8/27/2015this information is confidential and belongs to global technologies investment, inc. brief...

04/21/23 This information is Confidential and belongs to Global Technologies Investment, Inc.

Brief Overview on the OiPAGGO Operation

Disclaimer: The information written in this report is only intended to be used by the Oi Executive Team and the McKinsey Consulting Company. GTI, Inc. has tried to ensure that

the information in this document is correct but does not accept liability for errors and omissions

04/21/23 This information is Confidential and belongs to Global Technologies Investment, Inc.

Introduction

Our company was invited by McKinsey & Company Group to share our experiences with their client, OiPAGGO.

On May 8th, 2008; we visited Oi and shared our vision on developments in the m-Payments industry.

By request of Mr. Joao Silveira, COO of Oi, we are writing this document with an external vision of the OiPAGGO situation and business model.

We focused on two main areas: Business Model and Technology.

04/21/23 This information is Confidential and belongs to Global Technologies Investment, Inc.

Agenda:

Business ModelCurrent Business ModelIdeas for the Future

TechnologyCurrent Technology and Suggestions

04/21/23 This information is Confidential and belongs to Global Technologies Investment, Inc.

Current Business Model:The credit system that was put together

by OiPAGGO is unique and extremely innovative. We have not seen any other m-Payments operation with a “credit line”

The system currently takes advantage only of the traditional credit users.

OiPAGGO should try to reach to a significant share of the pre-paid market.

04/21/23

What we think is missing….M-Bill payments Paying utilities and recurrent bills on

the go (electrical, water, phone). Bill triggers a m-Payment application

and user authorizes it. Verifies identity, PIN, etc.

SMS confirming transaction. Available online to print. REVENUE: Per transaction fee (biller),

OiPAGGO loan. This is working in: U.S., Europe, Asia,

Africa.

m-POS (PL HUB)

P2P

m-Remittances Ability to charge credit/debit cards with

a cell phone. Cash based services can collect money

from CC (Oi, Private Label, Visa, MC, AMEX, etc) PL HUB Concept

TARGET: Sales Teams of door to door, multilevel marketing, taxi, street vendors.

REVENUE: Per transaction fee, OiPAGGO loan, mobility commission (0.5% to 3%).

This is working in many places with proprietary hardware (Zebra, Windows Mobile, etc.)

When two cell phones interact between them: OiPAGGO loan, Pre-Paid, m-Wallet, Bank Accounts.

New ecosystem develops. MONEY never leaves the master account.

REVENUE: Per transaction fee, OiPAGGO loan

This is working in: U.S., Europe, Asia, Latinamerica. Obopay, PayPal Mobile.

Local and International remittances. Vast capilarity of payment points. Integration with Global Remitters

(Transfer Orbit) REVENUE: Per Transaction fee,

ecosystem for P2P, money exchange.

This is working in: Philippines, Kenya, Middle East, Latinamerica. SMART Padala, MPesa, Vodafone, G-Cash (Global Telecom), Citi, GSM Association-Western Union, etc.

GTI: MHS m-Remittances module is ready-to-use.

Integration with Global Remitters (Transfer Orbit) and other future remitters connected abroad.

Customization and Integration We have it in: Transfer Orbit***in the

U.S. OI: Agreement with bank to comply with

remitters law. Promotion and Advertisement

* Fully integrated but not commercially launched** Fully integrated and working under pilot*** Process of integration

What we can offer and what Oi needs to do:M-Bill payments GTI: MHS m-Bill module is ready-to-

use. Customize middlet for Brazil billers. We have it in: Produbanco-Ecuador,

Banco Nacional de Costa Rica*. OI: Agreement with bank to hold

money. Agreement with bill payment services

(same bank) Promotion and Advertisement.

m-POS (PL HUB)

P2P

m-Remittances

GTI: MHS P2P module is ready-to-use.

Customization and integration. We have it in: Banco Fin Comun

in Mexico**, Produbanco* in Ecuador.

OI: Agreement with bank to hold the money.

Promotion and Advertisement commercials that you already have!

GTI: MoviPOS system is ready-to-use. Customize middlet (s) for one or various

cards. (Oi, VISA, MC, Private Label, etc) PL HUB Concept.

We have it in: Datafast*, Medianet***, Diners Club***and Yanbal in Ecuador, ATH and AlignNET**in Costa Rica/Peru.

OI: Agreements with issuers/companies. Trust account or Bank to hold money

Promotion and Advertisement

Assessment and SuggestionsAssessment of current technology

The communications channel primary used between the mobile application and the servers is  SMS which is not the best option, there have been random delays (18% transactions > 50 sec) and low throughput, it should be replaced with data channels where available.

1

Software Platform must be re-designed.Too many requests to servers for approvals (now up to 6 sms vs. 2 data request/approval)Time and completion rates are far below any reasonable standard. (55sec vs. 15sec).

2

Hardware implementation is not stable, prone to failures and not fault tolerant. It suggests weak integration

3

GPRS, EDGE, UTMS Use SMS only as fallback in case of

absence of data connection. Do not use SMS as primary option. Only

backup.

Suggestions

Use standard high end tools to develop applications (Open Architecture).

Don’t use custom made databases or programs. Use commercial tools, available in the market, easy to adapt, to change, support and to maintain.

Reengineer the hardware systems. Reengineer the software system and integration among them.

Turn key systems may speed up the process and cause less impact.

Tech Support and monitoring has too many entities responsible of the operation. (M4U-Paggo-Oi). Don’t do manual propagation of failures.

4 Concentrate all processes under one tech team. Do not use “shared responsibilities”

Unify tech operations management and trouble ticket handling process under a central authority. Automate process.

5 Adopt security standards that are being used in other markets. Ex. Encryption, tokens, etc.

Security in transactions must be enhanced.

BACKUP

BACKUP

M-Bill Payments and Notifications of New BillsRETURN

M-Bill Payments and Notifications of New BillsRETURN

P2P: Produbanco Ecuador

RETURN

TOKEN SYSTEM, NOW INTEGRATED IN MicroHUB and MoviPOS.

RETURN

Diners Club and Tokens (Transaction above $1,000)

Security: Enhanced Token Generator built in MicroHUB and MoviPOSRETURN

Diagram of Connection of MoviPOS with a VISA, MC, AMEX and Private Label credit/debit cards processor.

RETURN

Capture of phone screens in MoviPOS mode operating with credit cards (Private Label HUB Concept)

RETURN

Peer to Peer Payments: Fin Comun-Mexico

RETURN

P2P: Fin Comun Mexico

RETURN

m-Bill Payments in Europe RETURN

OBOPAY.- CitiRETURN

SMART PADALARETURN

G-CASH - CitiRETURN

GSM World Association-Western UnionRETURN

m-Bill Payments: ProdubancoRETURN

m-Bill Payments: Banco Nacional Costa Rica:

RETURN

m-Remittances: Transfer OrbitRETURN

Diagram of Connections between MHS-Mobile Operators-Banks-Processors

Diagram of Connections between MHS-Banks-Processors DETAIL