Enterprise offers the next big opportunity for the telecoms space, but currently the market is at ground zero. This is the view of Jaymin Patel, the man who took over from current Sprint CEO Marcelo Claure as the head of SoftBank-owned mobile distributor Brightstar in 2015.
Patel, who was not a man with much experience of the telecoms market when he took the reins from company founder Claure, says advances in mobility have led to a change in viewpoints from chief information officers at some of the world’s biggest enterprises. Instead of a core focus on network infrastructure, CIOs now have to account for agile working.
Patel cites the UK as an example: 97% of UK workplaces have some form of flexible working, with legislation that supports that.
“Enterprise is a huge opportunity and that industry is almost at ground zero,” he explains. “There is a big opportunity for Brightstar to go in and manage that end-to-end. Most companies overlook the management of their mobile devices.”
This opportunity is one arising in part from the failure of telecoms operators to get to grips with end-to-end device management. “We’re moving away from deskbound workers to flexible, and mobile becomes increasingly important. Managing a mobile estate becomes quite costly, or you can outsource it,” Patel adds. “So you need an end-to-end offering. Telcos don’t seem to be offering that at the moment.”
Though he sees the potential competition with operators, they remain a key source of business for the privately-owned company, in which SoftBank is the biggest shareholder with 57%. Overall, it serves more than 50,000 carrier, retail and enterprise customers across 100 countries, touching over 100,000 points of sale.
Founded in 1997, Brightstar’s legacy business is getting mobile hardware into those points of sale, and that has always involved a close relationship with telecoms operators. In terms of who it works with, Patel remains coy, naming but a few of Brightstar’s partners.
Unsurprisingly, the first name he offers is fellow SoftBank-owned firm Sprint, but he also highlights the likes of América Móvil, Telefónica, Telstra, Maxis, SingTel and Vodafone as a number of its carrier partners.
It also works with phone-makers and equipment manufacturers, including Apple, which it works with in 14 centres across Europe, Patel says.
“Our heritage has been as a distributor of hardware and that is still regarded as an important business for us, but we’ve moved on to intelligent supply chain – what is the best way for the carrier or retailer to get the product to the consumer via a store, and manage inventory. But also have the best ranging of products,” he says.
“Brightstar has a well-developed reverse logistics strategy – we are processing more than one million devices in the UK alone.”
On top of logistics, the other key focus for Brightstar will be services, an area that Patel claims is seeing increasing engagement and interest from the carrier community as telcos look to differentiate themselves from rivals.
“Our role is to help carriers simplify their role in the wireless world. We simplify wireless to make mobility accessible to everyone. We are constantly thinking about ways to reduce complexity for our customers. What matters to our partners is to make sure they have the best network and best services for their customers, and being able to offer the right content to them,” he says.
“If our partners have the right technology and efficiency and assets in their retail portfolio, it increases revenues and sell through rates. They can sell them through a better omnichannel environment.”
He adds: “All the carriers we now speak to are looking at a range of services, from buyback to insurance and leasing. Some are already on the way there, but much of the market is still considering this.”
By services, Patel points to three core categories that Brightstar is targeting within the services area: buy-back and trade-in, which it manages through a service called Brightstar Echo; insurance, which it calls Brightstar Halo; and Brightstar Flex, which is all about providing finance, leasing and rental solutions, for carriers and their customers.
These fit together to perform a single structured unit that helps telecoms operators take value from the entire lifecycle of a mobile device, and improve customer loyalty at the same time, Patel explains.
“If you can provide a leasing structure for a customer, and offer a residual value that lowers the cost of that lease, we can then use our buy-back structure to do that. We can then sell that back into the open market.”
The Brightstar chief adds: “So that ecosystem is well connected together and makes us very competitive, because we have the lowest cost to serve and the most innovation that will drive customers to go to carriers.”
Leasing is one major area where Patel sees growth opportunities for both Brightstar and its customers. Though much more common in markets such as the US, leasing is still in its relative infancy in Europe, where handset subsidy models are much more prominent.
Brightstar splits Flex across several different financial options, including handset rental, which sees it reclaim the devices at the end of its lifespan; a typical monthly fee model of leasing; and options that allow carriers to offer their customers early upgrades.
“Market adoption of leasing models is gaining traction all over the world. It started in the US, but more and more, as carriers remove subsidies, you have to be more transparent about the cost on the cost of data and voice services as opposed to the cost of the hardware. We’re seeing it in Europe [and the] Asia Pacific. There is much more interest in this from carriers.”
The key component to all of this, perhaps, is how it ties in with another one of Brightstar’s key services: reverse logistics, or, in everyday language, reclaiming and recycling of products.
Labelled “Brightstar Echo” because, like an echo, the handset comes back to you, the concept is simple: customers trade in their devices to their operator for a cash fee, an early upgrade, or whatever offer they wish to make. In turn, the operator hands this device to Brightstar, which then wipes it, fixes any issues and resells it. And those devices it’s not able to repair or resell? It recycles them.
This has been a key part of Brightstar’s strategy for a number of years, Patel says, but it has grown more advanced in how it tackles this market. To this end, it has made several acquisitions, including the takeover of UK recycling company Mobile Phone Xchange in 2012.
Tying this together is Brightstar’s insurance services arm. Patel explains: “We design the insurance programme, provide the customer service end, deal with fulfilment, and use an underwriter to offset the risk,” he says.
“Brightstar Halo is our B2B brand, but we white-label our insurance offerings for our carrier partners. Our job is to make our customers look great. We don’t need to be publicised, but we’re happy for it to be shown off that it is powered by Brightstar where appropriate.” These partners include the likes of Telenor in Norway, where it is adding more than 600,000 subscribers to the scheme this year, and O2 in the UK.
Overall, for Patel, it is about offering the full package. “That’s key in enterprise – how do we provide an end-to-end service for companies with a mobile estate, whether it is 100 or 5,000 devices? We can help them outsource the entire mobile end-to-end service – provide the device and insurance, buy it back at the end of the lifecycle, and [provide] all the products as a service that sit on that device.”
Sitting behind all of this is the might of Japanese technology giant SoftBank, which took an initial 56% stake.
I spoke with Patel as SoftBank was in the midst of the first round of fundraising for its huge investment fund, which raised $96 billion by mid-May. Though he would not disclose if Brightstar will see any of that money, Patel did say he expects the distributor to benefit from the efforts of its parent company, especially in the ever more important field of security.
“It is great to be part of the SoftBank group and that gives us the benefit of working with our colleagues there to understand all the investments that are being made there in technology and telco space,” he says.
“SoftBank recently invested in a number advanced cyber security companies, and that is an emergent consideration for many carriers, so we are now building that into our portfolio – how we offer cyber security protection for mobile assets.
“If you look at what SoftBank is doing in security – Zimperium, which offers mobile security at the network and device layer; and CyberReason, which protects every end point within an enterprise network – this company protects them all using algorithms that detect attacks. We believe these kinds of companies will feature in our enterprise strategy.”