Hello Elisse,

Here is my report on the analysis on the impact of handset leasing companies’ revenue and profit
and exploring whether it is a smart business model or not. The companies I have researched upon
are : Rentomojo, SK TELECOM and Singtel. My recommendation is that one should proceed with the
model as smartphone is the primary consumer electronics device by revenues and units, and its
second hand market is a significant market in its own.

Below are the reasons why I recommend this move:

Changing customer preferences

 According to the research people are moving towards the trend of renting or leasing the
smartphones and updating them when required.
 Also, almost every company which has been involved in the handset leasing has seen huge
increase in their revenue.
 Rentomojo business grew 3 times from 35.5 crore in FY18 to Rs. 107 crore in FY 19. They
predict to that about 40% of their revenue will be generated by the handset leasing model
by 2021.
 According to a report by Delloitte the growth rate of the used smartphone market is
forecast to be 4-5 times higher than the overall smartphone market.

Regarding the consumer benefit for renting a smartphone instead of buying

● With the technology changing so rapidly and gone are those days when everyone wanted a
sophisticated or decent phone. Now, is all about the updated version.

● Instead of spending huge amounts every year of their hard earned money on something that
devaluates every year does not sound very effective. Therefore, people are moving with the
trend of leasing a phone for a year or two depending upon the policy of the company and
changing them easily with an updated version.
● In terms of cash outlay, the customer pays about 50 per cent less over two years for a
mobile plan and a rental than for a similar plan with a handset they end up owning after
two years.

Regarding the competitors

 In India, has the trend gone up? Well according to the current scenario and what stats show
I can say that the demand has increased. Not many companies are involved in handset
leasing although furniture and other home appliances renting is more popular.
 During my study I did not get much information about handset leasing in India. Hardly, a
company or two. But a lot of companies are leasing other products example furlenco,
rentwala, rent2cash, etc
 According to my analysis rentomojo is outperforming because of the exceptional product of
handset leasing, which is a plus point.

In conclusion, looking at the points above, our hypothesis is that this should be a profitable business
to venture into and it is estimated that the market may grow in next few years owing to cash crunch
among the population and coping up with the technology updates at the same time.

Sources:
1. https://www.owler.com/company/rentomojo
2. Deloitte pages
3. Mobile world live blog
4. Rentomojo official website