Lasco Financial enters phone business
Lasco Financial Services Limited (LASF) is now in the mobile-phone business.
The company, which up to now provided cambio and remittance services as well as loans, got authorisation to distribute Huawei devices in Jamaica.
LASF plans to sell "open-market mobile devices and accessories" at select agent locations across the island, according to Jacinth Hall-Tracey, the company's managing director.
This means that the phones will not be tied to any mobile service provider.
"Customers will be able to purchase affordably priced Huawei devices such as dual-SIM handsets, smartwatches, phone cases, etc," Hall-Tracey told the Financial Gleaner.
Eight of LASF's locations are currently running a pilot, she said.
The move into this new business segment will give LASF a new revenue stream. But it also helps better position the company to take advantage of the emerging mobile-based payment services.
"As a growing provider of retail financial services, Lasco Financial Services is aware of the changes and emerging trends in global mobile payments," the managing director said. "In the near future, we envision consumers will be able to use mobile devices to conduct more everyday financial transactions through the use of mobile devices."
She added: "The telecoms retail industry is certainly competitive. However, we believe that the market for smart mobile devices and accessories will continue to increase in Jamaica, and Lasco Financial Services will employ the strategies necessary to become a leading provider is this market."
However, the financial service provider might find it difficult playing catch up given the recent growth spurt in purchases of smartphones.
Both telecoms operating in Jamaica have reported selling tens of thousands of them over the past year, particularly as the prices of the devices they offer start at around $5,000 - which is below the national minimum weekly wage.
FLOW Jamaica reported an increase in sales of telecommunications equipment and accessories from $1.2 billion in the year to March 2014 to $1.9 billion a year later, although these figures would include 'flashlight' phones and other devices that are not 'smart'.
Digicel did not disaggregate its handset sales by individual markets, but it recorded a steady increase in this revenue stream from US$120 million in the year to March 2013 to US$141 million in the year to March 2015. Its handset sales dropped by US$8 million from year-earlier levels to US$26 million during the three months to June 30, but the decline was primarily due to lower sales in El Salvador and Papua New Guinea.
Before now, LASF reshaped its business model after making a huge push in its remittance operations, which operates under the MoneyGram brand.
In the last financial year ending March 2015, revenue from this business line jumped by 50 per cent. Moreover, its contribution to the company's income rose from around half to 70 per cent.
For the three months to June 30, the financial service provider saw overall revenue climb by eight per cent from year-earlier levels to $192 million.