Research Reports

Strategies to Accelerate Handset Financing in Emerging Markets

Nearly all business managers and analysts understand that the next wave of mobile phone buyers is coming from low-income segments of emerging markets. In this report, Vital Wave Consulting provides a practical game plan for accelerating sales to that segment through formal and informal financing programs.

Part One sizes, locates and characterizes the near-term handset market and provides an overview of the main inhibitors to purchasing a new handset.

Part Two describes the financial services landscape of the ten largest near-term markets, which include China, India, Indonesia, Bangladesh, Iran, Egypt, Vietnam, Brazil, Pakistan and Mexico.  Through in-depth interviews with prospective near-term market candidates and local financial services experts, Vital Wave Consulting offers a set of strategies to tap into formal and informal financing mechanisms to accelerate first-time mobile handset sales.

Part Three consists of two Resource Guides. The first includes data for 119 countries, including the size of the near-term market, overall population, mobile penetration rates as of mid-2007, and the annual income levels (ceiling and floor) for the near-term target market.  The second Resource Guide provides information on more than 50 financial services organizations that are potential partners for programs to extend financial services to near-term handset market candidates. Data include the organization’s name, type and reach (clients served).

View an excerpt of the report
Release Date: November 2007
Available format: PDF 
Pages: 57
Tables and Figures: 32 (see below for complete list)
Table of Contents: (see below)

Tables: 12 total
Table 1: Countries with Mobile Penetration Rates Exceeding 100% in mid-2007
Table 2: Large Emerging Markets with Mobile Penetration Rates Under 60% in mid-2007
Table 3: Calculation of Near-term Market for First-time Handset Buyers (mid-2007)
Table 4: Near-term Market Candidates in Emerging Markets by Region
Table 5: Emerging Markets with Zero Near-term Market Candidates
Table 6: Illiteracy and Languages Spoken in the Top Ten Near-term Markets
Table 7: Financial Services Targeted to Low-income Populations in Near-term Markets
Table 8: Usage of Financial Services per 100 People
Table 9: Target Partners for the Portfolio of Financing Instruments
Resource Table A: Worldwide Near-Term First-time Mobile Handset Purchaser Market Size
Resource Table B: Key Partnership Organizations in Top Ten Near-term Markets
Resource Table C: Characteristics of Key US-based Global Microfinance Networks

Figures: 20 total
Figure A: Income Stratification of the Global Population
Figure B: Top Ten Near-term Markets for First-time Handset Sales
Figure C: Average Income Band and Market Size for Emerging Markets
Figure D: ARPU Trend across Near-term Handset Markets
Figure E: Handset Average Sales Price Trend
Figure F: Pre-paid Subscribers as a Percent of Total Mobile Subscribers
Figure G: Net Enrollment Rates in Primary & Secondary School in Near-term Handset Markets
Figure H: Rural and Urban Near-term Market Size
Figure I: Ownership and Usage of “Old” vs. “New” Technologies, Interview Respondents
Figure J: Uses of a US$ 20 or US$ 100 Gift, Interview Respondents
Figure K: Estimated and Actual Cost of Entry-level Handset
Figure L: Significant Barriers to First-time Mobile Handset Purchases
Figure M: Average Price of a Low-End Handset as a Percentage of Average Monthly Income of Near-Term Market Individuals
Figure N: Financial Services Reach Continuum
Figure O: Formal and Semi-Formal Financial Services Penetration in the Top Ten Near-term Markets
Figure P:Prominent Financing Mechanisms across Near-term Markets
Figure Q: Household Access to Formal Financial Services
Figure R: Geographic Reach of Banks and ATMs (2005)
Figure S: Annual Workers’ Remittances to Top 10 Near-term Markets (2005)
Figure T: Formal and Informal Linkages in Credit Delivery to Lower-income Populations
 
Contents
Executive Summary and Recommendations
Key Terms and Concepts

1. The Near-term Handset Market 
1. Size of the Near-term Market
2. Location of the Near-term Market
3. Top Ten Near-term Markets
4. Characteristics of the Near-term Market
1. Income levels
2. Education
3. Distribution
4. Consumption trends
5. Purchasing Inhibitors of the Near-term Market
2. Financing Options for Near-term Handset Buyers
1. Financial Services Landscape
2. Formal Financing Services in the Top Ten Near-term Markets
3. Informal Financing Services in the Top Ten Near-term Markets
4. Interaction between Financing Institutions
5. Sources of Credit within the Top Ten Near-term Markets
6. Portfolio of Financing Mechanisms
3. Resource Guides
1. Worldwide Near-Term First-time Mobile Handset Purchaser Market Size
2. Key Partnership Organizations in Top Ten Near-term Markets
3. Characteristics of Key US-based Global Microfinance Networks

Publication Information
Endnotes