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06_Smart Communications

The miniaturized telecom

How can a wireless carrier grow if most of its subscribers earn only $6 a day or less, and use their mobiles only for text messaging? For Smart Communications, the Philippines's top carrier, the answer was an all-digital "telecom in a sachet": Some 800,000 retailers buy text-messaging airtime in bulk from Smart and resell it (also via text message) in micro-denominations of as little as 50 cents per packet. The result: Smart's 22 million customers get anytime service at a price they can afford. Smart's retailers (typically, neighborhood-store owners) get a "logisticsless" product that doesn't add inventory and delivers 15% margins. And Smart, unlike Western companies, gets paid before it delivers $80 million worth of "e-loads" monthly. Smart, indeed.

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