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What Works: Smart Communications' Bop-Driven Business Model

Executive Summary

WRI's business case studies go deeper into some of the most promising projects represented in the Digital Dividend Clearinghouse, providing detailed description and analysis of each business model, the market segment in which it operates, its successes and challenges, potential replicability and scalability. If possible, the study also documents the social impact of the venture.

Digital Dividends contracts teams of MBA students, under supervision of business school faculty, to research and write our business case studies, as they are uniquely suited to provide unbiased, professional assessments of the business models at low cost. Using MBA students has the added advantage of helping to interest a generation of future business leaders in microenterprise and global development issues.

Smart Communications has transformed the cell phone market in the Philippines by enabling electronic sales of airtime via short message service (SMS) and by reducing the unit size of such sales to as little as US$0.03. This innovation has enabled millions of low-income Filipinos to access communications services - 98% of Smart's subscribers are l ow-income, pre-paid customers. Its distribution system, using SMS technology, allows merchants to re-sell minutes, taking a commission on every sale, in essence creating a business opportunity for 450,000 entrepreneurs.

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