The Philippines ranks among the fastest-growing digital economies in Southeast Asia, with over 86 million active internet users and mobile internet penetration at 73.6% as of 2024. With impressive internet penetration numbers, one can assume active user stats to be phenomenal. However, according to GSMA data, nearly half of the mobile users still use basic or feature phones, limiting access to modern apps and online services. This is a huge opportunity for telecom operators, offering mobile device financing and bundling products. Telcos can expand their subscriber base and increase average revenue per user (ARPU) with combo offers secured by Datacultr’s device financing platform.
Challenges Faced by Telcos while Device Financing
The demand for smartphones in the Philippines is soaring, yet low income consumers who lack a credit score / banking history face barriers in affording these devices. Recognizing this, Telcos are now offering mobile device financing opportunities to make smartphones more accessible. However, the process comes with its own set of challenges
Creditworthiness Assessment
Many Filipinos, especially those in underserved regions, lack formal credit histories. This absence makes it difficult for telcos to assess creditworthiness, often leading to high rejection rates or increased default risks as they navigate uncharted financial profiles.
Network Switching
A persistent challenge for telcos is customers switching networks after purchasing a financed device, resulting in loss of revenue and increased default risks.
Inconsistent Loan Installment Collections
Reminding customers of their dues and ensuring consistent payments can be cumbersome and often requires manual interventions.
Managing Defaults
Traditional methods of handling missed payments, like sending reminders or employing recovery agents, can be resource-intensive and not always effective.
Datacultr: Revolutionizing Device Financing for Telcos
Device financing allows Filipino consumers to spread the cost of high-value devices like smartphones over time, making these smart devices more accessible. Datacultr provides unique bundling opportunities through its unique Device Lock and network lock (or SIM Lock) capabilities especially designed for telcos. This enables them to implement effective and secure device financing programs coupled with network bundles. Here’s how Datacultr’s Odyssey has increased sales for telco’s:
Virtual Collateral Creation
With Datacultr, financed smartphones serve as virtual collateral, shifting the risk dynamics by using the device as a guarantee. This approach enables telcos to extend financing to a wider audience.
Proactive Engagement
Datacultr enables telcos to engage directly with users through reminders for dues and payments, boosting timely payments, reducing defaults, and strengthening customer relationships—essential in a mobile-centric market like the Philippines.
Consistent Loan Installment Collections
Automated rich reminders in the customer’s chosen language drives higher on-time payments and reduces collection efforts.
Device Locking Feature
In cases of missed payments, rather than resorting to traditional recovery methods, telcos can employ Datacultr’s unique device locking feature. By temporarily locking the device, telcos ensure their users understand that they have missed a critical payment driving prompt repayments. This not only reduces collection costs but also accelerates the recovery process.
Network Loyalty
By locking the device with the bundled network, Datacultr ensures users remain loyal to the original network, thus curtailing the challenge of network switching.
The Path Forward
For telecom operators in the Philippines, device financing presents a significant opportunity to boost smartphone penetration and overall digital inclusivity. With device financing risk management at the heart of this mission, Datacultr empowers telcos to circumvent challenges and unlock the vast reservoir of opportunities the market offers.
Embracing such an effective platform is not just a move towards business augmentation for telcos, but also a stride towards fostering digital inclusion in Philippines- ensuring a future where device financing for banks and telcos is both accessible and impactful.
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