REPORT

The telecom industry is projected to contract by 4% annually between 2018-22. Handset leasing meets
consumer needs by offering frequent handset upgrades and lower overall costs. Competition from MVNOs is
forcing the hand of incumbents. Offering handset leasing to SIM-Only customers is estimated to reduce net
losses in revenue from 54% to just 5%. Leasing is a trade-off that lowers the initial cash outlay needed for
equipment in return for monthly payments and an agreed buy-out ‘residual price’ at the end of the lease.
Leasing means higher ARPUs over the life of the contract, both via a financing premium and lower churn rates
during the lease.
Criteria that customers may use to evaluate competing offers are :
• Keenness in leasing a handset based on interval of upgradation
• Upgradation fees
• Upfront cost
• Insurance
• Trade-in
Data points that would help us decide if the new offer is attractive to consumers are :
• The frequency of upgradation of handsets by customers based on the cost of upgradation.
• The upfront cost which is the most important deciding factor while deciding what phone to buy.
• Change of telco provider for a saving.
The following can be inferred from the evaluation matrix :
•The upfront cost is the most important criteria with the maximum weightage.
•The frequency of upgradation of handsets by customers based on the cost of upgradation plays an important role while
selecting a plan.
•Therefore, based on this, the target segment should be people below the age of 30 years.
The changes that should be incorporated are :
•Upgradation costs should be reduced in order to attract more customers.
•The talk time limit should be increased for leasing plans.

Leasing effectively removes the upfront cost barrier that may have delayed a purchase, or even prevented the purchase at all.