Paid Extended Warranty Support for Mobile Handsets

Opportunity Snapshot

Investment Opportunity

We are looking to launch paid extended warranty (repair) support for mobile handset users. With the minimum investment of $0.58 million annually we plan to earn $6.7 million.

We will sell our Warranty Card at the price of only 200 INR for products in the price range of 1000 INR to 5000 INR. Now we have to identify and target the users of such products.

We will start our business from Delhi, where there are 40.9 million Mobile Handset users. 17% of the market is covered by local Indian mobile manufacturers (or China made products).

Correspondingly, the local company market – excluding global brands like NOKIA, SAMSUNG, LG etc. - is 17% of 4,09,00,000 = 69,53,000 ( 69.53 lakh).

Assuming that 50% are happy with their company's service, the figure remains only 34,76,500 (34.765 lakh). To consider the user willingness factor, let's further cut the figure by more than 50 % . Now the figure goes down to 17,38,250 ( 17.3825 lakh). These are our potential customers having products with expected price range of 1000 INR - 5000 INR and willing to search out our service.

Duration Period 1 year
Card value: 200 INR
Money to earn in a year 1738250 * 200 = 34,76,50,000 INR ( 34.7650 Crore) = 6.7 million $

How it Works?

The Card Value will be 200 INR. The warranty card will cover full repairs of defects in small parts of the handset like mic, speaker, charging jack, for a period of one year. For us 200 INR will be sufficient to do such repairs.

In all other cases, when the handset is liquid and there are physical damages and the LCD or Touch parts need to be changed, the Card will cover 50 % OFF the cost of the part that needs to be replaced. (in actual the price will correspond to the original cost of the part).

The customers are already paying athe mount 200 -300 INR for every single visit, which will correspondingly cost them 500 – 700 in year (if they have to go 2 – 3 to a service center), and that for poor quality of parts and repairing. Furthermore, it often happens that the handset stays for 1 month at the service station to get repaired. We will be taking only 200 for the whole year, giving the customer best quality of repair within 72 hours with an option of standby handset offer.

ROI (Cash Payback Period) is 1 year.

This is good business idea because there are 900 million users in India but the after-sales service of mobile handset companies is very poor. Not only the local companies but also the branded ones (apart from Samsung) are not able to offer good after-sales support in the Indian market. Till date no one tried to offer the service we will be providing. We have only 1 market player for competition – Digit Telecom that is planning something similar to our idea.

This idea requires an investment of min 3 Crore only and returning 34.76 crore. It will not only return the amount invested with double figure in a year only but it will also make you able to expand our business boundaries in more areas of India.

Our idea will sell because the customer is already paying a much higher amont for this service. We are offering it at a price 50% less than the current rates. And of course the trust that the warranty creates increases the resale market value of user handsets.

Our idea is at a Startup Stage and offers to investors high return of invested money.

Competitive Advantage

We have already identified the market players and observed that this type of business is being run only in small shops. There is only a single competitor in the market offering a similar product.

We not only sell a product to our customers but provide them with the best service and build trust.

This service is a long-term business, as we are starting only with a single state of India with 40 million users, of which we are taking a very small part. On a national level, there are 900 million users to be covered.

Rationale for the deal

We can offer to potential investors the following opportunity: Either to provide us with one-off investment and to take your money back with good interest in year 1 only, or to work along with us to complete this project at country and global level.

Our Service promises to be very profitable.

Our competitors are small shop keepers who are cutting peoples pocket by taking 200 times more than the actual cost of service.

India needs this service, and nobody is able to provide it because nobody knows how to care about what customers value and believe in, and how to provide the service without worrying about the money. While everyone is in running business with the sole purpose of making money, with this business I'm aiming at self-fulfillment.

Use of financing

The investment required is 3 Crore or $0.58 million and will be used to start up the business.

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