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October 22, 2007

Recycled and Refurbished Mobile Phone Market Generating More Than One Kind of 'Green'



Doing the “green” thing doesn’t have to mean spending more or compromising revenues. Earth-friendly practices can, in fact, bring in a nice profit. That’s what ABI Research (News - Alert) is predicting in when it comes to recycling and refurbishing wireless handsets.
 
In a new report out this week, ABI predicted that sales from recycled and refurbished will total more than $3.5 billion this year. Not too shabby! What’s behind such a windfall? The research firm credited shorter periods between handset replacements, growing demand for low-cost phones in emerging markets, and new regulations.
 
ABI further predicted that the recycled/refurbished handset market will continue growing steadily during the next five years, generating more than $6 billion in revenue by 2012.
 
Thanks to the efforts of various players in this space—retailers, mobile operators, handset vendors, recycling companies and charities—more users are now returning their old handsets for recycling when they upgrade, ABI said in its report. Also, as operators step up their take-back programs (by, for example, offering full refunds or replacements for returned handsets), more phones are becoming available for refurbishment.
 
More phones to refurbish helps boost the second-hand mobile phone market, ABI noted, and results in buyers getting a more reliable used product. Recycling companies test and repair such devices to ensure they’re ready for resale, and in most cases offer a 90 day or one year warrantee.
 
When it comes to the bottom line, offering recycled and refurbished mobile phones can help operators boost their per-customer profitability through better management of subscriber acquisition costs, ABI analyst Shailendra Pandey said.
 
“Operators can use these handsets to address low ARPU subscribers and start generating profits on low margin accounts quickly, rather than having to wait to recover subsidies on new handsets,” Pandey said in the report.
 
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Mae Kowalke is an associate editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. She also blogs for TMCnet here.

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