In a recent conversation with Mobile World Live, Roger Brown, North America Managing Director at Kingfisher, discussed the current mobile experience economy. Exploring the growing significance of subscription models like FLIP and their impact for consumers, carriers and the environment.
The mobile phone ownership model is fractured due to outdated insurance plans and long-term contracts that hamstring consumer choice. But there’s a new mobile ownership model shaking-up the industry, creating new options for consumers.
Subscription models by companies such as Netflix and Peloton have been around for years, and mobile experience company Kingfisher has applied the same principles to the mobile phone experience.
In short, Kingfisher is reinventing the mobile ownership experience providing greater flexibility, value and sustainability for the industry, consumers, operators, and the planet through its subscription model for mobile phones.
Kingfisher has developed a circular model for phones, that allows consumers to upgrade their device at any time, for any reason. Their old phone goes back into the circular economy, finding a new life with someone who needs it, rather than being prematurely discarded in a drawer or landfill.
Kingfisher’s program benefits consumers by giving them more freedom, flexibility, value, and choice when it comes to owning the latest device.
It’s also a win for operators because they can offer their customers a better experience and differentiated services. Leading to lower churn rates and responsible business growth, aligned with ESG targets.
Operators would be hard-pressed to build and manage similar circular phone subscription models on their own, but Kingfisher takes care of the entire ecosystem for them through its world-first, full-service circular mobile Operating Platform, Katalyst.
Roger Brown, managing director, North America for Kingfisher, explained the current mobile ownership model used by operators emphasizes low prices for subsidized phones, but places little to no value on the actual devices themselves.
Dating back a decade or so, Brown noted operators stopped requiring service contracts in favour of higher device prices coupled with device financing to make them affordable.
“Whether it was intended or not, financing has become the new contract because it still forces customers to pay off their phones before they can upgrade or leave the operator,” Brown explained. “While this clearly separated the value of the phone versus the value of the rate plan for customers, it’s not a great experience.”
To offer new phones at a lower monthly rate, operators also extended the length of the financing terms for new devices from four to six months to 12, 24 and even 36 months.
“What that does is it makes it harder for consumers to upgrade whenever they want to,” Brown noted.
OEMs are manufacturing phones designed to last seven or eight years with the potential to serve three or more owners, but most of them don’t stay in circulation that long. According to the International Waste Electrical and Electronic Equipment Forum, 5.3 billion mobile phones ended up in landfills or desk drawers in 2022 when the majority of them still had a lot of life left in them.
Re-inventing the subscription model
Kingfisher has created a paradigm shift for the mobile subscription model by giving consumers the option of swapping out their devices at any time for any reason even if their phone is yet to be paid off in full.
Currently Kingfisher operates its innovative FLIP and trade-in program in Australia, enabling consumers and operators to create long-term value for their devices with less environmental impact.
Customers pay a monthly fee for the ability to upgrade their phones whenever they want, no matter the condition, including broken, damaged or lost.
The service also includes all aspects covered by typical device insurance, freeing operators from the need to engage in separate insurance provisions.
Brown stated operators typically work with Kingfisher to determine the amount of the monthly charge to take part in the FLIP program, which can range from $10 to $15 per month and the FLIP service is targeted at higher-end devices, as they are designed to last longer and are therefore more durable.
“Every time we’re going to deploy with a partner, we work with them to understand the desired customer experience and the rules and parameters they want,” he noted.
Every time we’re going to deploy with a partner, we work with them to understand the desired customer experience and the rules and parameters they want— Roger Brown, Managing Director, North America
Brown stated Kingfisher was also talking to operators who want to embed the program into their rate plans.
For consumers, the FLIP program offers a flexible and convenient means to upgrade their device whenever they want, for any reason, without getting roped-into new phone releases or holiday promotions. And operators benefit because it enables both customer acquisition and retention benefits.
“When a customer is in a subscription, they’re more inclined to do the easy thing, which is to take advantage of this program they already have with the operator instead of switching out to a new operator when they’re looking to upgrade,” Brown said.
Completing the virtuous circle
Kingfisher has a separate program, NEXUS, that handles the returned devices by customers. The company refurbishes the used phones prior to selling them to the thriving secondary market.
“NEXUS is a portal by which we sell those phones directly to end consumers,” Brown said. “By recycling those phones, we’re able to monetize them, give them a second life and sell them to people.”
By giving phones second, third or even fourth lives, Kingfisher is keeping devices in circulation for longer, enabling significant emission reductions and allowing more people the opportunity to access the latest tech.
“We actually want people to use the product as much as possible because that powers a circular economy for devices and in turn, significant ESG benefits”. Brown explained. “Our model has residual value because it allows us to go pay off the customers’ existing plans so we can go monetize those phones, but it’s really the customers getting the benefit”.
Your partner in ownership innovation
At Kingfisher, it’s our mission to help carriers deliver sustainable, world-class device experiences to their customers. Together we can make your transition to a circular business model seamless.