Orange Digital Ventures—launched in 2015 with a €20 million (US $22.5 million) annual budget, said it has invested in PayJoy, an online platform allowing people with poor credit profiles to buy smartphones in installments. California-based PayJoy, which also attracted funding from several private equity players, says that its business model addresses up to 1 billion potential smartphone purchasers. The system works by installing PayJoy’s management software on the device, making the smartphone itself the guarantee for the lender. Orange, which did not disclose financial details, said its investment particularly targets its 110 million clients in Africa and the Middle East.
Getting smartphones into as many hands as possible is clearly a desired goal for mobile operators worldwide. Without deep penetration of these devices, full utilization of networks is not possible, and MNOs’ investments in those networks will not achieve maximum return. For many potential customers, especially in the developing world, financial barriers to purchasing smartphones are high. Installment-plan device purchasing has already become widespread even in wealthy nations; it should be even more appealing to budget-minded customers in comparative poor ones. Therefore, it is good strategy, in our view, for a multinational operator such as Orange to engage in a partnership to make smartphones more accessible to such customers. PayJoy’s technology, which claims to use the device itself as a way to offset the risks involved in installment purchases by low- or no-credit consumers, claims to use the device itself as collateral for what amounts to a loan. The company cites research by McKinsey that estimates the potential global market for its alternative credit model at US $2.3 billion. Whether or not this particular model turns out to be a winner, we firmly believe that creative plans for smartphone proliferation among populations that currently find it hard to afford them is good for operators’ business, and that therefore they should seek them out. |
Showing posts with label mobile phone rates. Show all posts
Showing posts with label mobile phone rates. Show all posts
Sunday, July 24, 2016
Orange Invests in Smartphone Purchase Credit Startup
Wednesday, July 20, 2016
Rwanda and Gabon Launch One Area Network
Rwanda and Gabon have introduced One Area Network, an initiative under which the two central African nations will get rid of roaming charges, allowing their citizens to enjoy reduced calling rates, according to a news report. The initiative is being launched by Rwandan President Paul Kagame and his Gabonese counterpart, Ali Bongo. Kagame said the development will serve to integrate the continent and enable citizens of the two countries to communicate cheaply. Kagame also said that the digital integration will serve to achieve the goal of having a single digital market. In order to achieve affordable and accessible internet, it is important to involve the private sector, Kagame noted, adding that wide access to broadband is difficult to achieve without public-private partnerships.
In the European Union, as we have written on several occasions recently, extra roaming fees attracted strong opposition from many policymakers and members of the public and as a result are being phased out. In other markets, operators are making significant revenue from roaming surcharges and there is no move afoot from state regulators or industry consortiums to eliminate them. This initiative from Africa is interesting because shows that, at least in the opinion of decision-makers in that region, eliminating roaming can be a stimulus to MNO revenues and to the regional mobile economy generally. An initiative similar to the present one was implemented in the Northern Corridor region, which covers Rwanda, Uganda and Kenya; it increased mobile traffic in the region by about 800 percent and thereby increased profits for operators in the region. Kagame intends the One Area Network to be the first step toward the goal of achieving a single digital market for Africa. In that sense, his agreement with Ali Bongo is noteworthy, in that the two countries do not share a border; the digital unification of a region can transcend traditional geographic concepts.
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