONEY DEPLOYMENT IS DRIVEN BY TRADITIONAL BANKS.

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Smart Axiata Confidential 11/26/2013

WE NEED TO ACCELERATE THE REFORM INITIATIVES TO ENABLE TELCO-LED MOBILE MONEY DEPLOYMENT.

Areas Key highlights of Prakas on Third Party Processors, August 2010

Scope • A communication facility • Inter-bank clearing facility • Managing / operating Bank’s customers account• Supporting sending/receiving payment orders • Mobile money remittance or other means • Clearing and settlement of debit and credit payment

Additionalscope

• Payment transactions and cash withdrawals service• Clearing and settlement for instruments of domestic and foreign payment in Cambodia • To be read together with Prakas on Payment Clearing Systems, Prakas on Control of

Systematic Risk and Prakas on Operations of Settlement Account

License term • Application fee Riel 2ml (USD500)• Annual license fee Riel 10ml (USD2,500)• 3 years

Obligations • Onerous and mandatory to partner with a Bank – act as a partner to the bank

Other potential legal/regulatoryissues

Additional remarks

Specific regulation on m-payment or electronic transfer is needed

• E Commerce Law, Law on National Payment System, Prakas on Standards for mobile phone messages, e Cash and e Wallet is still pending (Financial Sector Development Strategy 2011-2020)

Obligations imposed by existing legal instruments are not proportionate with size of the business

• Current obligations as per above is similar to the Bank, creating a barrier to entry for new entrant.

• Forcing new entrant to collaborate with Banks rather than building new platform.

• Introduce new retail payment

instrument i.e. E-Wallet / E-cash.

• Promulgate E –Commerce Law to facility online

and mobile transaction.

• Initiate licensing process and

guidelines i.e. AMLA, KYC,

standards for telco-led mobile

money deployment.

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Smart Axiata Confidential 11/26/2013

> DISCUSSION.> QUESTIONS? > ANSWERS. > NEW PERSPECTIVE?

Smart Axiata Confidential