The brothers who went from selling car radios to building a R5 billion business empire

Brett and Mark Levy went from selling electronics like car radios from a car boot in high school to building a prepaid empire in South Africa.

The Levy brothers grew up in Delmas on the East Rand of South Africa. They were born four years apart, with Mark being the oldest, born in 1971, while Brett was born in 1975.

The brothers describe their upbringing as modest, but their lives took a tragic turn with the passing of their father when Mark was eight and Brett had just turned five.

The impact of this loss was profound and instilled in the brothers a strong sense of independence and responsibility from a young age.

Reflecting on that period, Mark Levy told TechCentral, “It forces you to do things differently, to fight your own battles, and to rely on each other more.”

This is also why, despite the occasional sibling rivalry, the brothers have established a unique partnership grounded in mutual trust and a verbal agreement made years ago to share everything they built as equal partners. 

This trust-driven partnership laid the groundwork for what would later become several successful business ventures.

The pair’s first ventures happened at a young age. While still in high school, they started selling televisions, hi-fi sets, car radios, and other electronics from the boot of their car.

This initial venture soon expanded into insurance replacements and consumer electronics distribution, setting the stage for what would later become Blue Label Telecoms. 

The brothers leveraged their distribution network and industry connections to position themselves as major players in prepaid services.

A pivotal moment came in 2001 when Telkom awarded Blue Label a national contract to distribute prepaid airtime for fixed-line services. 

This opportunity allowed them to build a vast distribution network that attracted other major players, including Vodacom, MTN, and Cell C, just as South Africa’s cellular market began to soar. 

Their idea was to replace physical scratch cards with a streamlined electronic distribution system, which would reduce logistics costs, eliminate pilferage, and simplify merchant inventory management.

The brothers have said the journey to establishing this innovative electronic system was not without obstacles. 

Initially, mobile operators couldn’t supply Blue Label with the necessary electronic pins, forcing the brothers to use physical prepaid scratch cards instead. 

As the network grew and its system gained acceptance, Blue Label expanded its offerings to include electricity and water vouchers, starter packs, prepaid data, and ticketing. 

This evolution allowed them to establish a national presence and reach diverse customers through a unified platform.

Blue Label attracting Microsoft investment

Their success through these obstacles did not go unnoticed. In 2007, six years after its official launch, the company went public on the JSE, attracting the attention of global giants like Microsoft. 

Microsoft took a minority stake in Blue Label, putting the company on the global map. While the tech company eventually disinvested due to shifting strategies, Mark told TechCentral that this deal “opened a lot of doors for us”.

Blue Label’s growth trajectory extended beyond South Africa. The company launched operations in India and Mexico, aiming to replicate its prepaid model in emerging markets with similar demand dynamics. 

Blue Label Telecom Mexico, for instance, quickly expanded to over 4,000 points of presence within a year and a half, demonstrating the scalability of their model. 

Though Blue Label eventually sold its stake in the Mexican venture to co-shareholder Grupo Bimbo in 2020, the experience solidified its reputation as a global leader in prepaid services.

The brothers’ approach to growth and acquisition has been consistently ambitious. After listing on the JSE, they pursued acquisitions like Viamedia and RMSC, which strengthened their footprint in digital content and added value to their existing distribution channels. 

By 2016, Blue Label’s market cap had reached an impressive R19 billion, a clear indication of its influence and continued potential for expansion.

Some strategic missteps and questionable investments in the years since have seen the company’s share price drop to around R5 billion.

However, the Levy brothers’ impact on South Africa’s telecommunications industry is undeniable, and today, Blue Label Distribution is the largest distributor of prepaid e-tokens of value in the country.

The Levy brothers remain the company’s joint CEOs. Mark also serves as a director of various Blue Label companies and is integral in spearheading the execution of Blue Label’s growth strategy, integration of acquisitions, and development of the IT architecture.

Brett also currently serves as a director of various Blue Label companies and plays a key role in developing Blue Label’s strategy and commercial negotiations.

Blue Label Telecoms’ name

While Blue Label Telecoms is well known in the South African business market, not many people know the story behind the name.

The company started as “The Prepaid Company”. During this time, the Levy brothers started a tradition that has lasted to this day.

Every time they made a deal, they opened a bottle of Johnnie Walker Blue Label, wrote the details of the deal on the back of the bottle, and signed it.

This sparked the idea of using the name “Blue Label” for their company, as it is an aspiring brand that suits the business.

Most people thought registering the name would not be possible 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, which 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,” he said.

Levy 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”.