BLUETOWN – BACKGROUND

BLUETOWN is a global internet and content service provider delivering innovative connectivity solutions in rural parts of the world, founded with a vision to make internet accessible and affordable for everyone.

Approximately 46 % of the global population does today not have access to the internet. In Africa the amount of unconnected people is even higher, up to 75 %. Without access to the internet, the population in these areas are cut off from the universal improvements the internet could bring them – job creation, eco-nomic growth, access to health care, access to education, information and education to farmers, connec-tion to friends and family etc.

There are multiple reasons for the high numbers of unconnected people globally, but the key barrier is the typical combination of low purchase power and lower population density in these areas – that makes it f nancially unattractive for the telcos to invest in infrastructure or infrastructure upgrades that could pro-vide the needed connectivity.

This is the key driver for BLUETOWN – providing robust, low cost, WiFi solutions that enables cheap, relia-ble and fast internet in semi urban, rural or remote areas of the world.

Based on this overall market opportunity, BLUETOWN defned in 2013 a strategy to address the global con-nectivity challenge – based on 4 principal anchor points :

• A for-proft approach as a key enabler for sustainable business and speed

• Low cost, solar powered Wi-Fi solutions for ensuring affordability for the end-users and the ability to deploy the installations anywhere on the planet

• A multi-country strategy to reach economies of scale

• Ensuring revenue streams also from other sources than the end-users to create even lower connectivity prices

Today, BLUETOWN is a market-oriented company based on already developed, highly advanced and proven technical solutions installed in Tanzania, Rwanda, India, Ghana, Mozambique and USA ; all achieved without compromising on BLUETOWN's overall goal of making a difference in the world by helping to cre-ate internet connectivity in third world countries.

BLUETOWN introduces innovative and economically efficient last-mile infrastructure. BLUETOWN’s solar powered Wi-Fi technology, including edge cloud solution, is robust and specially tailored for semi-urban, rural and remote areas. The competitive advantage lies in the fully integrated end-to-end solution and being involved in all parts of the value chain. Compared to the traditional telco model, BLUETOWN has its competitive edge, especially connecting rural areas, due to lower total cost of ownership.

BLUETOWN has an integrated content platform. While consumers in the target markets urge the same data consumption as seen in developed countries, they are unable to pay for it. Thus, BLUETOWNs inte-grated local cloud solution can store, facilitate and distribute heavy content access, in most cases free of charge.

In India, BLUETOWN has won several contracts, including a project covering more than 750 villages in Jharkhand State. The project demonstrated BLUETOWN’s ability to deliver a large-scale project.

BLUETOWN has in collaboration with Microsoft, documented that it can generate revenue on its own installations, and that this revenue develops positively even in a period marked by Covid-19 lockdown in Ghana. BLUETOWN has fnalized the plan for the coming years and is now ready to further scale the busi-ness in India and Ghana, while preparing for entry in new markets – Bangladesh, Nigeria and US, with Brazil in the horizon for planned entry in 2024. To enable the growth, BLUETOWN has a scalable fnancing model, which is favorable for the planned rollout and scaling.

BLUETOWN's permanent organization in Denmark, India and Ghana is adapted to the world we foresee in the coming years. The company is scalable as it cooperates as much as possible with local partners in the individual countries.

BLUETOWN is based on this working towards break even in 2023, via expansion of the ISP business and larger school projects in Ghana and other countries, tender bids and potential wins in selected markets, fur-ther expansion in India and fnally entry and commercial establishment in Nigeria.

BUSINESS OVERVIEW

BLUETOWN in Brief BLUETOWN is a global internet connectivity and content service provider to unconnected or underserved people, businesses and institutions in developing countries and some areas of developed countries – so-called “last mile connectivity”. BLUETOWN’s technology revolves around solar powered Wi-Fi tech-nology with cloud solutions that is adaptable and tailored for semi-urban, rural and remote areas. The technology & solutions are fully integrated into a commercially sustainable business model. The core of the business is based on deployment and operating BLUETOWN’s cost efficient solutions, own hotspots, and content services to end-users.

Vision BLUETOWN’s vision is to make internet accessible and affordable for everyone.

Mission BLUETOWN's overall purpose has remained unchanged since its establishment – “connecting the uncon-nected“ – to establish efficient, reliable and cheap internet in developing countries and thus create crucial new opportunities for a large part of the world's population in these countries. However, it has become clear during the ramp up of the company that developed countries also have large problems with stable and fast internet access in more rural areas.

BLUETOWNs company strengths BLUETOWN stands out from the competition based on following strategic strongpoints : • Large commercial scaling potential via a multi country approach.

• Full end-to-end, solar powered rural connectivity solutions – including Mechanics, HW, and all needed SW platform implementation ( billing, content management, networking monitoring etc. )

• A local cloud solution as key part of the BLUETOWN product range – and business strategy. The local cloud enables storage of content close to the end users, and thereby new revenue streams from busi-ness partners.

• Mature solutions – proven by years of operation in tough environments globally.

• Partnerships with strong industry players – Microsoft, SES, Google, UN among others.

• Dedicated business strategy around distribution of content e. g. eLearning, eHealth, eFarming or en-tertainment. Latest signed contract with Plan / Bornefonden on internet access and content distribu-tion in Ghana.

• Close alignment with UN global goals, thereby addressing the global agenda while building a strong business.

BLUETOWN’s work towards UN Global Goals BLUETOWNs mission is to make an impact through making connectivity available in rural and remote areas in developing countries like Ghana, Nigeria and India. By connecting people in underserved areas, BLUE-TOWN contributes to twelve of the seventeen Sustainable Development Goals, SGDs, of the United Na-tions. BLUETOWN’s mission of connecting the unconnected provides signifcant support towards reduced poverty, improved healthcare, improved education economic growth.

Figure 7 : BLUETOWN’s signifcant support of UN’s Global Goals

UNDP certified to measure impact BLUETOWN has in collaboration with UNPD Denmark, Monitor Deloitte and UNDP Business Call to Action, developed a methodology to measure impact and management of digital inclusion projects. The Impact Value Chain guide us in determining what to measure and where to collect data by mapping business goals, strategies, and operations against outcomes related to the Sustainable Development Goal. The Value Chain of this looks as follows.

Improved access to market information and digital finance services is a proven method to lift people out of poverty.

Online health resources, training and remote diagnostices are lifesaving tools for rural health care delivery

Online learning materials dramatically improves access to quality education

to those living in remote, resourcepoor areas.

Internet access improves productivity and could increase yearly individual

incomes in rural areas between $450 and $630.

Figure 8 : BLUETOWN´s Impact Value Chain

The Impact Value Chain allows BLUETOWN to monitor whether the Company are creating the impact expected and on what scale.

Strategy BLUETOWN considers own installations to be an important future source of revenue. In Ghana, BLUE-TOWN is collaborating with Microsoft, who provide a part of the funding, in a project to deploy 1000 hot-spots scheduled for completion in Q3 2021. In India another 1000 hotspots are already installed via a tender project with BSNL which is India’s National Telecommunications Company. The project strategies in the focus markets are diff erent in some ways depending on the characteristics of the individual market. An important feature for BLUETOWN’s choice of focus markets is the governments support and ambition re-garding connectivity for the population. Active policies and legislation that enables companies to enhance the connectivity leads to more potential tender projects and partners for BLUETOWN.

Tender projects in collaboration with global companies or public institutions are also an important source of revenue for BLUETOWN until the scaling of own installations has taken place. Therefore, in the short run, BLUETOWN is looking towards India and Bangladesh, as prioritized markets as they represent the largest tender projects in the current pipeline. The tender-based entry into these markets may also convert to ISP-structure with BLUETOWN operating and commercializing the infrastructure.

System sales will primarily be driven via BLUETOWN’s partners and distributor agreements and are thus a more traditional source of revenue.

BLUETOWN's Impact Value Chain

Insuffi cient ICT capabilities

Micro-operators are trained to be local digital change agents

Micro-operators run ICT capacity- building training sessions

Inclusive adoption and use of connectivity services

Bridging digital divides

Enabling higher standard of living

reducing carbon footprint of connectivity

Improved access to information, products and services

Air pollution and CO2 emissions avoided

Underserved communities are connected to green aff ordable and quality connectivity services

Increased awareness of relevant digital information sources, products and services

Cost savings on connectivity services

Off er aff ordable internet data bundles

Local digital content and services made accessible on LOCAL CLOUD

Solar powered connectivity infra-structure deployed in underserved com-munities

Lack of aff ordable connectivity services

No access to quality connectivity services

Limited awareness of relevant digital information sources, products and services

High CO2 emissions and local air pollution caused by diesel-powered connectivity infrastructure

Problems & Opportunities

Inputs /  Activities Outputs Outcomes Impact

Today, BLUETOWN has proven it’s ability to bid an win small, medium and larger scale tenders – and the ability to deliver on target and operate larger networks in multiple markets. BLUETOWN has also its ability to monetize own installed sites and meeting the topline revenue targets. The product range is mature, but the development and improvements of the products in continuing to keep the competitive edge. The frst revenue from distribution of content is now reveiced, and the company is investing in a dedicated senior resource to ramp up this global business unit. Finally, the company has built up strong teams in Denmark, India and Ghana, that forms a platform for growth.

BLUETOWN is based on this working towards break even in 2023, via expansion of the ISP business and larger school projects in Ghana and other countries, tender bids and potential wins in selected markets, further expansion in India and fnally entry and commercial establishment in Nigeria. This plan is the back-ground for the ongoing fundraising and IPO activity.

Business Model BLUETOWN has three business pillars :

ISP & Content represents the core revenue streams, supported by tendered projects and solution sales. BLUETOWN is transitioning from primarily doing solution sales and funded ISP project tenders to a full out ISP and content business with own installations. Solution sales and funded ISP are still expected to be sources of revenue and cash in the future, but the ISP business and content business are expected to be the primary forces for the continued growth in both revenue and cashflow.

BLUETOWN's own installations ( ISP ) are a scalable business that can be implemented globally in areas where existing internet connections are limited, expensive or both. BLUETOWN’s scalability revolves around introducing content that end users can access locally in high quality and high speed, at an attrac-tive price that the users in the local markets can afford. Therefore, BLUETOWN’s revenue streams comprise of revenue from end users and from content providers or third parties with an interest in distributing con-tent. Via adding content revenue as an additional income stream, BLUETOWN will become less dependent on end user payments, and can via this over time lower the prices further and thereby attract more end users.

BLUETOWN is providing/selling the i.e. material/hardware such as tower, Wi-Fi solution etc. or turn-key projects (incl. variousservices). Sometimes a managed service agreement is made, but that depends on the contract. This can both be as a tender process or a regular sales/purchase agreement.

Content revenue comes from ISP hotspots, from revenue sharing with content providers or as sponsored content revenue from for example iFlix, Netflix, Facebook, or governmental agreement covering for example education material.

BLUETOWN deployds a connectivity hotspot to generate revenue from end-users, SME's, schools, clinics and public offices. The data is sold in prepaid packages varying in sizes. The ISP projects can be funded fully or partly by 3rd parties (e.g. governments, EU funds, World Bank, tech giants).

ISP

Content

Solution Sales

The ISP business is dependent on having a license to operate – either own license or via utilizing a business partners license. BLUETOWN is using both approaches – in Ghana the company has a national license that is renewed annually at a low fee. In India, the license of BSNL is utilized.

All potential content providers ( customers, incl. public / civil or commercial content providers ) will be as-sessed as per the Content Policy prior to being allowed to publish content on the local cloud. BLUETOWN is following strict criterias in this process :

Organisations that operate within the following sectors are not allowed on the LOCAL CLOUD :

• Tobacco

• Narcotics

• Sex-related industries

• Weapons manufacturing

• Illegal* products and services

*In accordance with national and international legislation, whichever is the most restrictive

Organisations that distribute the following types of content are not allowed on the LOCAL CLOUD :

• One-sided political agitation

• Discriminatory content, re. race, ethnicity, gender, sexual orientation, disabilities, age, etc.

• Content instigating violence

• Misleading information and fraud

• Content disregarding relevant copyrights

Solution BLUETOWN's Last mile solutions are developed to be scalable, easy to deploy, robust, cost-effective and support all business models in BLUETOWN, meaning that solutions for the BLUETOWN markets and cus-tomers can be made out of the same product base. The solutions aim to address the overall problem of connectivity in semi-urban, rural and remote areas where BLUETOWN operates.

In the areas where BLUETOWN provides access to the Internet and local content, the power grid is often unreliable or non-existent. When the power supply is unstable, the end user experiences poor service, and the installed hardware is at risk of being damaged. Furthermore, it is too expensive to establish a stable grid power solution for traditional ISP equipment due to the extensive power consumption of the equipment. BLUETOWN has developed a solution with low power consumption and the Company’s solar-powered electricity solutions are cost-effective and ensure high uptime for BLUETOWN's networks.

Furthermore, internet backhaul availability is often an issue in the BLUETOWN markets. BLUETOWN's solu-tion can be integrated with both traditional wired Internet backhaul, radio links and with satellite ( high or low orbit ).

Products, services and deployment BLUETOWN has three main products which are described in further detail below namely, BLUETOWN Reach, BLUETOWN Umbrella and BLUETOWN Explorer. Local cloud can be connected to all three prod-ucts and each product exist in several variants with different confgurations in order to support the many different requirements of a network. BLUETOWN also offers services in relation to commercialization of the networks, such as billing and payment services.

BLUETOWN UMBRELLA is the most widely used solution for building larger ISP networks as it covers an area of 10-15 km around the tower making Internet backhaul available. UMBRELLA can connect up to 200 Wi-Fi Hotspots. UMBRELLA is installed in India, Rwanda, Mozambique and Ghana – and is the main solu-tion in the Ghana project which BLUETOWN deploys in partnership with Microsoft.

BLUETOWN REACH is used for remote locations where a satellite connection is the only possible Internet transmission solution. The system is sold as an “out of the box” solution, where a few hours after unpacking, the customer have set up the solution and have an active Internet connection.

BLUETOWN EXPLORER covers areas in need of a stand-alone, efficient Wi-Fi Hotspot and typically uses radio chains for Internet backhaul connection. This solution has been installed in e.g. Tanzania and in a large India network where 782 villages in the state of Jharkhand were connected to the Internet.

BLUETOWN REACH BLUETOWN EXPLORER

BLUETOWN UMBRELLA

In addition to these products, BLUETOWN offers a range of other products including broadband solutions for home and businesses, solar powered lamp posts with built-in Wi-Fi, and solutions that allow educa-tional institutions to offer Internet services to selected students and staff.

Internet services As an internet service provider ( ISP ) BLUETOWN generates income from deployed hotspots by selling internet access data packages to end-users among the addressable population. Data is sold in packages that can be used to access the internet hotspots using any Wi-Fi enabled device, e.g. smartphone, tablet or laptop within the range of the hotspot location. The data packages are sold in daily, weekly, and monthly packages of varying volumes to accommodate different needs from different customers. In addition, BLUETOWN offers Home broadband solutions or solutions for schools, universities and small businesses, where customers typically pay a monthly fee.

Content services – Local Cloud BLUETOWN’s Local Cloud provides an affordable access to digital content and services at no data cost for the end-users. The system is built on letting digital content providers upload content to a central server, from where the content is distributed to Local Could in the various communities.

Local Cloud gives end-users a cheaper and easier access to selected content ( e. g. entertainment ) – even during periods when the Internet is not available. BLUETOWN’s local cloud service also enables govern-ments, NGOs, and companies to distribute data heavy content to an unlimited number of rural communi-ties. The content ranges from eLearning, eHealth and eGovernance to news and entertainment.

BLUETOWNs network and services involves central datacenters. These datacenters are hosted by Micro-soft ( Azure ) and Amazon ( AWS ). In these datacenters all essential services reside, being Content distri-bution systems, Billing systems, Network management and monitoring systems. BLUETOWN network, services and related data are protected using industry practices, policies and guidelines, to best avoid the systems and data from being compromised.

Product development, deployment and operations BLUETOWN products are developed in the R&D located in headquarters. The products are developed based on extensive experience from the feld in the markets were BLUETOWN operates. Products are de-veloped and integrated by BLUETOWNS own skilled engineers in cooperation with specialist partners in various technology felds. This is to keep the internal team slim and ensure BLUETOWN stays competitive in the various technologies used.

Whether BLUETOWN deploys solutions for its own ISP networks or as part of a project sale to a customer, ( e. g. a tender project ) BLUETOWN are able to handle the process end-to-end from initial Design to Instal-lation and Commercialization. BLUETOWN has adapted and implemented the PRINCE2 framework for project management, and through that ensures a professional project handling, e. g. handling of risks which requires special attention looking at the markets where BLUETOWN operates, which among more involves considerations on political stability and security levels in the country. To avoid theft and vandalism during deployment or operation, BLUETOWN works closely with local authorities, village chiefs and mayors and the local citizens to ensure support for the installation of internet equipment.

Supply chain management is an integral part of product development and project deployments. BLUE-TOWN works from a supply chain strategy to recue number of single source components and suppliers to a minimum.

For project sales BLUETOWN can offer full managed services for all of the deployed installations, to guar-antee network uptime and delivery of internet including end-user services like billing and payment.

Network Service and Support can include 24 / 7 operations and network monitoring, preventive and run-ning maintenance.

Partners Microsoft BLUETOWN's most important partner is Microsoft. The “Airband team“ ( focusing on connecting the un-connected ) at Microsoft reports to Shelley McKinley, VP at Microsoft, and is thus anchored at the top level of management. Microsoft has announced their initial ambition to connect 40 million people to the Internet by the end of 2022 and the full work must be done by partner companies. BLUETOWN and Mawingu Net-works is the two companies identifed as Microsoft's core partners in this feld in Africa.

The partnership with Microsoft means that BLUETOWN can draw on their technical, commercial, and polit-ical resources in many contexts. This means, among other things, that BLUETOWN and Microsoft are work-ing together on the development of the technical elements of the next generation ISP network. Financially, Microsoft typically supports BLUETOWN’s projects with 25 % of CAPEX and two years of OPEX, which is delivered as a grant with a revenue share agreement. Microsoft has contributed a total of 2,4 MUSD to the rollout of the projects. The common ambition is to expand the markets with projects in Nigeria, USA, and Brazil, starting with Nigeria at the end of 2021. In addition to the project collaboration, BLUETOWN has a close technical collaboration with Microsoft's development departments within cloud, data warehouse and data center architecture and solutions.

SES BLUETOWN has a distributor agreement with SES S. A., a Luxembourg based company listed on Euronext Paris stock exchange and, one of the world's largest satellite companies. The agreement includes the possi-bility of selling BLUETOWN's equipment via SES'sales and project channels with agreed prices and profts. At the same time, the agreement includes the opportunity to sell SES'internet capacity via BLUETOWN projects, again with agreed prices and profts. In addition to the distributor agreement, opportunities for joint projects where it makes sense, with the combination of products and services, are regularly discussed. For example, one of Ghana's villages becomes connected with BLUETOWN's last mile equipment and SES's satellite connection. When this specifc business case proves to be proftable, the next 200 cities will be looked at together with SES, which will then have the same solution.