Hi Elisse,

Here is my report for our local telecom company regarding whether or not they should explore the
idea of "Handset leasing" for the client . My recommendation is that they should proceed within
this scope because it would be a profitable business idea in terms of everything

Below are the reasons why I recommend this move:

Regarding Competitors within the market :

Competitors [Singtel and SKT ] have introduced the handset leasing and done well:

 25% of SKT's new customers opting to rent and 28% of SKT subscribers in theri 20s
chosing to lease

 the take rate of Sprint’s leasing plans reached ~43% [ from ~$3.3 billion during fiscal
3Q15 to ~$4.5 billion at the end of fiscal 3Q16]

 StarHub would benefit from savings of ~S$25m in lease expenses on the HFC network in
FY20F (5% increase from their current forecasts).

Regarding Consumers:

Allowing customers to benefit from being always with the latest and greatest technology( pay
bills, report problems,..)

=>entering into the next stage of the consumer digital lifestyle( Data-driven)

Regarding the cost :

 SKT’s monthly rental fees are also substantially lower than purchasing a premium phone
with a contract plan.

 Singtel said its rental programme is designed to “make premium handsets more
affordable” and is available to customers on SIM-only plans.

=>In terms of cash outlay, the customer pays about 50 per cent less over two years for a
mobile plan and a rental .

So in the light of these considerations/reasons : our local telecom can expect a profit and
should consider moving forward with this investment.
Sources :

1. Institutional Knowledge (InK) at Singapore Management University, Transformation of

Globe Telecom

2. Blog, Are smartphone rentals value for money?

3. Market Realist, Why Sprint Is Focusing on Handset Leasing to Accelerate Growth

4. DBS Group Research, Singapore Industry Focus – Telecom Sector