100830-cr_RCS_Green_phone.pdf

7/27/2019 100830-cr_RCS_Green_phone.pdf

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Cell Phones

Need to better manage growingcell phone waste



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More cell phones, more waste

The mobile phone is one of our smallest everydayelectronic possessions, but the environmental issuessurrounding it are proving to be a sizeable challenge.

According to Cowen & Co., of 1021.6 millionphones sold in 2007, 640.9 million came fromreplacement sales. The number of replaced cellphones will grow at a CAGR of approximately

9 percent during 2008–2012. Approximately,four percent of these replaced phones will endup in landfills, posing a serious challenge forthe environment. Rapid changes in technologyand product designs have discouraged mobileenhancements and repairs, increasing the demandfor new mobiles and the disposal of old ones.

The problem begins when retired handsets endup in landfill sites or if they are dumped illegally,leading to toxic substances seeping into the soil andgroundwater, making the disposal of old cell phonesa problem for the world.

What is in a cell phone?

Cell phones release harmful substances if they arenot disposed of properly. Heavy metals such asmercury, lead, cadmium, and brominated flameretardants are used in cell phone parts like the liquidcrystal display (LCD), the printed circuit board (PCB),the plastic casing and the battery1. These substanceshave been linked to cancers, the development ofabnormalities, learning disabilities, and behavioralproblems, and affect the nervous system andkidneys. They can also have a devastating impact onanimals.

In 2007, 63% of net cell phone sales werefrom replacements and only 3% of thereplaced phones were recycled. By 2012,landfill cell phone waste will equal the

waste of 21 Boeing 747 airplanes



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The problem is growing

According to replacement sales predictions,more cell phones will be retired every year.With the absence of a proper recycle and reuseprogram, more than 7000 tons of toxic cell phonecomponents are estimated to be dumped in landfillsby 2012. The resulting contamination will have farreaching consequences for the environment and allliving beings.

Mobile phone sales are primarily driven by threefactors:• New Users: users who did not have cell phones

before, or require additional phones• Churn: users who choose to leave their current

provider to join another• Upgrade and Replacement: existing users who

obtain a new phone

The growth in new users has been a major driver forcell phone sales in the past, but due to increasingsaturation in the developed telecom markets like

Europe, Japan and America, new connections havegradually declined since 2007.

The main contributors to cell phone waste are thosewho upgrade and replace their handset. As seenin a recent study by Gartner, the percentage ofsubscribers changing their cell phones is higher thanthe percentage of subscribers not changing theirphones. 65 percent of subscribers in Asia, Europeand the Americas replace their cell phones at leastonce in two years. This means that every two years,approximately 100 million cell phones reach landfillsif they are not recycled or reused.

New Churn

users

Source: Tuong Huy Nguyen, “Dataquest Insight: Upgrade and Replacement;The Next Frontier for Sustaining Handset Growth” , Gartner, 2008, p.4

Handset Sales, 2004–2012



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What are the consequences of inaction?

According to Nokia, of all the discarded phones in2007–2008:• Thrown in landlls = 4%

• Fully recycled = 3%• Sent to emerging markets for reselling = 16%• Passed on to families or friends = 25%• Kept in drawers at homes = 44%• Other = 8%From: www.nokia.com/enviornment/we-recycle/why-recycle(Oct.2008)

We estimate that mobile waste will grow at a CAGRof approximately 9 percent between 2008 and2012, filling landfills to the volume of 21 Boeing 747airplanes. More than 80 percent of the cell phonewaste will be hazardous.

How to minimize the environmental footprintof cell phonesThe growing cell phone waste can be effectivelyhandled by recycling and refurbishing used cellphones. Refurbishing extends the lifetime of usedphones and thus delays their entry into landfills.Recycling reduces the need for the raw materialsused to make new products. The inclusion ofrecycling or refurbishing would change thetraditional view of the cell phone life cycle.In this new life cycle model, every stakeholder willhave to play a role in reducing the environmentalfootprint of cell phones.

Manufacturers can make a difference by usingmaterials that can be safely recycled when thephone is no longer needed. This involves using lesshazardous substances (for example, lead-free solder),and minimizing the mixing of materials (for example,metals embedded in plastics), which are difficultto separate during recycling. They can also havesystems to process phones returned through repairor retail outlets and work with suppliers to providerecycled materials to manufacture new phones.

Customers can deposit their used phones in a

take-back scheme for refurbishment or recyclinginstead of throwing them away.

Telecom companies can play a central role byrunning/supporting collection programs thatfacilitate the easy collection of used cell phones.These collected phones can then be sent to recyclerslike ReCellular Inc2. These recyclers, based on thecondition of the cell phones, can recycle or refurbishthe phones. It is the success of these collectionprograms that will shape our victory in the battle tocut mobile phone waste.

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Cell Phone Waste by 2012



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Collecting the cell phonesThough telecom companies have started variouscollection programs to collect and recycle discardedcell phones, it doesn’t seem to be enough. InformInc. reports that the 2.5 million cell phonesrecovered by various collection programs in theUnited States during 1999–2003 account for lessthan 1 percent of the millions of phones retired anddiscarded each year, and have had negligible impacton this waste stream.

The effectiveness of these programs is determinedby the convenience of the methods used to collectused phones, awareness of the existence of theseprograms and customer incentives offered toencourage people to donate their phones.

While some companies and service providers havedevised innovative ways to execute collectionprograms of redundant cell phones (for example,at football games and at schools), low publicawareness about collection programs and lowincentives to donate phones have limited the successof these programs.

This is because the problem cannot be addressedsufficiently by the telecom industry alone. As cellphone waste grows, it becomes important forgovernments and the telecom industry to worktogether to provide a comprehensive solution.

Governments around the world can take initiativesto implement regulations to promote the recyclingand reuse of cell phones. The most notable ofexisting regulations are the Basel Convention,EU directives on Waste Electrical and ElectronicEquipment (WEEE), and EU directives on Reductionof Hazardous Substances (RoHS).These policies arean attempt to reduce the generation of cell phonewaste by discouraging the economically motivateddumping of hazardous waste (Basel Convention),preventing the use of harmful chemicals in newcell phones (EU RoHS directive) and mandating there-use/recycling of cell phones (EU WEEE directive).

The WEEE directive mandates an IT and telecomrecovery rate of 75 percent and a reuse and recyclingrate of 65 percent by 20063. Governments caneven implement policies that make manufacturers(financially) responsible for the entire life-cycle oftheir cell phones, especially when a phone reachesthe end of its life.

Doing good while saving moneyThe cell phone is recognized as an indispensabletool at the workplace, borne out by corporate cellphone plans for employees. Corporations can playa significant role in minimizing the toxic waste fromcell phones by initiating a replacement and recycleprogram. Corporations can frame policies thatencourage employees to return firm cell phones,and can set tangible goals to recycle these returnedphones through the appropriate channels. They canalso participate in the formation and funding of acollaborative work platform with manufacturers,users, recyclers, and NGOs to develop a sustainablecell phone waste management system like MobileMuster4. A good start would be to educateemployees about the environmental impact of notrecycling their cell phones.



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Conclusion

By 2012, the market for cell phones will be drivenmainly by replacement sales. This will generatemore than 7,000 tons of toxic waste. If this wasteis not handled properly, it will make its way intothe environment, posing serious health hazards.While many companies have realized this growingproblem, and are making individual efforts to handlethis waste, they still fall short of a comprehensivesolution.

Stakeholders need to collaboratively deal withthe problem and adopt an all-inclusive life-cycleapproach for used cell phones. This approach willreduce the environmental footprint and extend thelifespan of cell phones. Stakeholders will also have toidentify and develop revenue streams to finance therecycling programs without affecting their bottomlines.

Governments should push for the reuse andrecycling of discarded cell phones. At national

levels, governments can implement regulations thatmandate minimum use of toxic materials and settangible goals for recycling. However, when workinginternationally and between countries, theseregulations become less potent because of differingapproaches and enforcement issues. Governmentsacross the world need to come together toimplement common regulations that promote therecycling and reuse of cell phones. However, theonus of making these efforts a success lies withthe end users. To this end, the industry should takeaggressive steps to educate users about the benefitsof recycling cell phones. This should be the startingpoint for ending cell phone waste.

Future knowledge workThe next paper in the series will include topicssuch as:

Industry• The top 10 corporate and best practices for

solutions that recycle cell phones; understandingthe business opportunity and creating a businessmodel helps improve the bottom line by managing

waste better• Understanding the different government

regulations that promote the production of greencell phones and better management of cell phonewaste

• Analysis of the efforts taken by third partyorganizations to recycle, reuse, and rent cellphones, and create non-profit industries out ofthe problem of cell phone waste

• Educating consumers on the environmentalimpact of cell phones

• Providing incentives for recycling

Cell Phone Providers and Manufacturers• Analyzing the efforts taken by various service

providers and cell phone manufactures to containand manage waste.

• Batteries account for 75 percent of the waste.There are opportunities to:- Standardize cell phone batteries (similar to

the steps the industry has agreed on forstandardizing cell phone chargers)

- Provide the option to sell cell phones withoutbatteries, encouraging the consumer to reusethe battery from the old phone



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References1 Mobile Phone Partnership Initiative Project 3.1 (Approved Draft), March 20, 20062 According to a report published by ReCellular Inc. in 2008, by resuing/refurbishing 5.5 million cell phones, ReCelluar

Inc. raised $4 million dollars for charity causes and conserved 14 million kilograms of greenhouse gas emission,equivalent to taking 10,890 passenger cars off the road.

3 http://www.ec.gc.ca/nopp/docs/rpt/itwaste/en/summary.cfm4 Mobile Muster, the recycling program of the Australian Mobile Telecommunication Association, is the best example

of a successful collaborative effort to reduce cell phone waste. This program is funded by at least 85 percent of thetelecom industry including handset manufacturers. In 2008, this program was able to collect 1.4 million cell phones,which formed about 130 tonnes of cell phone waste.

AuthorsDivy JainConsultantDeloitte Consulting India Pvt. Ltd

Saloni Dhar

ConsultantDeloitte Consulting India Pvt. Ltd

Martin HougaardConsultantDeloitte Consulting LLP

ContactsAna Helena Chacón

DirectorDeloitte Costa [email protected](506) 2521 6790

Jaqueline Díaz

Manager

Deloitte Costa Rica [email protected](506) 2521 6790



For more information, visit www.deloitte.com/cr

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