Used Wireless Handsets

1
Used Wireless Handsets The Environment

• III Foro Iberoamericano AHCIET Móvil
• México DF, 28 y 29 de Septiembre, 2005

Heather M. Robinson Manager, Latin American
Strategic Development
2
Agenda

• Latin America The Region at a Glance
• Technology Transition
• Wireless Operator Consolidation
• New Handset Sales
• Other Markets of the World
• North American Experience
• International Guidelines
• Solutions for Handset Recycling
• An Opportunity for Wireless Operators
• Who is ReCellular?
• What Services are Available?

3
The Region at a GlanceTechnology

• Technology as of March 2005
• GSM 39, or 73 million users
• TDMA 35 or 66 million users
• CDMA 24 or 46 million users
• (iDEN and analog each represent approx. 1 market
  share)
• Technology Forecast by 2009
• GSM 62
• TDMA 10
• CDMA 28
• (Analog at 0, iDEN is not considered in this
  forecast)

Sources Business News Americas www.bnamericas.c
om and Gartner Group www.gartner.com
4
The Region at a GlanceConsolidation

• Two Major Players
• Telefonica Moviles 63.7 Million Subscribers
• Purchased 11 Bellsouth properties that used CDMA
  technology.
• America Movil 72.1 Million Subscribers
• Purchased properties in Mexico and most recently,
  Chile, that used CDMA technology.
• Consolidation fuels growth, competition and
  technology expansion, creating an increase in
  both new and used wireless handsets in the
  market.
• Reported subscribers as of June 2005
• Does not consider recent purchases in Chile and
  Peru

5
The Region at a GlanceNew Handset Sales

• Manufacturers, operators and analysts all agree
  
• The consolidation trend and technology
  migration of mobile
• operators in Latin America are boosting overall
  handset sales.
• New handset sales expected for 2005
• 85.9 Million Mobile Phones
• 59 Replacement Sales 41 First Time
  Users
• Replacement handset sales help decrease churn and
  increase ARPU, but what happens to the phone they
  are now no longer using?

6
The World The EnvironmentCellular Handset
Recycling

• End-of-life management issues are now impacting
  the industry worldwide.
• Laws, regulations and international guidelines
  have been implemented to address the concern of
  increased electronic waste.

7
North American Experience

• Market At A Glance
• Cell phone subscribers 175 Million
• Average handset replacement cycle 18 months
• Est. annual number of retired cellular phones
  100 Million
• Percentage of retired handsets collected through
  2004 10
• All major industry companies now run collection
  programs.
• Laws Regulations
• California Legislation in 2004 requiring
  retailers to have a system for acceptance and
  collection of used cell phones for reuse,
  recycling or proper disposal at no cost to the
  consumer by July 1, 2006.
• Massachusetts Banned electronic waste from
  landfills and created a fund to recycle
  electronics.
• New York Requires vendors to accept and recycle
  any cell phone they sell.

8
International GuidelinesBasel Convention

• Mobile Phone Partnership Initiative (MPPI)
• Project Group 1.1 Refurbishment Reuse of
  End-of-Life Mobile Phones.
• Project Group 2.1 Best Practices for Collection
  Schemes Rules That Apply to Transboundary
  Movement.
• Hazardous waste classification of cell phones
• Transboundary movement of used cell phones
• Preparing guidelines for July 2006 convention
• Project Group 3.1 Recovery Recycling of
  End-of-Life Mobile Phones.
• Website for more info  http//www.basel.int/indus
  try/index.html

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International GuidelinesEuropean Union

• WEEE and RoHS Directives
• WEEE Directives Waste Electrical Electronic
  Equipment
• Sets requirements for the collection, treatment,
  recycling and recovery of electronic equipment.
• Manufacturers must be able to demonstrate that
  they are meeting recovery and recycling targets
  by December 2006.
• RoHS Directives Restriction of Hazardous
  Substances
• Reduce the levels of hazardous substances used in
  new electronic devices.
• Compliance to guidelines required by July 2006.

10
Call To Action

• The environmental issue has created laws,
  regulations and the start of international
  guidelines in addressing this issue.
• Wireless operators, manufacturers and other
  industry leaders of Latin America should take a
  proactive approach in addressing this issue.
• There are solutions already in place in other
  markets of the world that can be tailored to the
  needs of the individual markets of Latin America.

11

Environmental Challenge Becomes A Latin American
Operators Opportunity

• Take back or trade-in programs promote growth in
  the market.
• Three Key benefits to the Operator and its
  consumers
• Generates large volume of handsets that can be
  refurbished with high quality at a low cost.
• Creates a responsible, accountable, convenient
  means of disposing of unused wireless handsets,
  batteries and accessories.
• Opportunity to demonstrate and encourage
  corporate social responsibility.

12
Who is ReCellular?

• Established in 1991
• Headquarters in Dexter, Michigan, USA. Offices
  in Miami, FL and Ft. Worth, TX
• Buys and sells more than 3.5 million wireless
  handsets annually
• Generated more than 15 million (USD)
• for charities through handset
• collection programs

ReCellular Headquarters Dexter, MI, USA
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Strategic Partners
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ReCellulars Core Services

• Implement and manage end-of-life, trade-in/rebate
  and upgrade programs.
• Data security services to ensure that information
  found in each collected phone is erased prior to
  resale.
• Test and remarket collected cell phones and
  components for reuse.
• Market and sell existing inventories of used or
  surplus handsets.
• Recycle obsolete, damaged or otherwise designated
  units with complete traceability.

15
Program Experience

• Perform triage and remarketing for carrier and
  manufacturer sponsored end-of-life programs
  processing over 15,000 cell phones per day
• Manage outsourced end-of-life programs for
  manufacturers and top-tier carriers in North
  America
• Collect cell phones from more than 40,000
  locations in North America
• Successfully recovered over 15 million cell
  phones to date

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Summary

• Millions of unused handsets are generated by
  market characteristics such as technology
  transition, consolidation and new handset sales.
• The world has begun creating and implementing
  laws, regulations and international guidelines in
  response to this environmental issue.
• Services are available that make a collection
  program easier for a wireless operator or
  manufacturer to implement.
• There are various types of collection programs,
  each can be tailored to meet individual needs.

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Where to find more information

• Basel Convention/Mobile Phone Partnership
  Initiatives http//www.basel.int/industry/index.h
  tml
• WEEE and RoHS Directives http//europa.eu.int
• AHCIETs position on cellular phone recycling
  www.ahciet.net/reciclado
• ReCellulars website www.recellular.com
• ReCellulars recycling website for North America
  www.wirelessrecycling.com

18
Gracias!

• Heather M. Robinson
• Manager, Latin American Strategic Development
• ReCellular, Inc.
• 1.734.205.2265
• hrobinson_at_recellular.com