Hi Elisse,

I come back to you with my report for our client company: Company X regarding the pros
and cons of an implementation of handset leasing in their service mix. My recommendation
is that they should proceed with investing in this service because profit will increase by more
than 5% in a year.

Here is the reason why I recommend this move:

Constant decrease in the traditional telecom services

- Slowing mobile revenues before the implementation of this new service for Singtel
and SKT (Singapore companies).
- Steady decline of Globe’s market shares due to the implementation of this service by
one of its competitors.

Rejuvenate the customer base and lower cost

- 28% of the new subscribers of SKT (Singapore telecommunication company) in their
20s choosing to lease.
- Telstra in Australia offers leasing plans which cost about $7.38 less per month than
standard 24-month phone plan contracts.

Monetizing assets multiple times and recycling control

- Sprint (American telecommunication company) has a net value of leased devices of
$4.5 billion at the end of fiscal 3Q16 due to the benefits of this multiple opportunities
of monetizing their phones.
- The fact that phones come back to the companies gives them the opportunity to
recycle those phones and give them a second life.

In conclusion, looking at the 3 points above, our conclusion is that this should be a profitable
business to venture into and the 5-year NPV of this project will be positive and accompanied
by an impressive growth rate.

Sources:

- Institutional Knowledge at Singapore Management University, The transformation of

Globe Telecom
- Singapore Telecom Sector, Better than it appears
- Mobile World Live, Blog: Are smartphone rentals value for money?
- Market Realist, Why Sprint Is Focusing on Handset Leasing to Accelerate Growth