Subscribe For Free
FOLLOW US

Join in the great recycling gold rush

Alex Yau
November 21, 2014

Mobile handset recycling has gone from zero to millions in less than 10 years and the good news for the channel is the market is still in its infancy

With more than 32 million handsets sold in the UK last year, the opportunities around handset recycling are vast.

In the UK today, there are more than 50 registered recycling firms – recycling tens of thousands of devices every week, paying out millions to customers.

Leading player Mazuma Mobile for example has paid out more than £200 million since forming, whilst rival Envirofone claims to process 200,000 devices a month.

MD Charlo Carabott says: “There’s now a big reuse market in the UK with insurance companies, resellers and high street stalls. The idea of consumers buying a used phone nowadays is a lot more acceptable than it was five or six years ago.”

Reycling in its infancy
The great news is, despite heavy marketing, (see graphic) recycling is still in its infancy and adoption remains considerably low.

It is estimated more than 90 million handsets are currently sitting unused in the UK today with an estimated resell value of around £6.4 billion.

According to Technavio, in 2013 5.4 million handsets in the UK were recycled, with that figure set to rise to around 6.7 million by the end of this year.

By 2018 however, that figure will have exploded to over 16 million.

This is a clear reflection on how the market has evolved in just a few short years – thanks to the growth of high value smartphones.

According to price comparison website Compare My Mobile (see chart) the average resale price for UK smartphones increased from £20 per handset in 2007 to £108 in 2013.

Recycling is also fast becoming part of the buying cycle for customers, particularly around annually launched devices such as the Apple iPhone and Samsung Galaxy range. This is something not lost on the operators, with O2, EE, Three and Vodafone actively promoting trade-in and recycling in store.

For example, iPhone users who have just cometo the end of their two-year deal and upgraded to the 6 or 6 Plus can get around £150 for the 16GB version of the iPhone 5. A Samsung Galaxy S5 is worth north of £200 to its current owner. The resell value of used handsets is growing and companies want a piece of the pie.

Realising revenues
“It’s changed hugely in the last few years in that the networks have got really involved in it and that’s who it is being driven by,” said Compare My Mobile commercial director Andrew Beckett.

“You take somewhere like Carphone Warehouse, where if you had went in there a few years ago they wouldn’t have asked you what you were doing with your old handset, now it’s part of the process. The networks and retailers have realised there are revenues in this whereas before it was just the recycling companies. I think they’ve finally got their act together, previously they were not set up for it but now they are.”

EE, through its partnership with Brightstar, currently recycles around 53,000 handsets annually. Three doesn’t disclose its figures while Vodafone says its Brightstar-managed recycling scheme has almost doubled in size in three years from 93,000 handsets in 2010/11 to 176,000 in 2013/14.

However, O2 is leading the way with its O2 Recycle scheme launched in 2009. Managed by Scottish-based recycling firm, Redeem, it has paid out more than £90 million to its customers and recycled more than 1.3 million handsets since launch.

Exponential growth
The growth of the scheme charts the increasing trend of handsets being recycled.  Six months ago it had paid out £71 million to customers and recycled a total of one million handsets.

The 357,000 handsets it recycled in 2013 is almost matched by what it has recycled in the past six months alone. Go back to May 2012 and it had paid out just £30 million to customers. Thus the scheme has trebled in size in the past two and a half years. The proceeds of the scheme go to O2’s ‘Think Big’ charity.

“One of the things that we have tried to attack with Recycle is that when we buy a TV or DVD, or a mobile phone or a piece of electronic kit that has a sizeable cost we’re conscious of the value of that product,” said Telefónica O2 head of corporate responsibility and environment Dr Gareth Rice.

“What we found when we did the customer research, currently and in previous years, was that there was high syndrome of handsets and devices in drawers because you as a customer would hang on to it because that device has a value, it still works, I want something new and more appropriate now but I’m not throwing it away. One of the things O2 Recycle helps with is that customers now see they can release that value back.”

O2 has taken efforts in the past two years to ensure that all sales staff are briefed on O2 Recycle and its built into the sales process.

The scheme has also seen significant traction from the launch of O2 Refresh in April 2013.  The dual tariff allows customers to take new handsets whenever they wanted, splitting the airtime and handset cost over a 24 month contract, meaning that customers are not faced with penalties for upgrading to the latest handset mid-term. The operator says O2 Refresh and O2 Recycle work “hand-in-glove” with each other and has led to a rise in the amount of recycled handsets.

Green revolution
However, it’s not just the operator’ who are getting involved in recycling.

Apple which releases new mobile handsets each September announced its own buyback scheme last year. Customers receive discounts off new models when they trade in their older models at its retail stores with all logistics being managed by Dataserv. They are doing it for a number of reasons according to senior Technavio analyst Sayani Roy.

“Apple is asking for older iPhones back and is offering new handsets at a lower cost in exchange. This is because there is a green revolution going on and they want to say that they are more caring.

Other manufacturers are offering similar schemes and these are the initiatives that are driving the market. That is useful plus the companies have to recycle the phones, in accordance with regulations, in a proper way.”

Full article in Mobile News issue 577 (November 17, 2014).

To subscribe to Mobile News click here

For information on downloading the digital copy of Mobile News for free on your mobile or tablet click here

Share this article

We use cookies to study how our website is being used. By continuing to browse the site you are agreeing to our use of cookies.