Insight
At Mobile World Congress 2024, speakers from Kingfisher, CCS Insight, Vodafone, Samsung, and Telefonica sat down to discuss strategies focussed on changing consumer mindsets with regard to device lifecycles
Sustainability was, as ever, a major focus at this year’s Mobile World Congress in Barcelona, will operators and vendors alike keen to show off their green credentials when it came to energy usage and carbon emissions.
However, it was a perhaps less headline-grabbing – but no less important – element of sustainability that was the topic of an insightful panel discussion on day three of the conference, seeking answers to the crucial question: what should we do about the billions of mobile devices that are discarded every year?
A circular approach to the device lifecycle
The scale of the issue at hand should not be underestimated. According to the GSMA, over 5.3 billion devices ended up in drawers or landfills in 2023. At the same time, each time a new smartphone is manufactured, around 80kgs of carbon is introduced into the atmosphere.
This unsustainable cycle clearly needs to change, but to do so requires not only buy-in from the entire mobile ecosystem but also changing the mindset of customers.
For Kingfisher, a company that works with partners to help facilitate second lives (and beyond) for devices, the key lies in making trade-in programmes more flexible.
“We allow customers the opportunity to return and upgrade their device at any time, in any condition, for any reason,” explained Georgiann Reigel, CEO of Kingfisher. “The benefit of that is obviously that device has now been handed back in, so we’re able to take that phone get it back to a good condition through repair or refurbishment, and then get that device back out to another customer and begin a second life.”
This represents a fundamental shift from the typical customer journey, where a customer buys a phone and is trapped with it until the end of their contract, regardless of whether it becomes damaged, or a more desirable device becomes available.
Indeed, building this concept of device trade-in into the very first steps of the customer journey is one of the main drivers for the World Phone Amnesty initiative, which aims to see 100% of devices returned, repaired, repurposed, or recycled.
“It’s a very simple concept: when you get a new phone, hand in your old phone,” said Reigel, noting that circularity rates are only at 5–10% on global scale. “We need to push for a 1:1 trade-in rate to make the industry truly sustainable and we’re a long way from that right now.”
Changing the consumer mindset
Of course, while customers are increasingly aware of the environmental impact of their activities as a consumer, incentivising people to make more sustainable choices remains a challenge.
“The core hook for all of this of course comes from the planet and the sustainability agenda, but I think ultimately customers want value as well,” said Varun Krishnan, Managing Director – FinTech & Connected Devices Tech at Vodafone. “This ecosystem around trade-in, financing, and extending device lifetimes actually gives a lot of value back to customers.”
Vodafone itself has introduced more flexible 36-month contracts, helping to extend the life of purchased devices beyond the norm. In addition, Krishnan noted that Vodafone’s global footprint also plays a role in repurposing these devices; a returned three-year old device may not be particularly attractive to a customer in the European market, but in less developed markets like Africa these devices can still be a major upgrade for consumers.
Meanwhile, Daniel Hernandez Ortega, SVP Devices & Consumer IoT at Telefónica, emphasised the importance of creating new ways to communicate the impact of device decisions to customers.
“We want to emphasise the use of the devices in a more responsible way,” said Ortega “We’ve launched very innovative solutions based on blockchain, Web3, and tokenomics, dealing with how people can compensate their carbon footprint.”
In Spain, for example, Telefonica’s Living Apps help the customer track the carbon emissions from their device activity, allowing them to make more sustainable decisions. They also reward the customer with tokens for making these sustainable decisions, which can then be spent to support local or international sustainability programmes that the consumer is particularly passionate about.
Both of these approaches encourage customers to think, at the point of purchase, about what will happen to their device when they no longer need it.
Push and pull: New technology versus longer device lifecycles
At the core of this discussion around device sustainability is something of a paradox. Operators and device manufacturers, naturally, want customer to upgrade to the latest models so that they can take advantage of the latest services. On the other hand, a more sustainable device lifecycle would see customers stick with their existing devices for increasingly longer periods of time. How do you reconcile these seemingly disparate drivers?
For Reigel, the solution lies in making the latest devices more affordable, a quality that will seem move on to their secondary and tertiary lives more quickly. Currently, devices being returned are three- to four-years old in typical exchange programmes. By contrast, Kingfisher’s programme in Australia, which has been running for three and a half years, is seeing one- and two-year-old devices returning to market.
“These are 4G and 5G devices, helping them meet the demand that the second-hand market has,” explained Reigel. “We’ve seen a 15x increase in the rate of returned devices by having a flexible ownership programme in the market […] We’ve seen the success of that programme without even telling people this is green, this is sustainable – we didn’t even communicate that. Customers were just 15x more likely to bring in that phone. If we can take that and scale it around the world, we’re going to be in a much better place.”
“It’s actually the supply that’s the challenge,” she added. “The demand globally dramatically outstrips demand.”
You can view the full panel session on the Kingfisher YouTube channel from the link below.
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