Hello Elisse,

Here is my report for our client company: TelecomX regarding whether or not they should expand their
product offerings to include introduction of handset leasing. My recommendation is that they should
proceed with renting new phones because it will reduce company’s inventory and reduce phones’s
financing costs which in turn improve profitability.

Below are the reasons why I recommend this move:

Customer preferences
● Our research showed that our customers in the Singapore region have shown increasing liking
for rented phones for they do not have to pay the total cost of phone upfront.
● Industry-wide renting of phones have gone up by ~43% 1

Competitors have introduced similar strategy and done well

● Sprint and AT&T have already introduced leasing.
● I found that our main competitor, Sprint, had introduced a two-for-one deal enabling users to
pay $31.25 per month.
● According to their financial report, their plans reached 43% 2. This is significantly greater than our
growth .
● Further research showed that this growth could be attributed to their new products in 5g
because their growth rate showed a clear spike just this year.

Cost and Profitability

● We can increase our revenue by increasing customer base.
● We can also reduce our inventory in trade for renting phones.
● The phones returned can be sold as refurbished at lower costs which will ultimately gives total
revenue per phone as refurbished price plus renting price.
● The cost of refurbish we have to bear.

In conclusion, looking at the 3 points above, our hypothesis is that this should be a profitable business to
venture into.